Displaying items by tag: biden

Biden’s latest $2 trillion stimulus/economic reform bill is stuck in congressional limbo, and that's because not even all Dems are on board. Speaking on behalf of moderates Joe Manchin, Democratic Senator of West Virginia listed an array of suggestions to Biden in order for there to be bi-partisan support. Some of Manchin’s suggestions included means testing and work requirements for expanded child tax credits in order to stop wealthier individuals from taking advantage of the program. Other democratic senator’s ae calling for a smaller corporate tax hike and lower income taxes on weather individuals. Manchin accused staff of adding in provisions that are limiting bi-partisan support, and even having a hard time garnering support in their own party.

FINSUM: The lofty aims of Biden’s original economic reform were a pipe dream, major changes will have to come if they want to have a chance of passing the bill.

Biden recently made his pick for a critical new position at the DOL: head of the Employee Benefits Security Administration. Lisa Gomez has been nominated and is likely to get bipartisan confirmation. Gomez is seen as critical to the redrafting of the fiduciary rule that is taking place at the DOL. Most industry insiders expect the new version of the fiduciary rule to be much tougher, more akin to the original Obama era rule than the currently in-effect Trump version.

FINSUM: The reality is that if a critical new person is being brought on board to lead the effort, it is likely to push back the timeline, or so says Brad Campbell, leading regulatory lawyer at Faegre Drinker, a leading law firm in our space.

Sweeping changes to the financial regulatory landscape are coming quickly. Stemming from changes to the interpretation of a Trump-age exemption are widening the regulatory umbrella. The U.S. The Labor Department is pushing a variety of accounts including annuities to be included in this expansion. Hidden and/or lofty fees in these areas are the source of the concern and lawmakers want the ‘best interests’ of investors in mind. Many companies are sprinting to align themselves with the regulation. Complying will include recordkeeping requirements, new policies and procedures, and new disclosures.

FINSUM: The drastic changes to regulation will really start to come in at the start of the year, and could monumentally alter the annuities market.

President Biden renominated Jerome Powell as Fed Chair on Monday this week in perhaps the purest bi-partisan reaction from the President since he entered office. The news was celebrated on wall street as both the bond and equity markets felt the reprieve. Additionally, Republicans on the senate banking committee rejoiced at the pick given Powell’s historical ties to the republican party. Powell was assumed to be in a close contest for the Fed position with Lael Brainard, but ultimately continuity was valued moving into the next phase of the post-covid recession. Still Powell’s road is difficult moving forward given sluggish employment and growth, and rising inflationary pressures.

FINSUM: This was a wise decision by Biden politically, and markets trust Powell to be dovish even as a republican which is the best of both worlds for the economy.

Inflation is as buzzy as it has been since the 1970s, and the nation’s energy crisis is drawing another parallel to that decade. In an attempt to curb oil prices Biden released the nation's oil reserves hoping to drive down gas prices. However, earlier this year Biden tried to pressure OPEC+ to increase production to put downward pressure on prices and they rejected. Sure, if OPEC+ maintains production or actually increases (as they had stated they would) then prices will fall, but OPEC+ and other oil producers like Russia target a $70+ per barrel price point to optimize their profits. Many are speculating that this will cause OPEC+ to pull back production after their meeting in December, and spark a rift between oil producers and consumers like the U.S.

FINSUM: This is a desperate attempt by Biden to control prices which there has been little to no precedent for in past presidencies. This could blow up by hurting U.S. producers more and leaving oil prices unchanged.