True discourse on infrastructure – POLITICO

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True discourse on infrastructure – So yes, great. President Biden adopted the Senate’s centrist and bipartisan infrastructure program this would inject nearly $ 600 billion in new dollars into the economy focused on roads, bridges, railroads, broadband, etc.

If passed, the package will likely be a big positive for a US economy that is ridiculously and embarrassingly behind on these investments. Drive anywhere, take the train, or try to get decent internet access outside of major metropolitan areas and you know that to be true. The United States is a terrible joke when it comes to maintaining and modernizing the basic arteries that run the economy. This bill would not fix that, but it would be a start.

The impact on long-term productivity and standard of living of these types of investments are real and undeniable. Joe Brusuelas of RSM: “In my opinion, this agreement represents a rare opportunity to improve the long-term growth trajectory of the economy, productivity and living standards of Americans.

But, but, but … Nothing about it is being done. Progressives are furious that investments are relatively small and limited. Biden himself has said he wouldn’t sign the bill without a separate reconciliation package with a significantly higher price tag that includes more of his “human infrastructure” focused agenda. But Democrats are a long way from what this package should look like.

Figures like Sen’s $ 6 trillion. Bernie sanders (I-Vermont) are just crazy and would never get 51 Democratic votes. Something closer to $ 2,000 billion? May be. But it is not a lock. And, as MM noted, you have to spend an actual budget to do the reconciliation.

And efforts to block a bigger package with 51 votes could lead Republicans to bail out the infrastructure bill. In short: absolutely don’t assume that all of this is actually happening. And if it doesn’t, the long-term economic outlook will suffer considerably. And Biden too.

GOOD FRIDAY MORNING – Happy weekend, everyone. Email me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.

UNEMPLOYMENT REDUCTIONS COULD SLAP BLACK AND LATINO WORKERS – Our Eleanor Mueller: “The decision of more than two dozen governors to cut unemployment benefits supplemented by the federal government will have a disproportionate impact on black and Latino workers and, according to some economists, could have lasting economic repercussions for them .

“Of the 17.4 million workers who applied for and received unemployment benefits between January and May, a disproportionate 21.5% were Latino and 18.4% were black, Census data spectacle. This is more than their respective shares of the overall workforce.

“The differences are even more pronounced in states that have reduced unemployment assistance or are about to do so. In Georgia61.4 percent of those who received unemployment benefits between January and May are black, according to census data. In Texas, 35.8 percent are Latino. In Mississippi, 46.3 percent are black. And in Caroline from the south, 28.7 percent are black.

STRESS TEST REACT – Jaren Seiberg of Cowen on the results of the annual stress tests of the Fed’s big banks: “These are solid results that should offer political protection to banks against charges that they are too large to manage or represent a systemic risk” . … We expect distributions to increase significantly as the results show what happens when banks hold additional capital for more than a year.

“It could be a different political problem for the big banks if they’re not careful about how they frame returns. Progressives could argue that banks should use this money to eliminate fees for consumers and increase wages for lower-level employees rather than giving it to shareholders. ”

Ian Katz from CapAlpha: “Banks can announce their capital distribution plans after the market closes on Monday. In view of the results, the already high expectations could rise further. Bank stocks climbed after business hours on Thursday. … While we expected the banks to do well, we usually see one or two getting blasted by the Fed, violating or nearly violating a capital requirement. This does not appear to be the case this time around.

“This could be the peak time for banks for stress testing. Randy Quarles’ term as vice president for oversight expires in October. He will be replaced by someone with a more skeptical view of the big banks.

Dennis Kelleher from Better Markets: “The Fed’s so-called stress tests no longer stress or test banks. After all, there is no stress in a test that every bank comfortably passes, especially when that result is predictable, as the massive intervention of the test giver (the Fed) in the markets ensures that the candidates (the banks) have everything they need to pass the test.

GORDON AT FHFA – Our Katy O’Donnell: “Biden will appoint Julia Gordon, Director of Nonprofit Housing, as Commissioner of the Federal Housing Administration… Gordon is the Chairman of the National Community Stabilization Trust, which facilitates the rehabilitation of homes in markets underserved. … She was also the Director of Housing at the Center for American Progress and led the Single Family Policy Team at the Federal Housing Finance Agency.

EXTENSION OF THE MORATORIUM ON EXPULSIONS – As expected (but maybe not as long as expected), also via Katy: “The Biden administration unveiled a series of measures to prevent people who lost income during the pandemic from losing their homes on Thursday, including by prolonging Nationwide deportation and seizure bans until July 31.

“The White House and other federal agencies have sprung into action as state and local governments were unwilling to protect tenants if the federal eviction ban expires next Wednesday. More than six million renter households are behind on rent, according to a recent Census Bureau survey.

NASDAQ, S&P 500 SCALE OF NEW HIGHS – Reuters’ Devik Jain and Noel Randewich: “The Nasdaq and S&P 500 indexes hit all-time highs on Thursday, with the Dow Jones also surging, as US President Joe Biden passed a bipartisan Senate infrastructure deal.

“After the US economy grew at an annualized rate of 6.4% in the first quarter, thanks to the massive fiscal stimulus, investors are banking on an infrastructure deal that could guide the next stage of the recovery for the most. great economy of the world. Caterpillar jumped 3.5% and Boeing 2.2%, helping to raise the Dow Jones Industrial Average. ”

THE TREND OF FALLING UNEMPLOYED CLAIMS HAS ENDED – Amara Omeokwe of the WSJ: “A recent downward trend in workers’ unemployment benefit claims stagnated in mid-June, amid other signs that the labor market continues to gradually recover.

The Labor Department reported Thursday that initial jobless claims, a proxy for layoffs, edged down last week to seasonally adjusted 411,000, from revised upward 418,000 the week before, when claims increased. Four-week average claims, which eases volatility from weekly figures, edged up from a pandemic low at 397,750. ”

JOB HOLE OR INFLATION? THE FED’S POLICY MAKERS SEPARATE THE VIEW OF THE RISKS – Reuters: “As Federal Reserve policymakers launch an intense debate on when and how to start reducing central bank support to the economy, they are divided over what poses the greatest risk: a still significant jobs or a potential inflationary shock.

“Robert Kaplan and James Bullard, heads of the Dallas and St. Louis Fed banks respectively, both warned on Thursday that inflation could stay higher longer than many of their colleagues can anticipate.”

CONVENTION ENDS TRUMP-ERA RULE FOR PAYROLL LENDERS TO AVOID INTEREST RATE CEILINGS – WSJ’s Julie Bykowicz: “Congress voted Thursday to overturn a Trump administration rule that allowed high-interest consumer lenders to tie up to banks and bypass interest rate caps at the level of the ‘State.

“The Office of the Comptroller of the Currency decision in late October stated that any bank or federal savings association that signs loan documents should be considered the” true lender, “even if the loan is repaid or sold to a high-interest entity. such as a payday lender. Prior to this rule, courts had sometimes ruled these arrangements illegal. Under then-President Donald Trump, the OCC cited different court approaches as the reason why he wrote the rule. ”

THE BANKS OF ARCHEGOS FACING THE DOJ PROBE – Bloomberg’s Sridhar Natarajan, David McLaughlin and Tom Schoenberg: “US investigators who focus on corporate collusion are examining how global banks have handled multibillion dollar deals with Archegos Capital Management that sent the shares to a spiral and burned other shareholders.

Justice Department’s antitrust division is handling at least part of investigation into Bill Hwang’s business collapse after lenders rushed to liquidate sour positions in March, people familiar with the matter say . The debacle also wiped out much of the billionaire owner’s fortune and inflicted more than $ 10 billion in losses on the banks. ”

BEST US OFFICIALS CONSULTED WITH BLACKROCK DURING MARKET MERGER – NYT’s Jeanna Smialek: “As Federal Reserve Chairman Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, top US economic officials were in almost permanent contact with a Wall Street executive whose company could benefit financially from the bailout.

THAT REALLY MAKES UNDERGROUND MONEY – Aaron Klein of Brookings in POLITICO Agenda: “[S]leading the analysis with the largest banks misses an important reality: a handful of small banks are the real giants of overdraft …

“According to my calculations, for several consecutive years, at least six small banks depend on overdraft receipts for the majority of their profits. For three of these banks, overdraft receipts exceeded total profits for each of the past two years, meaning that these banks lost bank money except for overdraft fees.

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