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Biden moves to undo Trump legacy on fair housing: Joe Biden ran for president promising to build a more equitable economy, a rallying cry that he’s using to sell his multitrillion-dollar recovery plans to Congress. On Tuesday, his administration took two lower-profile but important steps toward combating discrimination, undoing two Trump-administration initiatives involving fair housing.
The Department of Housing and Urban Development is moving to reinstate two Obama-era fair housing rules weakened under President Donald Trump, marking one of HUD Secretary Marcia Fudge’s most significant steps since she was sworn in last month. The agency will restore key parts of a 2015 rule requiring cities to address residential segregation in order to access federal funds and reinstate a 2013 rule cracking down on unintended discrimination, according to notices posted by the Office of Management and Budget, where the rules are under review.
Biden signed an executive order in January directing HUD to redress decades of racially discriminatory housing policies as one of four executive actions the White House said would “advance racial equity.” Former HUD Secretary Ben Carson had revoked the 2015 rule and attempted to replace the 2013 “disparate impact” regulation with a weaker version — part of a larger effort by the Trump administration to roll back anti-discrimination measures and the enforcement of fair-lending laws.
The 2015 Affirmatively Furthering Fair Housing rule would have required local governments to tackle residential segregation with a checklist of 92 questions before they could tap federal housing grants – a process decried by many municipal officials as complex, onerous and rigid.
The Trump administration suspended its implementation in 2018, withdrawing a key computer tool that localities were supposed to use to track patterns of poverty and segregation. HUD then scrapped it altogether last summer, as Trump pledged to “save the suburbs” from Democrats eager to force low-income housing on them.
Lost in the uproar over Trump’s race-baiting approach, though, were complaints about the rule’s complexity and the cost of implementing it, including from some local Democratic governments. The notice posted Tuesday did not include details on any changes to the rule or its implementation. Localities want more flexibility to tailor the rule to their specific circumstances.
The Senate Banking Committee’s top Republican, Pat Toomey of Pennsylvania, echoed those concerns Tuesday, calling the rule “overly prescriptive” during a hearing on racial discrimination in housing. But the AFFH would give HUD sticks to complement the carrots approach included in the $213 billion housing plank of Biden’s massive infrastructure package, which envisions a new competitive grant program to induce state and local governments to ease restrictive zoning rules. Read more about that debate here.
Earnings season kicks off with JPMorgan Chase, Goldman Sachs and Wells Fargo … House Financial Services holds a hearing on affordable housing at 10 … Federal Reserve Chair Jerome Powell speaks at the Economic Club of Washington at noon … Acting Comptroller of the Currency Blake Paulson and FDIC Chairman Jelena McWilliams speak at the Consumer Bankers Association conference at noon …
BIDEN OFFICIALS BRACE FOR WEEKS-LONG J&J DISRUPTION — Pro’s Erin Banco and Rachel Roubein: “Biden administration officials are preparing for the possibility that the pause in use of Johnson & Johnson’s coronavirus vaccine could last for weeks — and perhaps longer for certain portions of the American population … The Food and Drug Administration and Centers for Disease Control and Prevention recommended the break, citing six cases of a rare and severe type of blood clot among the 6.8 million Americans who have received Johnson & Johnson’s vaccine.”
INFLATION ACCELERATED IN MARCH DUE TO STRENGTHENING ECONOMY — WSJ’s Gwynn Guilford: “U.S. consumer prices rose sharply in March as the economic recovery gained momentum, marking the start of an expected monthslong pickup in inflation pressures. The Labor Department reported Tuesday that the consumer-price index — which measures what consumers pay for everyday items including groceries, clothing, recreational activities and vehicles — jumped 2.6 percent in the year ended March, the highest since August 2018, and rose a seasonally adjusted 0.6 percent in March from February.”
BIDEN ADMINISTRATION IS QUIETLY OBSESSING OVER INFLATION — NYT’s Jim Tankersley: “Even before President Biden took office, some of his closest aides were focused on a question that risked derailing his economic agenda: Would his plans for a $1.9 trillion economic rescue package and additional government spending overheat the economy and fuel runaway inflation? To find the answer, a close circle of advisers now working at the White House and the Treasury Department projected the behaviors of shoppers, employers, stock traders and others if Mr. Biden’s plans succeeded. Officials as senior as Janet L. Yellen, the Treasury secretary, pored over the analyses in video calls and in-person meetings, looking for any hint that Mr. Biden’s plans could generate sustained price increases that could hamstring family budgets. It never appeared.”
HOW NOT TO GET FOOLED BY THE NEW INFLATION NUMBERS — NYT’s Neil Irwin: “We could be on the verge of a golden era for inflation nonsense. If so, its start date may well turn out to have been Tuesday morning, when new data on consumer prices was released. The potential for misunderstanding derives from several forces crashing against one another at once. There are sure to be shortages of some goods and services as the economy creaks back to life, which could create scattered price increases for airplane tickets or hotel rooms or, as has been the case recently, certain computer chips.”
BILLIONS IN COVID AID IS SLOW TO REACH RENTERS, LANDLORDS — WSJ’s Christine Mai-Duc and Dan Frosch: “Overwhelmed state and local authorities are grappling with how to allocate $25 billion in federal rental relief, leaving many tenants and landlords waiting weeks or months for their share. Before the pandemic, Orange County, Calif., spent less than $1 million a year on rental assistance for tenants at risk of eviction. Now, it has to distribute more than $60 million in federal aid to thousands of residents behind on rent because of coronavirus-related hardships.
“State and local governments around the U.S. are scrambling to launch programs to handle the nation’s largest-ever emergency rental-assistance effort, intended to help an estimated 13 million people. Their challenges are similar to those faced in administering Covid-19 testing and vaccine rollouts with resources provided by the federal government.”
FED LEADERS AGREE: ECONOMICS HAS A RACIAL-DISPARITY PROBLEM — AP’s Christopher Rugaber: “Top Federal Reserve policymakers on Tuesday underscored their concern that Black and Hispanic people are sharply underrepresented in the economics field, which lessens the perspectives that economists can bring to key policy issues. ‘If we don’t have a diverse group of people in the field, we won’t have the right topics to focus on,’ said Eric Rosengren, president of the Federal Reserve Bank of Boston.”
STUDENT LOAN PROPOSAL WOULD WIPE OUT DEBT FOR MILLIONS — Pro’s Michael Stratford: “More than 36 million Americans would have their federal student loans completely erased if the Biden administration were to accede to progressive demands to cancel up to $50,000 per borrower, according to new data from the Education Department. The federal data was released on Tuesday by Sen. Elizabeth Warren (D-Mass.), who requested the information from the agency earlier this month. If the federal government were to cancel that amount, 36 million of the 45 million federal student loan borrowers — roughly 80 percent — would have their debt completely eliminated, according to the data.”
IRS CHIEF: SOME $1 TRILLION IN TAXES GO UNCOLLECTED EACH YEAR —Pro’s Aaron Lorenzo: “The amount of taxes going uncollected by the federal government could be as much as $1 trillion or more per year, IRS Commissioner Chuck Rettig said Tuesday. His estimate goes far beyond the official $441 billion difference between taxes paid and taxes owed annually, the so-called tax gap, reported by the IRS, which is based on figures from 2011-2013. The next official estimate will come out next year.”
MONEY MARKET FUNDS, ADVOCATES STAKE OUT POSITIONS AS CRACKDOWN LOOMS — Reuters’ Pete Schroeder and Michelle Price: “Market participants this week staked out their positions on how to fix systemic risks in the $4.9 trillion U.S. money market fund industry, in what is shaping up to be the first big fight for U.S. President Joe Biden’s financial regulators. After taxpayers bailed them out for the second time in 12 years during the pandemic-induced turmoil in March 2020, money market funds — a key source of short-term corporate and municipal funding — are facing a regulatory reckoning which could potentially change the industry beyond all recognition.”
BANKS, AFTER BRACING FOR DISASTER, ARE READY FOR A BOOM — WSJ’s Ben Eisen: “The accelerating economic recovery is likely to boost bank profits. Encouraged by government efforts to pump money into the economy and signs that Americans are spending more, the largest financial institutions are expected to release some of the rainy-day money they set aside after the coronavirus pandemic hit. That will offer a jolt to their income in the first three months of the year.
“JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc. will disclose financial results on Wednesday. Bank of America Corp. and Citigroup Inc. report Thursday and Morgan Stanley follows on Friday. Analysts forecast that all of them will post first-quarter profits that are far above year-earlier levels.”
CRYPTO EXCHANGES USHER IN ERA OF ROUND-THE-CLOCK STOCK TRADING — Bloomberg’s Brandon Kochkodin: “The era of round-the-clock stock trading is here, if you know where to look. Binance on Monday began allowing its non-U.S. based users to trade a tokenized version of Tesla Inc. stock, joining a growing list of cryptocurrency exchanges that are setting their sights on the world of traditional finance. At first glance, the stock tokens might seem like a solution looking for a problem.”