| | | | |  | | By Kate Davidson | Presented by Sallie Mae® | 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. August hardly counts as a slow month in Washington anymore. But it was certainly the calm before the storm. September will bring a dizzying slate of economic and financial news, starting this week with a whole lot of what we call Fed Speak. What to watch? Let's get right to it. The Fed — The main event this week will be remarks from Fed Chair Jerome Powell at the Cato Institute's monetary conference Thursday. It's the last time we'll hear from the central bank chief before Fed officials enter their quiet period ahead of the Sept. 20-21 policy meeting. Markets will be looking for any detail about how Fed officials will decide the size of their next rate increase, which Powell has been reluctant to share. But Nela Richardson, chief economist at ADP, emphasizes that regardless of what central bank officials do later this month, they're all looking to get rates a lot higher; the question is just how fast they get there. "They're all hawks, but some are flying faster than others," she said. "They're tortoises or hares."
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Fed Chair Jerome Powell speaks at a press conference following the central bank's July policy meeting. | Drew Angerer/Getty Images | Vice Chair Lael Brainard also pops up Wednesday in New York, and Vice Chair for Supervision Michael Barr makes his first official appearance the same day at the Brookings Institution, where he's expected to give early clues on how quickly the Fed will move on long-awaited policies, such as making banks game out how climate change will affect their finances. All three events will include some Q&A, so don't be surprised if we get a bit more news than we might otherwise. Bank CEOs to the Hill — The chief executives from the country's biggest banks will make what has become an annual pilgrimage to Capitol Hill to testify before House and Senate lawmakers on Sept. 21 and 22. (Yes, the same week as the Fed meeting.) The CEOs on tap to testify: Bank of America's Brian Moynihan, Wells Fargo's Charlie Scharf, JPMorgan Chase's Jamie Dimon, Citi's Jane Fraser, PNC's Bill Demchak, U.S. Bank's Andrew Cecere and Truist's Bill Rogers. The ritual thrashing from progressives will put the big banks on the defensive, as the hearing will focus on how they've handled consumer issues. But expect to hear the CEOs push back as well on the regulatory agenda, including a proposal to overhaul anti-redlining rules. Crypto — A slew of reports are due this week to the White House stemming from President Joe Biden's executive order on digital assets, including one on the future of money and payment systems, and the implications of a U.S. central bank digital currency. The reports likely won't be released to the public until mid-September. Also: Reps. Maxine Waters (D-Calif.) and Patrick McHenry (R-N.C.) scrapped a plan to roll out new stablecoin legislation this summer amid concerns from Treasury Secretary Janet Yellen. They're aiming to release and mark up a final version this month, though progress toward an agreement is murky, per CoinDesk's Jesse Hamilton. Consumer regulation — CFPB watchers are anxiously awaiting action from Director Rohit Chopra around big data and payments issues this month. The bureau announced plans last week to convene a special panel to review a proposal that would establish standards for sharing consumer financial data — a key step toward finalizing the rule. Financial firms are also bracing for potential guidance from the bureau this month aimed at addressing increasing fraud on money-transfer and peer-to-peer payment systems, such as Zelle. Senate Democrats have urged the CFPB to do more to push banks to pay back victims of such scams, something the industry has balked at. IT'S TUESDAY — Welcome back! We hope you enjoyed the last unofficial days of summer. We're frankly looking forward to welcoming fall with a Fed press conference and a spiked apple cider — in that order — but not until Sept. 21. Have a tip, story idea or favorite fall drink recipe? Send it our way: kdavidson@politico.com and ssutton@politico.com.
| | A message from Sallie Mae®: Now, more than ever, students and families need help making informed decisions about planning and paying for college. Sallie Mae offers free tools to all students and families so they can confidently calculate college costs, evaluate financial aid offers, and discover and apply for scholarships. In fact, our scholarship search tool helped more than 24,000 students cover $67 million in college costs in 2020. That's why Sallie Mae makes sense. | | | | | | Deputy Treasury Secretary Wally Adeyemo speaks at BPI conference Thursday ... Acting Comptroller Michael Hsu speaks at BPI conference Wednesday … SEC Chair Gary Gensler speaks at the Practising Law Institute event Thursday … CRA Senate Banking Committee hearing on insurance issues Thursday … House Financial Services hearing on accounting and auditing standards Thursday … Fed Governor Chris Waller speaks in Austria Friday … Treasury's Adeyemo speaks at the Hutchins Center at Brookings on Friday. YOU WANNA BET? — Kalshi Inc. may become the New York Stock Exchange of U.S. elections. It just needs to get past federal regulators first. Our Declan Harty reports: " Under the proposal , Kalshi wants to list two new so-called political event contracts based on the question of whether Democrats or Republicans will take over each chamber after the midterms. Investors would be able to wager as much as $25,000 on the outcomes of the elections." Q&A: IMF CHIEF ECONOMIST — Our Victoria Guida sat down with Pierre-Olivier Gourinchas, the chief economist of the International Monetary Fund, on the sidelines of the Kansas City Fed's Jackson Hole conference. Gourinchas told POLITICO that the Fed's toughened stance on inflation could mean that interest rates in the U.S. have to rise even higher than markets expect. "That would weigh down on economic activity," he said. "There is a sense in which the path for growth in 2022-23 is probably getting a little bit narrower." Pro readers can check out the full edited Q&A here. NOT SEEING GREEN — Nearly a decade after Colorado and Washington became the first states to establish legal marijuana markets, most weed companies are still hemorrhaging red ink, our Paul Demko reports. Arguably the biggest barrier: Sky-high taxes that weed companies pay because they're treated like illegal narcotics traffickers under the federal tax code. LABOR DAY — Labor Secretary Marty Walsh tells our Daniel Lipmman and John Harris he has become a reluctant sympathizer to remote work in many contexts. "There's something to be said for flexibility," Walsh said. Get organized: The White House Council of Economic Advisers commemorated the holiday with a blog post outlining how U.S. workers are organizing at a pace not seen in many years.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | PUTIN DROPS THE HAMMER — WSJ's Kim Mackrael and Joe Wallace: "Power prices surged, European currencies hit multidecade lows and governments scrambled to contain the economic hit after Russia cut its main natural-gas pipeline to Europe. The cutoff, which the Kremlin blamed Monday on Western sanctions and said would be long-lasting, realizes the worst-case scenario Europe had been girding for since Russia invaded Ukraine in February." WANTED: PRICE-CAP PARTNERS — CNBC's Karen Gilchrist: "French Finance Minister Bruno Le Maire said on Saturday that efforts by G-7 nations to introduce a price cap on Russian oil would require commitment from the wider international community to be successful."
| | | | A message from Sallie Mae®:   | | | | | | KING DOLLAR — WSJ's Julia-Ambra Verlaine: "Inflation is high, but U.S. consumers' relative purchasing power has never been higher . An index that considers inflation when measuring the dollar's strength relative to currencies of major U.S. trading partners in July topped its previous peak from 2002, showing how the dollar's surge has helped mitigate rising domestic prices." But, but, but — The dollar's strength may be a mixed blessing for the U.S., Allianz's Mohamed El-Erian writes in Bloomberg. FAST FOOD WAGE INCREASES — WSJ's Christine Mai-Duc and Heather Haddon: "A government-appointed council could increase wages for California's estimated half-million fast food workers to as much as $22 an hour starting next year, under a new law signed by Gov. Gavin Newsom Monday."
| | | SUMMER DROUGHT HITS AMERICAN CROPS — WaPo's Laura Reilly: "American corn is on track to produce its lowest yield since the drought of 2012, according to analysts at Rabobank, which collects data about commodity markets. This year's hard red winter wheat crop was the smallest since 1963, the bank's analysts said." BED BATH & BEYOND CFO DIES — Reuters' Kanishka Singh and Akriti Sharma: "Bed Bath & Beyond Inc's chief financial officer fell to his death from New York's Tribeca skyscraper … days after the struggling retailer announced it was closing stores and laying off workers." "On Aug. 23, the company, [CFO Gustavo] Arnal and major shareholder Ryan Cohen were sued over accusations of artificially inflating the firm's stock price in a 'pump and dump' scheme, with the lawsuit alleging Arnal sold off his shares at a higher price after the scheme."
| | | FIRST IN MM — Shayna Strom has been named interim president and CEO of the Washington Center for Equitable Growth, effective today. Strom was most recently a visiting fellow at Johns Hopkins University's SNF Agora Institute and a fellow at the Labor and Worklife Program at Harvard Law School. She also previously served on the Biden-Harris transition team, and was chief deputy national political director at the ACLU.
| | | | DON'T MISS - MILKEN INSTITUTE ASIA SUMMIT : Go inside the 9th annual Milken Institute Asia Summit, taking place from September 28-30, with a special edition of POLITICO's Global Insider newsletter, featuring exclusive coverage and insights from this important gathering. Stay up to speed with daily updates from the summit, which brings together more than 1,200 of the world's most influential leaders from business, government, finance, technology, and academia. Don't miss out, subscribe today. | | | | | | | | By the end of 2023, overdraft fees are expected to fall by 68 percent from 2008 levels, based on voluntary changes banks have made, according to an updated 2021 study from research firm Curinos on behalf of the Consumer Bankers Association. Britain's new Prime Minister, Liz Truss, will face the most daunting economic outlook for an incoming British leader since her political hero, Margaret Thatcher, became the U.K.'s first female prime minister in 1979. — WSJ's Max Colchester The EU needs a new fund to help manage downturns in its member states and pay for green investments, the International Monetary Fund said, as it called for an urgent overhaul of the way the bloc handles public finances amid rising economic hazards. — FT's Sam Fleming
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