| | | | |  | | By Kate Davidson and Sam Sutton | 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 . Was Janet Yellen too short for Donald Trump? It's a story that has circulated about the former president's 2017 search for a Federal Reserve chair: Trump liked Yellen, the Fed chair at the time, but wondered aloud whether she was tall enough to helm the central bank. Is it true? No way, Trump told Wall Street Journal reporter Jon Hilsenrath for his new book, "Yellen: The Trailblazing Economist Who Navigated an Era of Upheaval," out next Tuesday from Harper Business . "I don't even know if she's short or not," said Trump, who has met Yellen in person at least twice — once after his inauguration , and again in the Oval Office in October 2017 , to discuss her possible reappointment. "I really don't. I didn't notice. We have a lot of fake news out there," he said in an interview with Hilsenrath, according to an advance copy of the book shared with MM. "She's tall in spirit and in mind." Hilsenrath's book chronicles Yellen's long career as a Washington policymaker — the first woman to lead the Fed and now the Treasury Department — and her 44-year marriage to Nobel Prize-winning economist George Akerlof.
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"Yellen: The Trailblazing Economist Who Navigated an Era of Upheaval" chronicles the Treasury secretary's long Washington policymaking career. | Alex Brandon/AP Photo | Other highlights — Secret confidant: Former Treasury Secretary Larry Summers irked many Biden administration officials in early 2021 when he warned that their stimulus plan would overheat the economy. But not Yellen, apparently. "She had known Summers for nearly fifty years, and took his argument seriously," wrote Hilsenrath. "He could be rough and argumentative, but when Summers spoke he often made a good point, and she thought he was making a reasonable one now." It was a bit awkward: Summers was effectively criticizing the person whose job he had once held. But Yellen had also edged out Summers for the top Fed job in 2013. Hilsenrath wrote: "On the outside, they might have looked like bitter rivals. In fact, Summers and Yellen spoke regularly during her first year as Treasury secretary. The man she had vanquished became her behind-the-scenes confidant on other issues even after he challenged her publicly on the new spending program." Out of the loop: The book also details how Yellen has at times found herself out of step with the Biden White House (something your MM host has covered as well). During a White House briefing two days after Russia invaded Ukraine, President Joe Biden's national security team — led by National Security Adviser Jake Sullivan and his deputy, Daleep Singh — told the president they were ready to move ahead with a plan to cut off Russia's access to its foreign currency reserves, a major escalation. But they hadn't told Yellen, who was also in the briefing, that they planned to make that case to the president, according to Hilsenrath. From the book: Yellen "said she wanted more time to study the issue. She went back to the Treasury and was meeting with [Fed Chair Jerome] Powell and a team of staffers later that day when Italian Prime Minister Mario Draghi called her cell phone and interrupted the discussion. Draghi was an economist and former central banker and went back years with Yellen. He told her it was imperative to act." Yellen and her team agreed to get on board, and the plan was announced that Sunday. The big question: The book doesn't address rumors of Yellen's potential departure, but in a recent interview she told Hilsenrath she intends to stay . "It's been good work and I like doing it, so why would I leave?" IT'S FRIDAY — We're ready for the weekend in spirit and in mind. Have a tip, story idea or feedback to share? Let us know: kdavidson@politico.com and ssutton@politico.com .
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| | | SPEAKING OF PAYMENTS AND CFPB — Sen. Elizabeth Warren (D-Mass.) continued her barrage against the bank-owned payments app Zelle on Thursday, urging Chopra to issue guidance that would force banks to backstop users who have been scammed into authorizing payments. The banking lobby has argued that requiring banks to cover losses incurred through instant payments wouldn't stop fraud. FIRST IN MM: SENATE REPUBLICANS WRITE TO GENSLER — From our Declan Harty: A half dozen Republican senators have penned a letter to SEC Chair Gary Gensler raising concerns about the "operational integrity" of the agency in the wake of a recent Inspector General report detailing how managers within the agency are concerned that the influx of rulemaking activity is straining staff. Led by Thom Tillis of North Carolina, the senators asked Gensler for details about what is being done to address those challenges, warning that "any efforts to ram through hurried rulemaking without proper analysis, deliberation or consideration of downstream negative impacts is nothing short of regulatory malpractice." PUSHBACK — Meanwhile, the CFA Institute and Healthy Markets are saying the SEC fell short on new rules that require mutual and exchange traded funds to provide " concise and visually engaging " shareholder reports. "Given that US investors often don't know what they're paying, or even what they're paying for, it's past time for the SEC to demand basic transparency into trading practices and costs," Healthy Markets President and CEO Tyler Gellasch said in a statement.
| | | MORTGAGE RATES CLIMB — WSJ's Ben Eisen: "Mortgage rates topped 7% for the first time in 20 years , the latest milestone in a rapid climb that has all but paralyzed the housing market. The rate on a 30-year fixed mortgage averaged 7.08% this week, according to a survey of lenders by mortgage giant Freddie Mac. Just seven weeks ago, the rate was below 6%. A year ago it was just over 3%." HELP WANTED — Bloomberg's Alexandre Tanzi: "About 100 million Americans weren't working in early October, according the Census Bureau, and some of the reasons may come as a surprise. Almost half of the respondents are retired, which is to be expected given the size of the baby boomer generation and the fact that many exited the labor market early during the pandemic. Another 12% were either sick from an illness unrelated to Covid or disabled." TREMORS AT AMAZON — Bloomberg's Matt Day: "Amazon.com Inc. projected sluggish sales for the holiday quarter as the e-commerce giant contends with slower growth and consumers cutting their spending in the face of economic uncertainty." ADD ONE MORE — CNN's Matt Egan: "Colorado Sen. John Hickenlooper is pleading with the Federal Reserve to pause its relentless attack on crushing inflation before it does more harm than good. 'High inflation necessitates a response. But the concern is the Fed is doing too much too soon,' Hickenlooper wrote in a letter on Thursday to Fed Chairman Jerome Powell. … "The letter, shared first with CNN, is the latest effort by Senate Democrats to persuade the central bank to stop slamming the brakes on the economy."
| | | CRYPTO'S DC FOOTPRINT SHRINKS — The Block's Kollen Post: "The Celo Foundation has laid off its entire government relations team , The Block has learned. According to four crypto industry sources in Washington, D.C., Celo axed its government relations and lobbying wing on Oct. 26."
| | | President Vladimir Putin, in a speech seemingly aimed more at winning over political conservatives abroad than his own citizens , declared on Thursday that Russia's battle was with "Western elites," not with the West itself. — NYT The European Central Bank raised interest rates again on Thursday and put the reduction of its bloated balance sheet on the agenda, but said "substantial" progress had already been made in its bid to fight off a historic surge in inflation. — Reuters's Balazs Koranyi and Francesco Canepa Credit Suisse Group AG opted to tap investors for a painful multibillion-dollar capital raise to shore up confidence and fund a years-long reshaping that will carve out its investment bank and slash its headcount by 9,000. — Bloomberg's Marion Halftermeyer and Myriam Balezou
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