| | | | |  | | By Sam Sutton | | Presented by |  | | | 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.
| | Securities and Exchange Commission Chair Gary Gensler will head to Capitol Hill this morning for his regularly scheduled grilling at House Financial Services. The committee’s Republicans (and certain Democrats) remain furious with how he’s addressed crypto markets, securities enforcement and rulemaking. They are unlikely to heap praise on him as he parries questions alongside fellow commissioners Hester Peirce, Caroline Crenshaw, Mark Uyeda and Jamie Lizárraga (Uyeda, a Republican, provided Fox Business with a preview of the lines of attack he expects GOP lawmakers to take). Come for the verbal jousting over climate risk disclosures and equity market structure rules. Stay for any signal of how GOP lawmakers will approach their plans to overhaul capital markets now that their powerhouse dealmaker and longtime leader Rep. Patrick McHenry (R-N.C.) is headed for the exit. There are more than a dozen bills, including drafts, on this morning’s agenda. The bulk of that legislation is aimed at providing regulatory relief to Wall Street firms that balked at many of the new rules and guidance that have come out of the agency under Gensler. Rep. Andrew Garbarino (R-N.Y.) wants to streamline reporting requirements for private fund advisers with less than $5 billion of assets. House Majority Whip Tom Emmer (R-Minn.) has a bill that would establish a framework for “venture exchanges” — trading venues for the securities of smaller companies. There are several draft bills that would limit the SEC’s ability to pursue digital asset cases, including one proposal that would exempt decentralized finance networks from the Securities Exchange Act of 1934 — relieving those platforms from having to adhere to rules that apply to most securities trades. With McHenry’s retirement looming, his successor will need to develop a working relationship with Sen. Tim Scott of South Carolina — Senate Banking’s top Republican — if they’re to deliver on any or all of the above. Scott this morning unveiled a major bill that would open up private markets to a greater number of investors, overhaul capital markets rules and dial up congressional oversight of the SEC. Gensler will follow up his appearance at House Financial Services with testimony at Senate Banking on Wednesday. With former President Donald Trump pledging to roll back regulation of Wall Street firms, the agendas being offered by congressional Republicans could offer a glimpse of the approach Trump could take on oversight of capital markets in a second term. IT’S TUESDAY — Your host is tracking developments on the looming longshoremen’s strike. Do you work at the White House? Are you part of the Harris or Trump campaigns? How are you thinking about the political risks of a work stoppage? Let me know at ssutton@politico.com.
| | Federal Reserve Gov. Michelle Bowman speaks at the Kentucky Bankers Association Annual Convention at 9 a.m. … Gensler appears before the House Financial Services Committee for an oversight hearing at 10 a.m. … The Conference Board will release its consumer confidence survey for September at 10 a.m. … Donald Trump will deliver a speech on his tax and manufacturing agenda in Savannah, Ga., at 1 p.m. … The case for lower rates — Chicago Fed President Austan Goolsbee made a dovish case for more interest rate cuts on Monday, per Bloomberg’s Catarina Saraiva and Miranda Davis. “As we’ve gained confidence that we are on the path back to 2 percent [inflation], it’s appropriate to increase our focus on the other side of the Fed’s mandate — to think about risks to employment,” Goolsbee said. “That likely means many more rate cuts over the next year.” — Republican leaders – including Trump – have said that the Fed should have started with a smaller, quarter-point reduction to interest rates. But Atlanta Fed President Raphael Bostic on Monday said going small would “belie growing uncertainty about the trajectory of the labor market,” according to Bloomberg’s Jonnelle Marte. Good on the street — Those comments propelled stock market gains, per Reuters. Meanwhile, with rates tumbling, high-grade corporate borrowers are issuing new debt, Bloomberg’s Olivia Raimonde and Michael Tobin report. … Better late than never? — Last week’s rate cuts won’t be enough to salvage the highly leveraged commercial real estate properties whose lenders have “ run out of patience,” writes The WSJ’s Will Parker. First in MM: BLS needs dough — Two former Bureau of Labor Statistics Commissioners, Erica Groshen, an Obama appointee, and William Beach, a Trump appointee, are the lead signatories of a letter calling on Congress’s top appropriators to allocate more money to the Labor Department’s data collection arm. The bureau’s declining funding has limited its ability to modernize its Current Population Survey, which is used to measure the unemployment and labor force participation rates. “The immediate problems facing CPS are real, urgent, and can be readily solved with some stop-gap funding. In addition, we know that BLS and Census cannot achieve a healthier CPS without development funding for a modernized labor market survey over the next few years,” they wrote.
| | | | A message from Synchrony: Small and mid-sized businesses, from auto shops to home contractors to veterinarians and more, rely on consumer financing to serve their customers and keep their businesses running. Credit continues to be a critical piece of the American economy. For 100 years, Synchrony has continued to connect tens of millions of people and thousands of businesses to fuel economic growth. Credit is key for businesses and the economy; learn more here. | | | | | In arrears — Trump’s latest proposal to cap credit card fees got panned by The Wall Street Journal’s conservative editorial page, which said the former president is “bidding himself into policy and political dead ends.” And despite the fact the proposal has common DNA with ideas that have been floated by the likes of Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Bernie Sanders (I-Vt.), progressives aren’t convinced. “Overlooked in the matter of this proposal for an interest-rate cap: Trump preaches populism as a candidate but practices plutocracy in government,” Christine Chen Zinner, senior policy counsel at Americans for Financial Reform, said. “The Trump administration tried to gut the CFPB, hacked away at investor-protection rules, and backed forced arbitration. His credibility is about as low as it gets on the policy here.” Tension — Vice President Kamala Harris’s nod to the crypto industry over the weekend has set off alarm bells among financial watchdogs. “The cryptocurrency industry has doggedly pursued its mission to flout long standing securities laws and robust SEC oversight,” Revolving Door Project Executive Director Jeff Hauser said in a statement on Monday.
| | | Key Dem undecided on Biden's FDIC pick — Sen. Jon Tester said Monday he is "still gathering input" on Christy Goldsmith Romero’s nomination to chair the FDIC, Jasper Goodman reports. Support from the Montana Democrat, who is facing a tough re-election campaign that could determine control of the Senate, is key to advancing her nomination, which has been in limbo because it hasn't received a vote in the Senate Banking Committee. "We're still taking input," Tester said in an interview. "And the vote might be this week, so we'll gather all that up and figure it out." Banking Chair Sherrod Brown (D-Ohio) said he hoped to hold a vote this week, but it hasn't yet been announced. Senate Democrats urge FHFA to set minimum energy efficiency standard — Eight Senate Democrats wrote to Federal Housing Finance Agency Director Sandra Thompson on Monday calling on the agency to set a minimum energy efficiency standard for new homes built using loans backed by Fannie Mae, Freddie Mac and Ginnie Mae, Katy O’Donnell reports. “This action would support consistency and further the expansion of resilient, energy-saving construction practices across the housing market,” they wrote, noting that “Freddie Mac’s research has found that energy efficiency improvements can reduce risks associated with mortgage-backed securities, in part due to better resale values.”
| | | | A message from Synchrony:   | | | | | Soft for whom? — The WSJ’s Joshua Kirby: “The eurozone economy slowed sharply as the third quarter draws to a close, contrasting still-dynamic growth in the U.S., according to a series of business surveys released Monday. The eurozone surveys suggest that a soft landing from the surge in inflation that accompanied Russia’s full-scale invasion of Ukraine could be in doubt.” Boeing’s blues — Reuters: “Boeing increased its wage proposal to tens of thousands of striking workers on Monday, offering a 30% general wage increase over four years in what it called its "best and final" offer as a work stoppage that began on Sept. 13 drags on.”
| | | | A message from Synchrony: Access to credit creates a positive ripple effect for the U.S. economy. Small and mid-sized businesses, from auto shops to home contractors to dentists and veterinarians and more, rely on consumer financing to better serve their customers. Credit helps consumers manage their spend and pay over time, leading to higher customer satisfaction and loyalty.
Credit continues to be a critical piece of the American economy. For nearly 100 years, Synchrony has offered flexible financing for consumers, which in turn, helps business owners sustain and grow their businesses.
Credit is key for businesses and the economy; learn more here. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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