News: Can Trump riff with a referee?

Tuesday, October 15, 2024

Can Trump riff with a referee?

Oct 15, 2024

Presented by Structured Finance Association

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QUICK FIX

Donald Trump will visit Chicago today to once again pitch the well-heeled members of a major city’s economic club on how high tariffs, low taxes, light regulation and expanded oil and gas production will unlock growth and prosperity.

This time, he will also have to address pesky details about how that agenda could add trillions to the deficit, potentially driving up both inflation and interest rates at a time when the economy is — as Trump described it on Thursday — “a total disaster.” ( It is not.)

Unlike recent speeches in front of the New York and Detroit economic clubs, Trump’s appearance in Chicago at noon will be an interview with Bloomberg Editor-in-Chief John Micklethwait — which means the former president should get pushback if he floats any new, costly but politically expedient policies.

Why does that matter?: New policies kick off new news cycles. And, as one former Trump adviser described it to MM, addressing a financially sophisticated audience like a local economic club can amplify whatever message Trump intends to deliver.

Even if what he proposes is undefined or unworkable, the headlines from concepts like eliminating taxes on tips or creating new deductions for auto loan payments force a reaction from political leaders, policy analysts and – more often than not — his opponent. It’s an opportunity for him to own the day, regardless of whatever shortcomings or fiscal consequences analysts spotlight after the fact. An ancillary benefit is that the analysis can be politically instructive.

“Trump is brilliant at being able to suck all the oxygen out of the room,” another former adviser said, describing the former president’s economic messaging strategy. “He defines the rules of the game.”

But it’s a lot harder to set the rules when there’s a referee on the field. Interviews aren’t speeches, obviously, which should inhibit Trump’s ability to skip over questions about the feasibility of his plan to overhaul the tax code, tear up trade agreements and slash regulations. It will be harder for him to burn the clock — as he did in Detroit — with lengthy diatribes like unfair media coverage, the death penalty or crime. Micklethwait will be able to challenge Trump’s claims in the moment, raising the stakes for this particular visit with an economic club.

That will affect Trump’s message and whatever headlines it may generate. And that can be the difference between owning a news cycle and getting owned by the news cycle.

IT’S TUESDAY — I’ll be at the CAIS Alternative Investment Summit today and tomorrow. If you’re around, let me know, and if you’ve got tips, let me know at ssutton@politico.com.

A message from Structured Finance Association:

Invested in Your Future: The Structured Finance Association represents the market where loans to consumers of all stripes are bundled together into a bond to lower financing costs and reduce the risk of default. We also bring together every market participant, from banks to issuers to investors, to build consensus on the safest and most efficient way to finance America’s real economy. Learn more at www.structuredfinance.org.

Driving the Week

Tuesday … The FDIC’s Systemic Resolution Advisory Committee will meet to discuss systemically important financial companies at 9 a.m. … Acting HUD Secretary Adrienne Todman will speak at a Ginnie Mae and HUD event at 9:15 a.m. … San Francisco Fed President Mary Daly will speak at an NYU Stern School of Business event at 11:30 a.m. … Trump will be interviewed by Bloomberg at the Chicago Economic Club at noon … Fed Gov. Adriana Kugler will speak on a Fed webcast at 1 p.m. … The Peterson Institute for International Economics holds an event on the global economic outlook at 1 p.m. … Atlanta Fed President Raphael Bostic will participate in a moderated conversation with the Gathering Spot at 7 p.m.

Wednesday … Import and export prices for September will be released at 8:30 a.m. …

Thursday … Weekly jobless claims data will be out at 8:30 a.m. … Retail sales data for September will be out at 8:30 a.m. … Industrial production and capacity data will be released at 9:15 a.m. … The Federal Deposit Insurance Corp. meets at 10 a.m. … The Committee for a Responsible Federal Budget has an event on the fiscal impact of the Harris and Trump economic plans at 1 p.m. … The SEC has a closed meeting at 2 p.m. …

Friday … Housing starts and building permits data for September will be released at 8:30 a.m. … Fed Gov. Christopher Waller will deliver remarks on decentralized finance at 12:10 p.m. … Bostic will address the economic outlook at a Mississippi Council on Economic Education Forum on American Enterprise at 12:30 p.m.

Cuban vs. Gensler — Billionaire Mark Cuban has been one of Kamala Harris’s most effective and visible proxies from the business world. His frequent criticisms of the SEC and Chair Gary Gensler have been a source of tension between progressives and corporate Democrats, Declan Harty reports.

“You don’t want people who are engaged and making policy determinations on behalf of the campaign, which they would personally benefit from. I think that’s the danger of him being out there, being so aggressive and really empowered,” said Faiz Shakir, Sen. Bernie Sanders’ 2020 presidential campaign manager. “I don’t hear anybody [on the campaign] saying, ‘Hey, that’s Mark Cuban’s viewpoint, but that’s not ours.’”

— Case in point: The New York Times reports that Harris incorporated language in a speech that pledged tax breaks for companies that allow workers to become part owners after two top advisers — Tony West and Brian Nelson – fielded input from business leaders at Lazard, KKR and the law firm Paul, Weiss.

– The FT: “Barry Diller: ‘I want Donald Trump pushed into the dustheap of history’”

Pity the poor investor — The Harris and Trump campaigns agree on one thing: Investment firms are driving up prices in the housing market with large purchases of single-family homes. But finding a policy solution to the problem — and not everyone agrees it’s a problem — could prove challenging.

“On a practical level, how the federal government could write regulations that limit purchases by a particular kind of corporate entity — I don’t know how you do that,” Jenny Schuetz, a senior fellow at the Brookings Institution’s Metro program, told Katy O’Donnell.

Storms in the insurance market — The damage from Hurricane Milton wasn’t as severe as many had feared, but it could still generate “double-digit” billion-dollar losses in Florida, writes Gary Fineout.

— Moody’s RMS on Monday estimated the cumulative private market insured losses from Milton and Hurricane Helene to be in the $35 billion to $55 billion range.

— The world will need to invest $30 trillion over the next six years if it’s to meet the renewable energy targets set at last year’s global climate summit, according to the International Renewable Energy Agency. The agency’s first progress assessment gave the globe “a failing grade across the board,” writes Zia Weise.

— For the third year in a row, the insurance company AXA’s annual risk survey identified climate change, geopolitical instability and cybersecurity as the top three risks that concern industry experts over the next five to ten years.

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Crypto

Harris pledges regulatory clarity — The crypto lobby scored a major victory on Monday after Harris said she would ensure that cryptocurrency investors “benefit from a regulatory framework” as part of a new economic platform aimed at winning over Black men. It’s the latest sign that she is breaking from President Joe Biden to support the digital asset industry, Jasper Goodman reports.

Crypto wins again — Sen. Mark Warner (D-Va.) nixed crypto sanctions provisions from the intelligence reauthorization bill after receiving pushback from industry lobbyists and Senate Banking’s top Republican Sen. Tim Scott of South Carolina, Eleanor Mueller reports.

— Michael Lukso has joined the Kraken Digital Assets Exchange government relations team as its director for the Americas on the crypto exchange’s policy and government relations team. He was previously the lead Democratic lobbyist at the American Investment Council.

The Economy

Nobel Prize — The WSJ’s Paul Hannon: “The Nobel Prize in Economic Sciences was awarded to Daron Acemoglu, Simon Johnson and James Robinson for work that advanced the understanding of differences in prosperity between countries.”

Slow and steady — Fed Gov. Christopher Waller on Monday said that future interest rate cuts merited "more caution" moving forward, according to Reuters.

Kashkari eyes cuts — Minneapolis Fed President Neel Kashkari said it’s likely that “further modest reductions” in interest rates will be appropriate in the coming quarters. “Ultimately, the path ahead for policy will be driven by the actual economic, inflation and labor market data,” Kashkari said Monday at a conference held by the Central Bank of Argentina, according to Bloomberg’s Amara Omeoke.

Wall Street

Opposite directions — Analysts are cutting forecasts for corporate earnings. Meanwhile, CEOs are putting out new guidance saying they’re poised for another strong quarter, Bloomberg’s Michael Msika and Sagarika Jaisinghani report. “Margins should keep marching higher as companies emphasize efficiency amid economic uncertainty,” wrote Gina Martin Adams, chief equity strategist at BI, in a recent note.

So much for price sensitivity — New Starbucks CEO Brian Niccol is pulling back promotions and discounts in a bid to restore the company’s reputation for selling “handcrafted, premium coffee,” writes Heather Haddon for The WSJ.

The dirty money fueling the housing crisis — Foreign buyers are using luxury U.S. real estate “as places to park ill-gotten wealth,” University of Massachusetts Amherst economists James Boyce and Léonce Ndikumana write for POLITICO. That has distorted prices in major urban real estate markets and pushed up prices for ordinary Americans.

— Speaking of luxury real estate: Long Island waits for you if you have $50 million and want to buy Billy Joel’s palatial estate in Oyster Bay, according to The NYT.

Fly Around

China stimmy — China’s Finance Minister Lan Fo’an on Saturday said there would be more details on how the government plans to support its flagging property sector and highly indebted local governments when its legislature meets in the coming weeks. The consequences for the outlook for global economic growth could be significant. “The policy to support consumption sounds quite weak,” said Jacqueline Rong, chief China economist at BNP Paribas SA, according to Bloomberg.

Starmer nixes tax hike — U.K. Prime Minister Keir Starmer said he is not considering raising capital gains taxes to as high as 39 percent, according to Bloomberg.

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