White House allies push back on inflation talk

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White House allies push back on inflation talk – Those close to the White House strongly reject the idea that rising prices in the economy are indicative of a longer-term trend that could upend President Biden’s agenda and require swift action from the Fed.

A White House ally notes to MM this “[t]op Republicans as the leader of the minority Mccarthy and senator Cruz have cited lumber prices to attack the administration’s economic policy – but since its peak of the pandemic era (largely due to mismatches between supply and demand as the economy recovers) , lumber prices are now down 40%.

This person added: “Lumber prices fell 18% last week – the biggest drop since 1986.
Supply issues are improving: production increased 5% from a year ago and market indicators suggest further significant declines in timber prices by the first quarter of 2022.

“The increase in supply and the corresponding fall in prices reaffirms the assessment that supply / demand mismatches are transitory.. … One of the four areas of focus of the WH working group is residential construction, with a particular focus on the lumber industry. The administration knows that resilient supply chains are essential to national security, economic security and technological competitiveness. ”

And some fund managers point to the history of timber as well as indicating that inflation crises are not really justified.

David Kotok from Cumberland sends email to MM: “The wood jumped up. The crowd shouted “inflation”. The wood has plunged. Have you heard “deflation”? Watch used car prices flatten and roll over. Look at the oil / gasoline. The cropped mean deviation is essential to observe a “transient” or upward trajectory.

GOOD TUESDAY MORNING – Write to me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.

President Biden in Brussels meets Belgian King Philippe and Belgian Prime Minister Alexander De Croo and participates in the US-EU summit before traveling to Geneva before his meeting with Russian President Vladimir Putin …

The House Financial Services Subcommittee has a hearing at 10:00 a.m. on “Digitization of the Dollar: Investigating the Implications of Central Bank Digital Currencies Technological Infrastructure, Privacy and Financial Inclusion”…

Senate banking services have a hearing at 10:00 a.m. on “21st Century Communities: Local Leaders on the Infrastructure Needs of America’s States, Towns and Cities”… 8:30 am retail sales are expected to drop 0.6% and increase 0.4% excluding automobiles… 0.5% increase in title and core

PREPARING FOR THE HEARING – A loyal MM reader notes on the House Financial Services hearing on a central bank digital currency (CBDC) “None of the witnesses appearing before the committee appear willing or ready to comment on the severe financial stability and other risks linked to a CBDC, and all but one are invested financially or professionally in the widespread adoption of the CBDC. It’s like inviting Tesla’s sales team to a hearing on whether the government should subsidize electric cars.

PRIVATE EQUITY REACT – A little birdie email on the NYT homepage on private equity and taxation: “Blackstone Chairman Jon Gray spoke to company employees about the story on their regular Monday morning webcast titled ‘Blackstone TV’ – saying Blackstone has not made a commitment in the practice of tax reduction which was one of the main thrusts of the article entitled ‘costs waivers.’

He also said that Blackstone’s top executives pay average tax rates of around 45%, including federal, state and local taxes, because they live in the New York area and are among the heaviest taxpayers. from the country.”

NATO SUMMIT DECODING – Our By Ryan Heath: “Ukrainian President Volodymyr Zelensky may need to improve on Twitter. Ringing in the NATO summit Twitter conversation, the Ukrainian leader tweeted this afternoon than Ukraine “will become a member of the Alliance” – a juicy claim that some have interpreted to mean that Ukraine will immediately join the alliance.

“If true, this claim would upset Wednesday’s Biden-Putin summit. Instead, the alliance simply reiterated a 2008 pledge that Ukraine will someday become a member, and President Joe Biden later confirmed – in a press conference held two hours late – that Ukraine did not yet meet the criteria for NATO membership.

THE GOP CONSIDERS A NEW APPROACH TO INFRASTRUCTURE – Our Marianne LeVine and Burgess Everett: “Senate Republicans are considering support for a massive amount of new infrastructure spending – in part because they think it will help kill… Biden’s liberal agenda.

“Minority leader Mitch McConnell has yet to indicate whether he supports bipartisan negotiations over Biden’s plan for roads and bridges that are ruled by the Senses. Kyrsten Sinema (D-Ariz.) And Rob Portman (R-Ohio). But a growing number of Senate Republicans are betting that if a deal is made on this kind of physical infrastructure, Democrats won’t have the votes they need to pass the rest of Biden’s intangible infrastructure priorities, such as the child care and clean energy. ”

BANK TRADE GROUP CALLS FOR STRICT EXAMINATIONS FOR FINTECH – Our Victoria Guida: “Large commercial group of banks argues that FinTech companies that have access to Federal Reserve payment rails should face a similar regulatory scrutiny to that faced by traditional banks .

“While the Fed is considering providing accounts to companies that do not take government insured deposits but obtain some sort of banking charter, the Bank Policy Institute said in a new post that many of the top priorities of bank examiners are still highly relevant to these businesses. ”

THE EARNINGS OF CERTAIN TECHNOLOGY GIANTS TAKE S&P TO ANOTHER RECORD – AP’s Damian J. Troise and Alex Veiga: “Gains from several large tech companies, including Apple, helped the S&P 500 hit a new record on Monday, even as other parts of the market faltered. The benchmark was lower for most of the day, then rose for the last 10 minutes of trading, ending at 0.2%. ”

“AMERICA FIRST” quickly fades with S&P 500 record IN DANGER – Lu Wang of Bloomberg: “US stocks have been on top of the world for years, first surfing the dominance of their tech companies in the pandemic, then paving the way for the vaccine distribution that allowed companies to reopen. The “America-First Trade” helped the S&P 500 Index to a five-year winning streak against its European counterpart, the longest in history. Looks like the streak is about to end.

BITCOIN TOP 40K $ AFTER MUSK SAYS TESLA COULD USE IT AGAIN – Tom Westbrook and Tom Wilson of Reuters: “Bitcoin topped $ 40,000 on Monday, after another weekend of price swings following tweets from Tesla boss Elon Musk, who pushed back criticism of his influence on the market and stated that Tesla had sold bitcoin but could resume transactions using it. ”

FED OFFICIALS MAY CRAY AN EARLIER RATE INCREASE AT THE MEETING – Paul Kiernan of the WSJ: “Federal Reserve officials may signal this week that they plan to raise interest rates earlier than expected following a wave of high inflation readings. In March, the last time they released a quarterly economic forecast, most officials expected the Fed’s benchmark interest rate to be close to zero until 2023 to encourage the upturn in the economy. economy after the pandemic. ”

SKIP INFLATION EXPECTATIONS – NYT’s Jeanna Smialek: “Consumers expect higher short-term, multi-year inflation, according to a New York Federal Reserve Bank survey, a weak but potentially important signal at a time when policymakers are betting that expectations will stay under control as demand and prices rebound from depressed pandemic levels. ”

DIMON SAYS JPMORGAN WELCOMES MONEY ON INFLATION HOPES – CNBC’s Hugh Son: “Jamie Dimon thinks money is king – at least for now. JPMorgan Chase has “effectively stored” cash rather than using it to buy treasury bills or other investments because of the possibility that higher inflation will force the Federal Reserve to raise interest rates, said Dimon Monday at a conference.

“The largest US bank in terms of assets has positioned itself to benefit from rising interest rates, which will allow it to purchase higher yielding assets,” he said.

TAP TREASURY FORMER OFFICIAL GATES FOUNDATION FOR COMMUNITY AWARENESS – Saleha Mohsin of Bloomberg: “The US Treasury Department has selected Antonio White, who previously worked at the Bill and Melinda Gates Foundation, to lead a revamped business liaison office that will focus on marginalized communities, according to people close to it. folder.

TED PICK VS GOLDMAN – Bloomberg’s Sridhar Natarajan and Amanda L Gordon:
“The story at Morgan stanley goes like this: Gary Cohn, then chairman of big rival Goldman Sachs, bragged about wanting to crush Morgan Stanley like a cockroach. When Ted Pick heard this, he broke out. In one of his iconic blue-striped tirades, he ordered the troops in his Morgan Stanley trading floor to stick with Goldman.

“This episode may seem like a footnote in the long rivalry between these two historic companies, but to Pick it now feels like something more. At 52, he’s vying for the top job at Morgan Stanley, while Cohn, 60, has retreated into business after his stint in the Trump White House.

TRANSITIONS – Sarah Bartnicka is currently account manager in corporate and financial communication at Edelman. She was previously a marketing and communications writer for Stikeman Elliott.