Earnings season continues with Bank of America, Citigroup and Wells Fargo … Powell testifies before House Financial Services at noon LARRY SUMMERS VINDICATED? — Our Ben White: "There is a new fear circulating inside the West Wing of the White House: Maybe Larry Summers was right. The former Treasury secretary has been warning since February that President Joe Biden's big-spending agenda was creating the risk of an inflation spike this year, potentially cutting into the economic recovery from the Covid-19 pandemic. For the moment at least, Summers is looking prescient. " … The numbers beat Wall Street expectations and fueled fears that the Federal Reserve might have to act faster than anticipated to pump the brakes on the economy to prevent a runaway rise in prices. Summers has vexed the White House and infuriated Democrats with his repeated alarms about Biden's plans to spend trillions of dollars more in federal money, though he favors more infrastructure investment." MM sidebar: Ben also reports that Larry Summers met with White House economic officials Brian Deese and Cecilia Rouse on Tuesday, a tidbit scooped by Bloomberg. DEMS UNVEIL GO-IT-ALONE PLAN — Our Caitlin Emma and Jennifer Scholtes: "Senate Democrats announced a top line budget number late Tuesday that will propel their plan to enact the full array of President Joe Biden's social welfare and family aid promises without Republican votes. "The proposal sets an overall limit of $3.5 trillion for the spate of Democratic policy ambitions that won't make it into a bipartisan infrastructure deal, if Congress can reach one. Formal text of the Senate's budget resolution has yet to be released. If that measure can clear both chambers with lockstep party support, it will unleash the power to circumvent a GOP filibuster using budget reconciliation, the same move that Democrats used to Senate Democrats announced a top line budget number late Tuesday that will propel their plan to enact the full array of President Joe Biden's social welfare and family aid promises without Republican votes." FED'S BULLARD: TIME IS RIGHT TO PULL BACK ON CENTRAL BANK STIMULUS — WSJ's Michael S. Derby: "Federal Reserve Bank of St. Louis President James Bullard is ready to start slowing the pace of central bank bond buying as soon as his colleagues are, worried in part that the purchases risk overheating the gangbusters housing market. 'I think with the economy growing at 7 percent and the pandemic coming under better and better control, I think the time is right to pull back emergency measures,' Mr. Bullard said Monday in an interview with The Wall Street Journal." JUST IN: SURVEY: FEW UI RECIPIENTS FEEL BETTER OFF THAN PRE-COVID — Only 20 percent of people getting unemployment insurance who previously worked full time and only 28 percent of UI recipients who previously worked part time say the money does a better job of covering their expenses than the money they used to earn, according to a new Morning Consult survey. "These survey results strongly reject the narrative that all UI recipients are doing better financially than they were prior to the pandemic," writes John Leer, chief economist at the data intelligence firm. Using the survey, Morning Consult estimates that 1.84 million jobs could be filled by the end of the year as a result of enhanced unemployment benefits expiring, leaving the economy still 4.7 million jobs short. SEC HITS SPACE SPAC DEAL WITH $8M FINE — Our Kellie Mejdrich: "The Securities and Exchange Commission on Tuesday said it levied an $8 million fine against space transportation firm Momentus and a blank-check investment company seeking to take it public after they misled investors about the startup's technology and national security concerns surrounding its Russian founder. "The SEC settled the charges with Momentus as well as with Stable Road Acquisition Company, its sponsor SRC-NI and its CEO Brian Kabot. Momentus founder and former CEO Mikhail Kokorich — a Russian citizen — is fighting the charges, and on Tuesday the SEC accused him of fraud in federal court." GOP RALLIES AGAINST CFPB NOMINEE — Our Katy O'Donnell: "Senate Republicans are ramping up opposition to President Joe Biden's nominee to lead the Consumer Financial Protection Bureau ahead of a confirmation vote expected later this month. "Every Republican on the Senate Banking Committee, which has jurisdiction over the bureau, signed a letter Tuesday saying that Biden's pick — FTC Commissioner Rohit Chopra — failed to answer lawmaker questions about reports of career staff being pushed out at the agency and that the lack of response was 'disqualifying.'" DIMON SAYS THE U.S. CONSUMER IS RARING TO GO — WSJ's David Benoit: "JPMorgan Chase & Co. said second-quarter profit surged and customer spending is returning to pre-pandemic levels, evidence of a strong economic recovery that shows few signs of slowing. The nation's biggest bank posted a profit of $11.95 billion, or $3.78 per share, compared with $4.69 billion or $1.38 per share a year ago. That beat the expectations of analysts, who had predicted $3.20 per share." |
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