| | | | | |  | | By Ben White and Aubree Eliza Weaver | PROGRAMMING NOTE: Morning Money will not publish on Thursday, Nov. 26 and Friday, Nov. 27. We'll be back on our normal schedule on Monday, Nov. 30. Editor's Note: Morning Money is a free version of POLITICO Pro Financial Services' morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. | | | It's Yellen! — So we are not going to say we told you so. Except we told you so on Friday. It was clear to us last week after speaking to senior advisers to President-elect Joe Biden that former Fed Chair Janet Yellen would be the pick for Treasury. We couldn't write it as a done deal because top transition officials declined to confirm it. But we knew. And you knew if you read this column. So good on you. Tell your friends! And now it's official, as our Victoria Guida reported. So what does it mean? — I write about the Yellen pick at some length here. Biden is leaning on a well-known figure who is trusted and beloved by most Democrats, respected by many Republicans, acceptable to Wall Street and aligned with the no-surprises approach expected to be a hallmark of the incoming president's tenure. Yellen, widely seen as the obvious choice when Biden teased last week that he had made his pick, is slightly untraditional for Treasury. Her pre-government background came largely as an academic economist and monetary policy expert. The top Treasury slot often goes to people — until now all men — with extensive corporate backgrounds and high-profile international experience. Serious love for Yellen — But Yellen has deep support throughout the Democratic Party — and among many Republicans — even if she was not sufficiently committed to the views of some on the far left. She also commands respect on Wall Street following her widely praised tenure as Fed chair, and before then as the central bank's vice chair who often represented the Fed behind the scenes in international forums. She's also going to be pretty much impossible for Republicans to oppose. Top Biden outside adviser Gene Sperling tells me: "It is remarkable to think of the depth and breadth of the respect she commands nationally and globally … "Through the years as both chair of the Council of Economic Advisors and at the Fed she has proven beyond any doubt that she is masterful at the broadest range of economic issues that will matter most right now — from emergency financial measures to the need for a bold fiscal response to labor market and tax policy. It is a brilliant choice." Allianz's Mohamed A. El-Erian texts MM : "Would be hard to think today of anyone else for this role who would receive as much widespread support as Janet Yellen, and understandably so. A highly experienced and grounded policymaker, she comes with enormous credibility, knowledge of the domestic and international economic landscape, and a global rolodex." GOOD TUESDAY MORNING — Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver. | | | | TRACK THE TRANSITION: President-elect Biden has started to form a Cabinet and announce his senior White House staff. The appointments and staffing decisions made in the coming days send clear-cut signals about Biden's priorities. Transition Playbook is the definitive guide to one of the most consequential transfers of power in American history. Written for political insiders, it tracks the appointments, people, and the emerging power centers of the new administration. Track the transition and the first 100 days of the incoming Biden administration. Subscribe today. | | | | | | | | YELLEN TOUGH TO OPPOSE — Cowen's Jaret Seiberg: "Yellen will easily win confirmation. We believe the process will take no more than a few weeks. This is true regardless of what happens in the Georgia Senate runoffs. "We could see her clearing the Senate Finance Committee with bipartisan support. She likely gets more than 80 votes in the full Senate. … At a minimum, we believe she could have her confirmation hearing prior to Jan. 20" TRUMP LIMITS BIDEN'S OPTIONS ON THE ECONOMY — Also via Victoria: "Biden is entering the White House with big hopes of juicing the economy with new spending and a Federal Reserve ready to unleash its arsenal of lending programs to prevent the country from slipping back into a recession. He might get none of it. "A rare public spat between the Trump administration and the Fed … exposed the stark reality of the economic policy ammunition Biden will inherit: a stick rather than a bazooka.
With Biden's Democrats in danger of failing to win the Senate and a new era of gridlock on the way in Washington, all eyes are on the Fed to pump up the economy in the face of congressional intransigence." TRANSITION CAN FINALLY BEGIN — Our Matthew Choi, Gabby Orr, Meridith McGraw and Nancy Cook: "More than two weeks after clinching electoral victory … Biden can finally start his formal transition to the White House. "The General Services Administration has formally acknowledged Biden as the apparent winner of the 2020 presidential election, allowing his team to get working on the logistics of the transition, with … Trump announcing the move in a tweet … By law, the president-elect cannot access federal transition funds or contact federal agencies to plan staffing until the GSA recognizes him as the electoral winner." BIDEN WON FASTEST GROWING AREAS — Per new numbers from the Economic Innovation Group (EIG) out this a.m.: "Biden won most of the counties that experienced the largest job gains under … Trump. … Counties won by Biden accounted for 68% of U.S. job growth from 2016-2019. "By flipping Maricopa County, Arizona, Biden was able to win 19 of the 20 counties that had the biggest increases in total jobs. Union County, North Carolina, (outside Charlotte), which ranked 20th, was the Trump-won county with the most employment growth. Biden won two-thirds of the rest of the counties ranked 20-100 for employment growth." | | | STOCKS RISE ON LATEST VACCINE HOPES — AP's Damian J. Troise and Alex Veiga: "More encouraging news on the development of coronavirus vaccines and treatments helped power stocks higher on Wall Street Monday, as the market clawed back most of its losses from last week. "The S&P 500 index rose 0.6 percent, led by banks, energy and industrial companies, sectors that have been beaten down during the pandemic. Health care and technology stocks, which traders have bid up sharply this year, closed lower. Treasury yields mostly rose, another sign of optimism among investors. | | | | DON'T MISS THE MILKEN INSTITUTE FUTURE OF HEALTH SUMMIT 2020: POLITICO will feature a special edition Future Pulse newsletter at the Milken Institute Future of Health Summit. The newsletter takes readers inside one of the most influential gatherings of global health industry leaders and innovators determined to confront and conquer the most significant health challenges. Covid-19 has exposed weaknesses across our health systems, particularly in the treatment of our most vulnerable communities, driving the focus of the 2020 conference on the converging crises of public health, economic insecurity, and social justice. Sign up today to receive exclusive coverage from December 7–9. | | | | | | | | ECONOMIC ACTIVITY PICKING UP — WSJ's Paul Hannon and Amara Omeokwe: "The U.S. economy continues to recover from the downturn caused by the coronavirus pandemic, according to business surveys that show services and manufacturing activity growing despite a rising number of infections. The U.S. performance contrasts with surveys showing the European economy is set for a fresh contraction in the final quarter of 2020, as lockdowns aimed at containing the coronavirus have led to a sharp decline in activity in the dominant services sector." FED'S EVANS SEES NO RATE HIKES UNTIL 2023 OR 2024 — Reuters: "Chicago Federal Reserve Bank President Charles Evans said Monday there is still "quite a long ways to go" for the U.S. recovery from the coronavirus crisis, adding that he expects the Fed to keep interest rates at their current near-zero level until perhaps into 2024. 'If the economy picks up next year and we get on top of the virus and the vaccines are very effective and they are deployed quickly and throughout, then we are going to be in a much better situation,' Evans told the Iowa Bankers Association. "But that won't mean the Fed will take its foot off the monetary gas pedal. Under a new policy strategy adopted just months ago, the Fed has vowed to keep interest rates near zero until the economy reaches full employment and inflation not only hits the Fed's 2% goal but is set to move above that." MILLIONS OF AMERICANS EXPECT TO LOSE THEIR HOMES AS COVID RAGES — Bloomberg's Alexandre Tanzi: "Millions of Americans expect to face eviction by the end of this year, adding to the suffering inflicted by the coronavirus pandemic raging across the U.S. About 5.8 million adults say they are somewhat to very likely to face eviction or foreclosure in the next two months, according to a survey completed Nov. 9 by the U.S. Census Bureau. That accounts for a third of the 17.8 million adults in households that are behind on rent or mortgage payments." WHITE HOUSE WEIGHS NEW ACTION AGAINST BEIJING — WSJ's Bob Davis: "Senior Trump administration officials say they are pushing for new hard-line measures against Beijing, even as President Trump winds down his final two months in office. "The most ambitious effort would create an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries, administration officials say. They say the plan was sparked by Chinese economic pressure on Australia after that country called for an investigation into the origins of the Covid-19 pandemic." Meanwhile, China debt defaults are set to top 100 billion yuan for a third year — Bloomberg's Molly Dai: "China's corporate debt defaults are set to exceed 100 billion yuan for a third consecutive year, underscoring the pandemic's disruption of a government campaign for greater fiscal stability. A surge in missed repayment obligations in the past two weeks drove onshore delinquencies to 104 billion yuan ($15.8 billion) so far this year, data compiled by Bloomberg show. The offshore figure is $8.1 billion, 2.1 times the total in 2019." | | | | Follow us on Twitter | | | | Follow us | | | | |
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