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The superb, not nice Biden economic system — Let’s be truthful. President Joe Biden obtained a extremely sturdy preliminary second quarter progress estimate at 6.5 p.c, annualized. The total 12 months seems to be to be near 7 p.c and the economic system is now barely larger than it was earlier than the Covid freeze (although not the place it will be absent the pandemic). These are Reaganesque, Eighties growth form of numbers.
And but… it got here in a full 2 percent below Wall Street expectations, a efficiency that underscores the forces dragging on progress. And the April-June growth — which mirrored the lower-than-expected job-creation numbers in current months — may very well be the excessive level for Biden, whose presidency is using on a sturdy financial rebound.
WHITE HOUSE KNOWS THE DELTA STAKES — Per an individual acquainted with White Home considering: “We’ve recognized since this factor began going across the globe in late 2019 that an important factor was getting Covid totally beneath management … Should you don’t, you threat additional mutations and going again to sq. one. It’s all the pieces. It’s the entire ballgame.”
White Home officers say that whereas they’re involved with the Delta variant, inflation and labor market points, they continue to be assured within the total route of the economic system.
David Kamin, deputy director of the White Home Nationwide Financial Council: “We now have instruments that we didn’t have earlier than to handle the brand new variant each when it comes to well being and financial results …
Kamin added that the “pandemic mixed with provide chain bottlenecks have created some actual challenges. However we’re clearly targeted on doing all the pieces we are able to to resolve them whereas making investments to handle long-standing weaknesses within the economic system.”
No must freak out – Goldman’s Jan Hatzius in a consumer word: “The three pillars underlying our view that vaccinations will additional drive a robust world restoration stay intact. First, we count on the world to provide 13bn vaccine doses this 12 months, all offering strong safety in opposition to extreme illness.
“Second, rising immunity results in substantial easing in our GS Efficient Lockdown Index … [H]owever, we count on the remaining a part of the service sector restoration to be much less fast than the early levels.”
GOOD FRIDAY MORNING — Felt like a monster week. Get some relaxation. Electronic mail me on [email protected] and comply with me on Twitter @morningmoneyben. Electronic mail Aubree Eliza Weaver on [email protected] and comply with her on Twitter @AubreeEWeaver.
R.I.P. CARL LEVIN — The Michigan senator was a relentless company investigator who may truly freak out cocky high Wall Road executives. Additionally only a tremendously good man.
Via CBS in 2010: “Levin (D-Mich.) channeled his frustrations with Goldman Sachs witnesses at a Senate Permanent Subcommittee on Investigations hearing today by repeatedly invoking an e-mail containing the phrase ‘shitty deal’ over a ten minute interval.
““Levin was questioning Daniel Sparks on whether or not Goldman Sachs was pushing investments it knew have been unhealthy for purchasers. He referenced an e-mail despatched to Sparks from his superior on a deal known as Timberwolf.”
EVICTION MORATORIUM FIGHT — Inbox through a D.C. supply noting Home Management despatched round a whip discover about possibly voting on an eviction moratorium extension by means of December thirty first.
Via our Katy O’Donnell: “Home Democratic management on Thursday struggled to construct assist for a five-month extension of the nationwide eviction moratorium that is set to lapse this weekend after working into opposition from greater than a dozen Democratic lawmakers …
“With the ban set to run out Saturday and thousands and thousands of People vulnerable to shedding their houses, Home Majority Chief Steny Hoyer (D-Md.) confirmed that Democrats in favor of extending the moratorium have been nonetheless working to lock down backing for a attainable last-minute vote Friday.”
GOP REACT ON THE ECONOMY — Methods and Means rating member Kevin Brady “Biden fell in need of his personal favored financial forecast, Moody’s, which predicted 6.4 p.c progress and 9.6 p.c progress for the primary and second quarters of 2021 …
“[I]n actuality, precise GDP progress for these quarters was 6.3 p.c and 6.5 p.c. We solely reached the goal for the primary quarter three months later.
HWANG’S BIG MONEY — CNBC’s Brian Schwartz: “A charity based by Invoice Hwang, a longtime monetary govt beneath scrutiny for a spherical of trades that despatched the market right into a tailspin, noticed its property soar by greater than $100 million simply two years previous to the meltdown on Wall Road.
“The brand new 990 tax returns of Hwang’s Grace and Mercy Basis from 2019, which have gone unreported since they have been solely made public not too long ago by the Inner Income Service, give essentially the most present glimpse into Hwang’s monetary assets.”
WALL STREET PUSHES BROADLY HIGHER AFTER TWO DAYS OF LOSSES — AP’s Damian J. Troise and Alex Veiga: “Shares on Wall Road bounced again from a two-day slide Thursday, inserting the S&P 500 on tempo for its second straight weekly achieve. The S&P 500 index rose 0.4 p.c, powered by broad positive aspects.
“About 77 p.c of the shares within the benchmark index closed larger. Know-how shares and banks made a few of the greatest positive aspects, together with a variety of outlets and different consumer-oriented corporations. Solely communication companies shares and actual property corporations fell. The modest rally got here as the most recent authorities knowledge confirmed continued financial progress and traders reviewed one other batch of principally optimistic company earnings experiences.”
ROBINHOOD FALLS IN PUBLIC MARKET DEBUT — CNBC’s Maggie Fitzgerald: “Shares of Robinhood closed down greater than 8 p.c in its Nasdaq debut, after pricing close to the low finish of its IPO vary. The net brokerage began buying and selling at $38 per share, the low finish of its vary, valuing the corporate at roughly $32 billion. After dropping as a lot as 10 p.c and ending the session at $34.82, Robinhood’s market capitalization was about $29 billion.”
SOME TREASURY BILLS LIKELY TO BE SHUNNED AS DEBT CEILING COMES BACK INTO FORCE — Reuters’ Karen Brettell: “U.S. Treasury payments maturing this fall may face liquidity issues tied to a possible authorities money crunch, which may occur if politicians delay or fail to resume america’ borrowing authority after the debt ceiling returns on the finish of the week.
“The Treasury has been chopping invoice issuance earlier than its two-year debt ceiling suspension is because of expire on July 31. The federal government is anticipated to have the ability to get by till October or longer by utilizing extraordinary measures, which can embrace suspending some investments and safety issuance.”
ECONOMY RECOVERS PANDEMIC LOSSES, BUT FACES NEW TEST — NYT’s Ben Casselman: “Vaccinations and federal support helped carry the U.S. economic system out of its pandemic-induced gap within the spring. The subsequent take a look at can be whether or not that momentum can proceed as coronavirus instances rise, masks return and authorities assist wanes
COVID RECOVERY DRIVES CREDIT RATING UPGRADES TO RECORD HIGH — Reuters’ Marc Jones: “The sturdy financial restoration in america has led to a file variety of company credit standing upgrades this 12 months, figures from S&P International confirmed on Thursday. ”
SENATE BILL AIMS TO CREATE NATIONAL DATABASE OF RESTRICTIVE PROPERTY COVENANTS — NYT’s Joshua Jamerson: “A brand new invoice backed by a slate of Senate Democrats would allocate aggressive grants to schools and universities to investigate, digitize and map historic housing discrimination information, creating the primary nationwide database of its type.
“The main focus of the trouble is to analysis covenants hooked up to housing deeds, which emerged nationwide across the early twentieth century, that made it tougher for Black folks in lots of cities to personal property.”
CRYPTO SURPRISE RATTLES INDUSTRY IN RARE BIPARTISAN TAX PLAN — Bloomberg’s Laura Davison, Joe Mild and Allyson Versprille: “A Senate proposal to ramp up IRS surveillance over cryptocurrency transactions has the business and traders questioning the plan’s viability and its promise of producing $28 billion in tax income.
“Cryptocurrency exchanges, traders and their advisers have been caught off guard Wednesday when a bipartisan Senate infrastructure settlement was launched that included a large-scale enhance within the necessities for crypto brokers and traders to report their transactions to the Inner Income Service. ”
REPORT: CREDIT SUISSE FAILED TO ACT ON ARCHEGOS RISKS — WSJ’s Margot Patrick: “Credit score Suisse Group AG knew Archegos Capital Administration was an enormous threat and didn’t take actions to repair it, based on an investigation the financial institution commissioned into the collapse of the household funding agency.
“The report launched Thursday, ready by a regulation agency for Credit score Suisse, detailed how the financial institution for years granted Archegos particular dispensation to keep away from guidelines meant to guard the financial institution. It additionally ignored workers warnings earlier than the household funding agency’s collapse.”