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The Biden conundrum: Is he a man of the left or not? — President Joe Biden said he’s willing to drop his corporate tax hike proposal to 25 percent from 28 percent (which MM said long ago was more likely anyway).

But he still wants to cover the costs of his $2-plus trillion infrastructure and jobs plan, creating a rift within a party where many don’t think paying for any of it matters at all. Especially as Republicans did not worry about paying for their 2017 tax cuts.

“I’m open to compromising, yes. It doesn’t have to be exactly what I say,” Biden said about a 25 percent rate. “I’m not willing to deficit spend … They already have us two trillion in the hole.”

That didn’t go ever especially well with a lot on the left, even with quasi-centrists like Jason Furman, former Obama CEA Chair who is now back at Harvard. “If the President is not willing to deficit spend, maybe he would still be open to deficit investing?,” Furman tweeted. “There are a lot of great investments in the Families Plan and the Jobs Plan and lot of investors willing to lend money to finance them.”

This came after Furman himself got in some Twitter trouble for suggesting workers who say they can’t find jobs should perhaps lower wage requests. That’s a perfectly reasonable point to raise in any debate about labor vs. job shortages.

But he got ripped by Obama-administration haters demanding that the Biden White House take a vastly more liberal approach to spending and deficits and simply plow through all GOP opposition.

The fascinating bit is that Biden himself so far seems to be mostly going along with the strongly progressive agenda even as he makes comments like those above about wanting to pay for things. So where is Biden, really?

Is he the mostly-centrist deal-maker who wants to bring in Republicans and worries about fiscal responsibility? Or is he a willing vessel for the highly progressive wing of the party? We have no answers to these questions yet. But we will get them. And they will help define the nature of this presidency.

GOOD THURSDAY MORNING — Yet another Yankee win over Houston. Drink it all in. Email 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 heads to Lake Charles, La. and new Orleans “as part of the Getting America Back on Track Tour to amplify the American Jobs Plan and its investments in water infrastructure” …

House Financial Services at noon holds a remote hearing on “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, Part III” with SEC Chair Gary Gensler and others … Jobless claims at 8:30 a.m. expected to dip to 540K from 553K …

PPP RUNS DRY — Our Kellie Mejdrich: “The Small Business Administration … confirmed that Washington’s nearly $1 trillion small business rescue loan fund has run out of money ahead of its scheduled expiration at the end of this month, in a sign that businesses are still hungry for federal aid as they recover from the coronavirus pandemic. …

“SBA’s statement suggests there’s still a small amount of money remaining to administer the program. But confirmation that funding has run out means businesses will no longer be able to apply for forgivable PPP loans as a financial backstop … News of the funding shortfall set off a flurry of activity among banking groups and lawmakers overseeing the program’s wind-down.

FED PROPOSES FINTECH FRAMEWORK — Our Victoria Guida: “The Fed … proposed a set of principles that would guide how it evaluates applications by financial technology companies to gain access to the Fed’s payment rails, a long-awaited response to fellow regulators’ efforts to broaden the types of companies that can obtain bank charters. …

“The proposed guidelines are intended to ‘ensure requests for access to the Federal Reserve payments system from novel institutions are evaluated in a consistent and transparent manner that promotes a safe, efficient, inclusive, and innovative payment system, consumer protection, and the safety and soundness of the banking system,’ Fed Governor Lael Brainard said in a statement.”

“FAMILIES PLAN” PRICETAG RISES — Our Aaron Lorenzo and Caitlin Emma: “Biden’s ‘American Families Plan’ could cost $2.5 trillion over a decade, or $700 billion more than the White House has projected …

“Budget experts at the Wharton School at the University of Pennsylvania say the proposal could run a higher federal tab thanks to differences in the cost of Biden’s proposed tax credits, in addition to the plan’s universal pre-K and free community college perks. The analysis predicts Biden’s proposal would increase government debt by almost 5 percent by 2050, while decreasing GDP by 0.4 percent over the same period, as the debt burden outweighs productivity gains from the new spending programs.”

DOW ENDS AT RECORD HIGH — Reuters’ Shreyashi Sanyal and Krystal Hu: “The Dow Jones Industrial Average ended at a record high on Wednesday, while Nasdaq gave up its earlier gains and closed in red. Energy and materials continued this week’s momentum, leading gains among S&P 500 sectors. Defensive utilities and real estate led sectoral declines.”

TREASURY ISSUES WARNINGS NATIONAL DEBT LIMIT — AP’s Martin Crutsinger: “The Treasury Department says it will employ measures to avoid an unprecedented default on the national debt this summer, but officials say those measures could be exhausted ‘much more quickly’ than normal given the unusual circumstances of the global pandemic.

“Treasury officials on Wednesday urged Congress to pass either a new borrowing limit or another suspension of the debt before a July 31 deadline. The Treasury will continue to initiate the types of bookkeeping maneuvers it has used in the past to keep the government from breaching a level that would trigger a default on the massive national debt.”

FED OFFICIALS TAMP DOWN OVERHEATING CONCERNS — NYT’s Jeanna Smialek: “Inflation jitters are popping up in earnings call chatter, spooking investors and dominating business television talk shows. One place they aren’t taking over, it would appear, is the Federal Reserve.

“America’s central bank is tasked with fostering maximum employment and stable inflation — making it the first line of defense against rising prices. Fed officials have been clear for months that they expect prices to pop this spring and summer as the economy reopens but that they think the jump will prove temporary. By and large, they are sticking to that script.”

FEDERAL JUDGE THROWS OUT NATIONAL EVICTION MORATORIUM — WSJ’s Andrew Ackerman and Brent Kendall: “A federal judge on Wednesday threw out a national eviction moratorium, saying the Covid-19 pandemic-relief measure exceeded the powers of the Centers for Disease Control and Prevention.

“The CDC, citing public health grounds, had implemented the temporary halt on evictions, extending protections for millions of tenants who have fallen behind on their rent during the pandemic. But a series of conflicting lower court rulings has called into question the legality of the moratorium, creating uncertainty for landlords and tenants alike.”

SEC STUDYING WHETHER NEW RULES ARE NEEDED FOR APPS THAT GAMIFY TRADING — WSJ’s Dave Michaels and Alexander Osipovich: “Wall Street’s top regulator is studying whether to impose new restrictions on brokerage apps that would make it easier for investors to trade stocks and other securities, the Securities and Exchange Commission’s chairman is set to tell lawmakers.

“In testimony prepared for the House Financial Services Committee, Gary Gensler says applications that ‘gamify’ trading — by using appealing visual graphics to reward a user’s decision to trade — might encourage frequent trading that results in worse outcomes for investors.”

FED’S EVANS: POLICY LIKELY ON HOLD FOR SOME TIME — Reuters: “Though much more optimistic about U.S. economic growth and unemployment than just a few months ago, Chicago Federal Reserve Bank President Charles Evans on Wednesday reiterated his worries about reaching the Fed’s 2% inflation goal and said he expects monetary policy to stay super-easy for some time.

“‘Our employment mandate is within sight,’ Evans said in remarks prepared for delivery to the Hyman P. Minsky Conference. But with a projected rise in inflation in coming months likely to be short-lived, ‘achieving our inflation goal may prove more difficult,’ he said, adding: ‘policy is likely on hold for some time.’”

BANKS IN ARCHEGOS AFTERMATH TIGHTEN CREDIT LINES, SCRUTINIZE SWAPS — WSJ’s Juliet Chung, Gregory Zuckerman and Julie Steinberg: “Banks across Wall Street are looking to tighten the lending terms of some of their hedge-fund clients on the heels of Archegos Capital Management’s collapse.

“Firms including Credit Suisse Group AG, Morgan Stanley and UBS Group AG are reviewing their businesses that offer financing to hedge funds and family offices for potential vulnerabilities to safeguard against another Archegos-style event, said bankers and hedge-fund managers.”

ICYMI: BIDEN’S FED CHOICES ADD UNCERTAINTY FOR INFLATION-WARY INVESTORS — Bloomberg’s Craig Torres and Laura Davison: “The biggest uncertainty for investors watching the Federal Reserve in coming months may not be the rate of inflation but turnover at the top of the U.S. central bank.

“Chair Jerome Powell and vice chairs Richard Clarida and Randal Quarles could all potentially be replaced in the coming year, depending on how much President Joe Biden wants to reshape its leadership. And while Fed chairs always matter, the choice right now is even more critical.”

FIRST IN MM: HOW AIRBNB IS LOOKING TO HELP LOCAL ECONOMIES RECOVER POST-COVID — Via Aubree: According to a new Oxford Economic analysis out today, Airbnb guest spending in 2019 supported more than 300,00 jobs across 30 destinations throughout the world — and on average, nine jobs are supported for every 1,000 Airbnb guests who visit.

The study also looks specifically at how tourism activity on Airbnb has supported different industry sectors like restaurants, retail, transportation and entertainment — which were especially hard by Covid-19 and will be key to tourism revitalization as the world reopens. During the pandemic, Airbnb states, hosting offered an “economic lifeline” for many — with 43 percent of Airbnb hosts looking to those funds as an additional source of income needed to stay in their homes.

COMING UP IN SINGAPORE — Bloomberg “announced … an in-person New Economy Forum meeting in Singapore Nov. 16-19.”



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