Hello and happy Monday, and welcome back to On The Money. I’m Niv Elis, filling in for Sylvan Lane, with your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL: Treasury Secretary Janet Yellen is slated to make her first overseas trip since being confirmed next month to attend a meeting of the Group of Seven (G-7) finance ministers in London, the department announced Monday.
The meeting of finance officials in the G-7, a group of industrial countries, will take place in London on June 4 and June 5. Prior to traveling to London, Yellen will participate in a virtual meeting with G-7 finance ministers and central bank governors, Treasury said in a statement.
Yellen has been making multilateral discussions a priority as Treasury secretary. One of Yellen’s top agenda items is to reach an agreement with other countries on a global minimum corporate tax rate.
Read more about what’s on Yellen’s agenda from Naomi Jagoda here.
LEADING THE DAY: Interest in cryptocurrencies has surged over the past year, and policymakers are scrambling to catch up. Investors have rushed into major digital currencies such as bitcoin and a growing industry of financial products tied to them, prompting regulators to lay out new rules for a rapidly growing world.
Financial regulators appointed by President Biden have recently pledged to crack down on any manipulation or abuse within the cryptocurrency industry, while advocates for the industry insist the government must lay out clear, consistent rules for all to follow.
Sylvan Lane lays out five reasons why cryptocurrencies are raising alarms here.
- But on the other hand…. Federal Reserve Gov. Lael Brainard said Monday that a cryptocurrency backed by the central bank would provide multiple benefits to Americans.
What you need to know about options to pay for infrastructure: President Biden and lawmakers on both sides of the aisle are interested in enacting infrastructure legislation this year, but face challenges in figuring out how to pay for it.
Biden in late March released a $2.25 trillion infrastructure proposal, called the American Jobs Plan, that he mainly proposes to pay for through higher taxes on corporations. Republicans are interested in a smaller bill, and are strongly opposed to Biden’s proposed corporate tax increases.
The ultimate offsets in an infrastructure bill depend on a number of factors, including the amount of spending and whether legislation is bipartisan or is expected to only get Democratic votes.
The administration has been having discussions with a group of Republican senators, led by Sen. Shelley Moore Capito (R-W.Va.), to see if they can reach a deal on a bipartisan package. GOP senators last month proposed spending $568 billion on infrastructure. The White House on Friday proposed a counteroffer of about $1.7 trillion.
So how are they going to pay for it? Naomi lays out their options here.
- Bonus: Larry Summers made clear where he stands on the question on Monday. The former Clinton Treasury secretary and top Obama economic advisor said that Congress should pay for part of its infrastructure package by repurposing cash approved for emergency COVID-19 spending, an option the GOP has pursued.
Toomey hits Fed over ‘obsession with race’ Sen. Pat Toomey (Pa.), the Senate Banking Committee’s top Republican, sent letters to three of the Federal Reserve’s regional banks complaining about their “obsession with race,” which he said was part of a “highly politicized social agenda unrelated to monetary policy.”
“It is not the proper role of the Federal Reserve to be engaging in political advocacy,” he wrote in separate letters to the chairs of Boston, Atlanta, and Minneapolis’s Federal Reserve banks.
A spokesperson for the Atlanta Fed said the bank had received the letter and that “we look forward to discussing with him how better understanding racial inequality helps the Federal Reserve reach its mandate of maximum employment and ensure economic gains are widely experienced across the population, regardless of race.”
I’ve got more details on the kerfuffle here.
GOOD TO KNOW
- Peloton to spend $400 million to build first US factory in Ohio
- United Airlines offering free travel for a year to promote vaccinations
- Huawei to move toward software development in wake of US restrictions
ON TAP FOR TOMORROW:
- The Senate Finance Committee holds a confirmation hearing on the nominations of Lily Batchelder and Benjamin Harris to be assistant secretaries of the Treasury, Nellie Liang to be an undersecretary of the Treasury, and Johnathon Davidson to be deputy undersecretary of the Treasury at 9:30 a.m.
- Federal Reserve Vice Chairman of Supervision Randal Quarles testifies before the Senate Banking Committee at 10 a.m.
- A House Financial Services subcommittee holds a hearing entitled “”The Legacy of George Floyd: An Examination of Financial Services Industry Commitments to Economic and Racial Justices” at 12 p.m.
OPINION