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 5:15 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. INTO THE UNKNOWN — Some consumer investor advocates are quietly raising questions about the prospect of a new Democratic nominee to the Securities and Exchange Commission who isn't well known to policy experts. Jaime Lizárraga, a long-time senior adviser to House Speaker Nancy Pelosi , is the leading contender to replace Democratic Commissioner Allison Lee, whose term will expire at the end of June. One former administration official tells MM that Lizárraga is the likely pick, and two people familiar with the process say an announcement could come in the next few weeks. Lizárraga is of course known to many on Capitol Hill — he's worked for Pelosi for 14 years, and spent eight years before that on the House Financial Services Committee. He did a short stint at the SEC in the 1990s, as deputy director of legislative affairs. But his résumé doesn't include the kind of deep policy experience on these issues as other recent commissioners, such as Lee, who spent 13 years as an SEC enforcement lawyer, or Elad Roisman, a former Republican chief counsel on the Senate Banking Committee. Neither the White House nor Lizárraga responded to requests for comment. In short, Lizárraga is a blank slate when it comes to his policy views. That could be an asset during the Senate confirmation process. But it has put some SEC watchers on edge as they try to suss out his positions on major issues looming over the agency's agenda, such as climate change and cryptocurrency. A number have tried to set up meetings with him in recent days as word of his potential nomination started spreading. People who spoke with MM didn't want to share their misgivings publicly about a potential nominee. While Lizárraga may not be a securities expert, his selection would make sense for other reasons, said one former Senate aide and financial services lobbyist. Hispanic members of Congress have been clamoring for the White House to name more Hispanic nominees to major administration posts, especially in financial services, the lobbyist said. (Florida Democrat Bob Menendez regularly gives Federal Reserve Chair Jerome Powell an earful about the lack of diversity at the Fed when Powell testifies in the Senate.) And while Pelosi has made clear she is running for reelection, Democrats may be in the minority if Republicans take back the House in the November midterm elections, making now an opportune time for a senior staffer to make a career move, the lobbyist said. "Jaime is a good guy," the person said. "He's kind of a natural fit too and would make a lot of sense." To be clear, investor advocates are unlikely to object to a nominee who has the endorsement of the speaker. They'd just like to get to know him better, and fast. Speaking of the midterms — Our colleague, and your esteemed former MM host, Ben White is out with a new story on the 'scarily painful' scenario Democrats are facing at the ballot box this November. The path to Election Day is littered with landmines, Ben writes: "President Joe Biden and Democratic lawmakers face the threat of spiraling inflation , driven by soaring food, energy and lodging costs. The Federal Reserve is embarking on an aggressive series of interest rate hikes — as many as seven this year alone — to curb rising prices and slow the economy. The war in Ukraine is further disturbing supply chains, roiling commodities markets and fueling uncertainty. Add in a new wave of Covid lockdowns in China that could bring more disruptions to trade and you've got a toxic mix." While the economy was once seen as an asset for Democrats heading into the midterms — a robust recovery powered by steady hiring, strong consumer demand and rapidly rising wages — it's now seen as a potential drag, several White House allies told Ben. "The mood is just shockingly bad inside and outside the White House," said Steven Rattner, an investment banker and former Obama administration official who speaks to senior Biden aides. White House officials deny any sense of panic — "So many economic indicators are not only extremely good but better than expected. And we are recovering so much faster than previous downturns," said Heather Boushey, a member of Biden's Council of Economic Advisers. That's not wrong. But surveys show voters are still frustrated, with three-quarters saying the economy is in bad shape, and 58 percent disapproving of Biden's handling of the economy. And it's not clear voters will give him any credit if conditions improve. In any case, the window is quickly closing. IT'S THURSDAY — Victoria Guida will be driving the bus tomorrow. Please be sure to send her (and Aubree) your tips, story ideas and any complaints: vguida@politico.com, aweaver@politico.com, or find her on Twitter @vtg2 or @aubreeeweaver.
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