| | | | |  | | 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.
| | | Joe Biden and Kamala Harris could not sell voters on the strength of the U.S. economy. Now, Donald Trump is poised to enter the White House with booming markets and solid growth. Expect him to reap the political rewards. The long-term consequences of the highest inflation in four decades are still dragging down consumer sentiment, and Trump fueled that pessimism on the campaign trail by relentlessly arguing that the economy was in a freefall. With the election over, he’s likely to have a much easier job convincing Americans that times are actually pretty good. “Trump is an extraordinarily effective brander and marketer. He’s just more confident,” Joseph LaVorgna, who was chief economist for Trump’s National Economic Council, told your host in a new story this morning. “And confidence is everything.” The U.S. has been a rare bright spot in the global economy, and it’s remarkable that Democrats weren’t able to generate political momentum from a domestic hiring and consumer spending boom. Politically toxic inflation has been falling for more than two years, gas costs are down, and price growth for groceries has dipped well below 2 percent, but “Bidenomics” and Harris’s plans for an “opportunity economy” failed to resonate with voters. Trump played a big role in assuring the economy would remain a vulnerability, hammering the administration for creating an “economic catastrophe” after he had handed them a “perfect economy.” But some of the president-elect’s favorite gauges for assessing economic performance have been humming. The stock market repeatedly hit record highs in recent months, even before his re-election sent traders into a frenzy. The economy grew at a healthy 2.7 percent rate over the last year. And even though the labor market has been choppy lately, the jobless rate has fallen well below where it was when he left office. Incoming presidents who defeat an incumbent party are rarely dealt so strong a hand. For Trump, who has long treated high-level economic data as a scorecard, the challenge will be to convince the public that the economy’s current trajectory is a result of his return to power. Some of his top allies on Wall Street — including financiers in line for top roles in his administration — have been cranking out op-eds and cable news hits to trumpet how markets surged after he was re-elected. (Trump, for his part, made a point of attributing a market surge earlier this year to his ascendance in the polls.) Still, the economic tailwinds behind Trump aren’t guaranteed to continue once he takes office. “Even if he does everything perfect — and I don’t think he will — we’re not going to see the 3 percent growth we’ve seen” in recent quarters,” said Jason Furman , a Harvard professor who was one of President Barack Obama’s main economic advisers. IT’S FRIDAY — Know anything about what’s going on with the Treasury pick? Have any details on how Howard Lutnick or Scott Bessent are working the refs? Is there a dark horse we don’t know about? I want to know. As always, send suggestions and tips to ssutton@politico.com and @ssutton.
| | | | A message from America’s Credit Unions and the Independent Community Bankers of America: CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: America’s approximately 9,000 credit unions and community banks are united in opposition to the Durbin-Marshall Credit Card Bill because credit card routing mandates harm local financial institutions and the communities they serve. Durbin-Marshall jeopardizes access to credit for 140 million credit union and community bank customers. Congress can expect to hear from all 140 million of us this fall. | | | | | The import price index will be out at 8:30 a.m. … U.S. retail sales data for October will be out at 8:30 a.m. … Sanjay Wadhwa, acting director of the SEC’s division of enforcement, speaks at the Institute on Securities Regulation at 9 a.m…. Bessent’s pitch — Jasper Goodman has a deft follow-up to Wednesday’s Morning Money about how aspirants for top positions in Trump 2.0 are hitting the cable news circuit to find an audience with their (potential) future boss. Scott Bessent, a former George Soros protege who emerged as one of Trump’s top economic advisers during the campaign, hit Fox & Friends on Thursday morning to lay out how the next iteration of the administration will usher in “a golden age for the next four years.” “Everyone asks me: What do you tell President Trump he should do?” Bessent said, per Michael Stratford. “I don't have to tell Donald Trump he should do anything. He's done it. We had a great economy under Trump 1.0.” — Semafor’s Burgess Everett and Liz Hoffman report that South Carolina Sen. Lindsey Graham is in Bessent’s corner. “I think he’d be outstanding. He’s from South Carolina, I know him well, he’s highly qualified,” Graham said. “I think he’s been well-vetted.”
| | | | REGISTER NOW: Join POLITICO and Capital One for a deep-dive discussion with Acting HUD Secretary Adrianne Todman, Rep. Darin LaHood (R-IL), Rep. Ritchie Torres (D-NY) and other housing experts on how to fix America’s housing crisis and build a foundation for financial prosperity. Register to attend in-person or virtually here. | | | | | | | There’s one domino — Trump has picked former Sullivan & Cromwell partner Jay Clayton to lead the Southern District of New York, making the former SEC chair the top prosecutor for high-profile white-collar and corruption prosecutions emanating out of the Big Apple. Clayton had also been in the running to lead Treasury. — Trump named two of his own defense attorneys to top roles at the Justice Department. Todd Blanche, a former federal prosecutor who defended Trump in his New York criminal trial earlier this year, has been tapped to serve as Deputy Attorney General. Emil Bove, also a former federal prosecutor, was selected to serve as Principal Associate Deputy Attorney General. — Trump also announced that he’s picked Dean John Sauer to serve as Solicitor General. Sauer is a former federal prosecutor who was Missouri’s solicitor general from 2017 through 2023. Not in it — Former Commodity Futures Trading Commission Chair Chris Giancarlo took his name out of contention to lead the Securities and Exchange Commission, Declan Harty reports. “I’ve made clear that I’ve already cleaned up [an] earlier Gary Gensler mess [at the CFTC] and don’t want to have to do it again,” Giancarlo said in a post on X, referring to the current SEC chair who also led the CFTC during the Obama administration. Healthcare one-fifth of our economy — Which means it’s probably worth mentioning that Trump has asked Robert F. Kennedy, Jr. to lead the Department of Health and Human Services. POLITICO’s Meridith McGraw and Chelsea Cirruzzo broke the news of the anti-vaccine advocate’s selection. Shares of pharmaceutical companies that produce important vaccines fell on the news, Nathan Bomey and April Rubin of Axios report.
| | | | A message from America’s Credit Unions and the Independent Community Bankers of America:   | | | | | China investment crackdown still on the table in lame duck — Rep. Andy Barr, who is playing a leading role in House GOP negotiations over legislation to restrict U.S. investments in China, told Jasper Goodman that lawmakers are still working toward a deal that could come together before the end of the year. House Republicans have long been at odds over how to curb U.S. capital from flowing to China. National security hawks including Foreign Affairs Chair Michael McCaul (R-Texas) have pushed to restrict U.S. firms from investing in certain sectors of the Chinese economy. But they have met resistance from the more business-friendly leaders of the House Financial Services Committee, including Chair Patrick McHenry (R-N.C.), who want a narrower approach using sanctions. Barr, who favors the sanctions approach but has been working to reconcile Republicans' differences over the issue, said he hopes a deal could come together, but declined to comment on what remains outstanding. "I still have a few conversations that I have to have," he said in an interview. "I'm talking to all the chairmen." Brown eyes regulator hearing, next moves — Senate Banking Chair Sherrod Brown told reporters Thursday to "stay tuned" for a hearing with banking regulators in the lame duck, Eleanor Mueller reports. The committee missed the deadline to notice a hearing on Nov. 19, as floated prior to the election. "That doesn't mean it's canceled," the Ohio Democrat said. House Financial Services will stick to its pre-election plan to hear from banking regulators on Nov. 20. Also on Thursday, Brown said he was "staying till the end" of his six-year term in December. As for what comes after that? "I have some people talking to me, but I don't know yet." Huizenga to introduce FDIC resolution — Michigan Republican Rep. Bill Huizenga will introduce a resolution today that would call for FDIC Chair Martin Gruenberg to be removed from his position "effective immediately," Eleanor reports. MM got a first look at the resolution text, which alleges "Gruenberg oversaw and contributed to the toxic and abhorrent workplace" at the FDIC and "should not be the person to lead a cultural transformation at the agency." Gruenberg is among the regulators expected to testify before House Financial Services next week. Hill rolls out his pitch for Financial Services gavel — Arkansas Republican Rep. French Hill on Thursday announced his plan for how he'd guide House Financial Services if given the chance, Jasper reports. Hill's branding his agenda as "Make Community Banks Great Again," in a nod to his ability to coordinate with the president-elect. Among his proposals: blocking banks from denying service to certain customers based on their industry; making fewer banks subject to CFPB oversight; and automatically approving stalled bank mergers.
| | | | The lame duck session could reshape major policies before year's end. Get Inside Congress delivered daily to follow the final sprint of dealmaking on defense funding, AI regulation and disaster aid. Subscribe now. | | | | | | | No rush — Federal Reserve Chair Jerome Powell on Thursday signaled that the central bank isn’t feeling pressure to reduce interest rates. “The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said at a talk in Dallas, per The WSJ’s Nick Timiraos. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.” — Of course, that wasn’t the only news made by Powell. Victoria Guida reports that the central bank will consider changes to the framework underpinning its monetary policy to reflect that interest rates are much higher now than they were before the pandemic. — Reuters: “Fed's Powell declines to say if he would remain after chair term expires” Basel III endgame update — Bloomberg’s Alastair Marsh and Nicholas Comfort: “US regulators led by the Federal Reserve have refused to endorse a plan that would have seen the Basel Committee on Banking Supervision push lenders to disclose their climate risk, according to people familiar with the matter.”
| | Big Swing — Katy O’Donnell reports: “The Consumer Financial Protection Bureau is moving to place Google under formal supervision, a designation that could subject the tech behemoth to the same scrutiny imposed on large banks and credit unions. The agency has the power to place non-depository firms it deems to be a risk to consumers under supervision, a process that gives government examiners access to internal records.” — Reuters: “ US FTC plans to investigate Microsoft's cloud business” Khan’s friendly nod — Federal Trade Commission Chair Lina Khan gave a shout-out to two powerful Republicans who’ve praised the agency’s work on merger enforcement. “I'm grateful & appreciative of the bipartisan support from that work, including Vice President-elect [JD] Vance and former Congressman [Matt] Gaetz who I understand was just announced as future Attorney General,” she said. “That will be terrific for the bipartisan work to continue.” (h/t Andy Jung).
| | It’s the friends we made along the way — Crypto executives have blasted how SEC Chair Gary Gensler regulated their industry. On Thursday, Gensler defended his approach, arguing that he was “proud to follow on and continue on Chair Clayton's leadership. And I say this because we didn't actually differ much,” per Courtney Degen of Pensions & Investments. Armstrong likes the Bitcoin Act — Coinbase’s Brian Armstrong, the top executive at one of the most powerful firms behind crypto’s ascendant Washington lobbying operation, endorsed Wyoming Sen. Cynthia Lummis’s call for Congress to pass a bill that would establish a strategic reserve of bitcoin. “We should do this,” he wrote on X. The raid on Polymarket — The leaders of the popular election betting marketplace Polymarket went after the Biden administration following an early morning FBI raid of CEO Shayne Coplan’s home, Declan reports. “It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents,” Coplan, a 26-year-old entrepreneur who founded the crypto-powered better marketplace, wrote on X.
| | — Managed Funds Association President and CEO Bryan Corbett sent a letter to Trump encouraging the president-elect to “review harmful rules finalized over the last several years and cut unnecessary red tape.” The industry group, which represents private equity firms, hedge funds and private credit managers, clashed repeatedly with Biden administration regulators. — Yesterday’s edition included an errant link to a new podcast hosted by our friends at the Peterson Institute for International Economics. We’re reupping so you can check out the debut episode of PIIE Insider LIVE.
| | | | A message from America’s Credit Unions and the Independent Community Bankers of America: CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: The Durbin-Marshall Credit Card Bill would create harmful new routing mandates on credit cards that would put consumer data and access to credit at risk. The threat of Durbin-Marshall to small financial institutions is so clear that America’s approximately 9,000 credit unions and community banks across America are opposed to the bill. Credit unions and community banks also see through the so-called “carveout” for smaller banks, an unworkable policy designed to disguise the negative impact of this legislation. Our message to Congress is simple: on behalf of 140 million credit union and community bank customers in all 50 states, commit to opposing the Durbin-Marshall Credit Card Bill. Lawmakers who choose not to support their local financial institutions can expect to hear from our 140 million customers this fall. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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