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Trump’s tax problem — No, it’s not just his own returns. I write here about how President Trump’s signature tax cut law remains remarkably unpopular and could prove to be a drag in 2020. It’s part of this reason Trump is in Minnesota to tout the law on Tax Day today and the White House will remain focused on it for the week.
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What’s changed — Via AEI’s Karlyn Bowman: “I think the two major developments on tax attitudes are that Republicans have lost the edge they once had as the party best able to handle taxes … And Democrats seem to be making headway by hammering away at the rich not paying enough.”
Buttigieg gets in — Our Daniel Strauss writes here about South Bend Mayor Pete Buttigieg, already surging in early primary polls, officially joining the presidential field. Mayor Pete, as he likes to be called, faces longs odds of winning the nomination. But his generational appeal for an entirely new politics is clearly resonating.
Here’s what he told me in a recent interview: “So by 2054, when I get to the current age of the current president, the shape of the world then, both environmentally, economically, and beyond, that’s not a theoretical question; it’s a personal one that I have to prepare for just as a human being and I think that gives me a certain sense of urgency around the policy conversation, too.”
GOOD MONDAY MORNING — Congrats to 43-year old Masters champion Tiger Woods, an MM fav for decades, who gives hope to all us aging Gen Xers with bad backs. Email me on firstname.lastname@example.org and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on email@example.com and follow her on Twitter @AubreeEWeaver.
THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Victoria Guida and Patrick Temple-West on the White House’s move to exert greater control over independent government agencies and how it could permanently alter the political considerations behind regulatory actions. To get Morning Money every day before 6 a.m., please contact Pro Services at (703) 341-4600 or firstname.lastname@example.org.
DRIVING THE WEEK — Congress is out on recess … Trump visits Burnsville, Minn. at 1:00 p.m. local time for a tax reform roundtable … Trump speaks at an Opportunity Zones conference on Wednesday … AG Bill Barr has said he hopes to release the redacted Mueller Report this week …
FORGET RECESSION — Deutsche Bank’s Torsten Slok: “We have updated our US economic outlook and we do not see a recession for the next three years. Growth will slow from 3% in 2018 to 2% and inflation pressures will abate and the Fed will stay on hold until the end of 2021 and long rates will stay low.”
GOLDMAN: TRUMP THE FAVORITE — Via a new report led by Goldman Sachs analysts Jan Hatzius and Alec Phillips: “An update and expansion of our prior work on the relationship between the economy and presidential election outcomes suggests that President Trump has a narrow advantage going into the upcoming election.
“First-term incumbents have a built-in advantage of 5-6pp in the popular vote, we find, and our economic forecast also gives the President a slim advantage. A somewhat negative net presidential approval rating only partly offsets this.”
AND HE’S RAISING BIG BANK — Via AP: Trump’s reelection campaign is set to report that it raised more than $30 million in the first quarter of 2019, edging out his top two Democratic rivals combined, according to figures it provided to The Associated Press.” Read more.
WH NOT TOO WORRIED ABOUT MUELLER REPORT — Our Eliana Johnson, Daniel Lippman, and Darren Samuelsohn: “While most of official Washington is on edge ahead of the expected release of special counsel Robert Mueller’s full report, Trump White House aides are shrugging off the fevered anticipation with a simple message: been there, done that.” Read more.
TRUMP GOES AFTER THE FED AGAIN — Reuters’ Howard Schneider: “Trump said on Sunday that actions by the U.S. Federal Reserve have nicked U.S. economic growth and stock market gains by perhaps 30 percent, and that it should begin pumping money into the economy as it did during the 2007-2009 recession.
“Trump’s latest broadside against the central bank, delivered by Twitter and without citing any evidence, came as European Central Bank head Mario Draghi and other international officials worried that a Fed politicized by potential Trump nominees would rattle a dollar-based global system.” Read more.
And it cast a chill at the IMF meetings — WSJ’s Nick Timiraos: “Former Federal Reserve officials and foreign central bankers said … Trump’s combative stance toward the U.S. central bank could over time weaken the institution and its role in the global economy.” Read more.
IN NY PLAYBOOK TODAY — Check out news of a fresh PAC formed by tech companies in New York unhappy with how the Amazon HQ2 saga played out.
NEW ON TAX DAY — Americans for Prosperity has a new letter out today with other organizations “telling Congress that a federal gas tax increase is the last thing Americans need.” Read more.
MNUCHIN SAYS CHINA TRADE TALKS NEARING FINAL ROUND — NYT’s Alan Rappeport: “Treasury Secretary Steven Mnuchin said on Saturday that he believed the United States and China were nearing the final stage of trade negotiations, moving closer to what he said would be the biggest change in the economic relationship between the countries in 40 years.” Read more.
JACK LEW ON MMT — Former Treasury Secretary Jack Lew in remarks at Hofstra at the end of last week: “New economic theories will not erase the cost of servicing the debt, or the risk to our financial future if we simply abandon the notion that there is a limit to how much we can borrow and how much money we can print.”
DON’T GET TOO BULLISH — Mohamed A. El-Erian on Bloomberg Opinion: “Data released last week provided more support for the notion of short-term stabilization in China, but there isn’t yet a convincing longer-term case for higher growth, or for a less uncertain road for a global economy characterized by divergent performance among its systematically most important economies.” Read more.
POWELL NAVIGATES ANGRY PRESIDENT, TURBULENT MARKETS — NYT’s Jim Tankersley and Neil Irwin: “As soon as the Federal Reserve chairman, Jerome H. Powell, finished speaking at his December news conference, it was clear, even to him, that he had blown it. Stocks were tumbling. Analysts worried that the Fed was steering the economy into recession. And …Trump was furious.
“Four months later, Mr. Powell and the Fed have mostly repaired the damage, ending a steady march of interest rate increases and signaling that their next policy move may well be a rate cut if the economy continues to soften. Markets have rallied and recession fears have cooled. But one challenge has only worsened for Mr. Powell: Mr. Trump and his escalating anger at the Fed.” Read more.
Speaking of the Fed, what do you need to be on the board? — WSJ’s Greg Ip: “Neither Stephen Moore nor Herman Cain, political allies that President Trump hopes to put on the Federal Reserve Board, has a Ph.D. in economics. For fans and even some foes, that’s a virtue, not a vice. In these populist times, knowing too much economics means you’re out of touch, arrogant, and wrong. Few institutions have suffered the backlash against elitism and credentialism as much as central banks, which are mostly run by professional economists.” Read more.
WOULD A POLITICAL FED RESCUE THE WORLD? — Reuters’ Howard Schneider: “As a financial crisis spread across the globe in September of 2008, the U.S. Federal Reserve gathered in an emergency atmosphere as requests flooded in from other central banks for access to dollars.
“The ‘swap lines’ that the Fed quickly approved helped ease intense financial stress in foreign markets, but also showed the U.S. central bank was prepared to stand behind the global system. Would an ‘America First’ Fed do the same?” Read more.
S&P 500 NOTCHED 3RD STRAIGHT WEEKLY GAIN — AP’s Alex Veiga: “Stocks notched solid gains on Wall Street Friday, erasing most of the losses the market sustained after an uneven week of trading. The strong finish gave the S&P 500 its third straight weekly gain. The benchmark index is now just under 1% from its most recent all-time high set on September 20, reflecting the strong rebound for the market this year after a dismal slide in December.” Read more.
And the global stock rally has defied a dimming economic outlook — WSJ’s Akane Otani: “Global stocks are rising at the fastest pace in decades as growth around the world slows, leaving many investors questioning how much longer the market can defy the gravity of the underlying economics. Indexes from New York and Europe to China have soared double-digit percentages this year to regain most of their ground after tanking in the fourth quarter, supported by signs that central banks are willing to keep holding interest rates at low levels for the foreseeable future.” Read more.
NEW INVESTMENT FOR RIO TINTO — Per release: “Rio Tinto has committed $302 million of additional capital to advance its Resolution Copper project in the US state of Arizona. The investment will fund additional drilling, ore-body studies, infrastructure improvements and permitting activities as Rio Tinto looks to progress the project to the final stage of the project’s permitting phase.”