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Treasury Secretary Janet Yellen is in Asia this week at risk of selling a group of 20 finance ministers untested and, if successful, shutting down Russian war machines and returning world energy prices to Earth. Some people say a good plan.
U.S. officials also believe that a proposal for an oil price cap is essential to avoid catastrophic supply shocks that could cause a global recession when Russia’s oil export restrictions come into effect at the end of the year. I am.
Skeptics say the plan is difficult to carry out and easy to avoid, and worries that Putin will take all his oil and retaliate by returning home.
From the MM host: “Promotion of price caps Is an important diplomatic test for Yellen, who is the first Treasury Secretary to visit Asia, including visits to Japan and South Korea. … If successful, caps could help mitigate the impact of war on energy prices, while at the same time denying access to Russian military income, Treasury officials said before Yellen’s trip. Told the reporters. “The more we talk to different countries about it, the more they understand the concept we are advocating and the rationale for it,” officials said.
What is the rationale? Last month, Treasury officials explained the ideas behind the ideas that they had been quietly working on for months.
Short version: Vladimir Putin continues to earn millions of dollars daily from the sale of Russian oil. Europe will implement new regulations to limit Russia’s maritime oil exports. However, US officials are concerned that it could lead to a plunge in global supply and higher oil prices.
Their alternative: Allow exceptions from European sanctions to importers who agree to buy Russian oil at a significantly discounted price.
Does it work? We talked to very smart people on both sides of this discussion.
As Gerard DiPippo sees, the biggest question is how Putin reacts to this show of force. Even the slightest decline in Russia’s oil production can bring havoc to the energy markets. It may not be a logical decision, but as DiPippo points out, making a sound decision is quite different from Putin’s knowledge.
“His calculation, his ideal, is to break the Western coalition, and energy prices are his best hope to do that,” he said. “I think Russia’s ability to call our bluffs about this is pretty obvious, and it’s dangerous.”
Robin Brooks, chief economist at the Institute of International Finance, believes the plan is effective and said Putin is unlikely to be closed. Russian production is complete. However, he sees that there is little benefit to continuing the status quo, even if it means tackling temporary price hikes.
“What we are discussing is,’How long and how much pain do you have?'” He said.
It’s wednesday — Inflation has brought new life to the “depression recipe”. WSJ’s Josh Jammerson reports.. My personal favorite is my great-grandmother Condon’s Ritz cracker pie, a staple of my home Thanksgiving. (Ritz crackers, egg whites and lotta sugar sleeves are very helpful!)
Consumer price data was released at 8:30 am … A hearing from the House Financial Services Subcommittee on the Community Reinvestment Act proposed a rule at 10 am … Monthly Treasury budget figures are 2 pm Was announced at times
CPI data for this morning — From Bloomberg’s Olivia Rockeman: “Consumer Price Index Probably increased by 8.8% From a year ago, it marks the biggest jump since 1981, according to a median forecast from Bloomberg’s survey. Compared to May, the widely-supported gauge has risen 1.1%, marking the third month showing inflation has increased by at least 1% in the last four months. “
Intrafi survey — Community bankers are not very confident in the Fed. This is the result of a new IntraFi Network survey of nearly 400 small bank CEOs, presidents and other c-suite executives.
According to a quarterly Bank Executive Business Outlook survey conducted at the end of June, 61% of bankers are worried that the Fed will “overcorrect inflation” and raise interest rates too high and too fast. I answered. In the last survey. Almost half (48%) predict a recession by the end of the year, and another 48% predict a recession next year. The full findings will be announced later this month.
MCCONNELL gets Republican backup in US transition to SNARL-China bill — Andrew Deciderio and Sarah Feliz: “The Senate Republicans line up behind the minority leaders. Mitch McConnell Ash Threaten the tank Billions of dollars Law aimed at confronting ChinaDanger the first to get on track to participate in this parliament’s greatest bipartisan achievement.
“McConnell’s threat, Send by tweet While the senators were away from Washington, they aimed to upset the Democratic fledgling efforts to revive their party’s taxes and climate bills, which all Republicans are expected to oppose. Republicans in Kentucky have endorsed the US-China competition bill, known as USICA, but have vowed to block it if the Democrats proceed with separate bills. “
Treasury opens public comments on key crypto reports — Sam Sutton: “The Treasury is seeking public opinion on pending reports. Covering the strengths and weaknesses of digital assets Adoption begins work on important documents ordered by President Joe Biden through his cryptocurrency presidential order earlier this year.
“For consumers, digital assets can bring potential benefits such as faster payments and potential risks, including fraud and fraud-related risks,” said Nelly Liang, Ministry of Finance and Finance. The Deputy Secretary said.
Treasury nominee approaches global tax transactions, Chinese tariffs and inflation — WSJ’s Amara Omeokwe: “Senator pushed Jay ChambordAt a confirmation hearing on Tuesday, President Biden chose to serve as the Ministry of Finance’s chief economic diplomat on global taxation, rising inflation, and the government’s efforts to review Sino-US relations. “
CRYPTO’S STINKING LOW TIDE – Sam Sutton: In an interview with Christie Goldsmith Romero, the Commodity Futures Trading Commission stepped up its investigation into a digital asset business that could have pushed up its balance sheet by being involved in fraud and manipulation as the crypto market shook. He said he was. Romero, a former federal agent who was tasked with investigating fraud related to the bad asset purchase program, said: “There is really nothing to fill or cover it.”
CFTC Chair Rossin Behnam Under the direct supervision of the CFTC, we are fishing to secure the power and funding to bring major crypto exchanges and intermediaries. The existing authorities of financial derivative regulators are limited to eradicating fraud and tampering in the digital asset market.Venum Earlier he said he was expecting a hint About the alleged surge in the aftermath of the famous cryptocurrency explosion-Romero’s predictions have come true.
“We are investigating thoroughly There are many companies and many situations here in the industry, “says Romero. “Recently, many enforcement measures have been issued, but further investigations have begun.”
Housing can provide more fuel for inflation — WSJ’s Nick Timiraos: “The rise in housing costs Set to keep inflation rising this yearCreates another challenge for Federal Reserve officials who want to see signs that price pressures are being eased before delaying the rise in interest rates. According to the Consumer Price Index of the Ministry of Labor, overall annual inflation rose to 8.6% in May, while core inflation, excluding volatile food and energy costs, reached 6%. “
Mark Calabria, Former Federal Housing and Financial Services Director General joined the Evolve Mortgage Services Advisory Board, announced Tuesday. Calabria, whose FHFA director resigned in June 2021, will serve a one-year term on the board of directors.
Diane Ellis I joined IntraFi as a managing director. Ellis recently served as Director of Insurance and Research at the Federal Deposit Insurance Corporation, spending 34 years before retiring in May.
IMF Chief Warning on Debt Crisis —Bloomberg’s Eric Martin: “Crystalina Georgieva, Managing Director of the International Monetary Fund” Warning about the global debt crisis being created Debt repayment costs in vulnerable countries will increase as central banks raise interest rates to curb inflation. At a Devex-sponsored event in Washington on Tuesday, Georgieva said, “What we are seeing now is a crisis at the time of the crisis, and after the pandemic, in addition to the war, the third tightening of fiscal conditions. It’s a shock. “
— —The IMF has also reduced its growth forecastFor the US economy Bloomberg’s Anamonteiro wrote that he raised unemployment estimates this year, next year, and until 2025.
The largest bank in the United StatesReport a double-digit increase in transactionsAs a result of major market volatility caused by global turmoil, including fear of recession, soaring inflation, and Russia’s invasion of Ukraine. — Bloomberg’s Hannah Levitt and Schwam Sahara
Investors are giving shares in a company that pays dividends Look again as they are trying Strengthen your portfolio against rising inflation A sharp drop in asset prices. — Reuters David Randall
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