Trump: Janet Yellen “high in spirit”

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Was Janet Yellen too short for Donald Trump?

That’s the story that circulated about the former president’s 2017 search for Federal Reserve chairman: Trump liked Yellen, the Fed chair at the time, but wondered aloud whether she was tall enough to lead the central bank.

Is this true? No way, Trump told Wall Street Journal reporter John Hilsenrath for his new book, Yellen: The Pioneering Economist Who Survived an Era of Turmoil. next Tuesday from Harper Business.

“I don’t even know if she’s short or not,” said Trump, who has met with Yellen in person at least twice — once after his inaugurationand again in the Oval Hall in October 2017to discuss her possible reassignment.

“I really don’t. I didn’t notice. We have a lot of fake news,” he told Hilsenrath in an interview, according to an advance copy of the book provided to MM. “She is high in spirit and intelligence.”

Hilsenrath’s book chronicles Yellen’s long career as a Washington politician — the first woman to head the Fed and now the Treasury Department — and her 44-year marriage to Nobel Prize-winning economist George Akerlaff.

Other points –

Secret Trustee: Former Treasury Secretary Larry Summers angered many Biden administration officials in early 2021 when he warned that their stimulus plan would overheat the economy. But, apparently, not Elena.

“She had known Summers for nearly fifty years and took his argument seriously,” Hilsenrath wrote. “He could be gruff and argumentative, but when Summers spoke, he often made a good point, and she thought he was making a smart point now.”

It was a little embarrassing: Summers was actually criticizing the man in whose position he once worked. But Yelena also had it beat out Summers for the Fed’s top job in 2013.

Hilsenrath wrote: “From the outside, they could look like bitter rivals. In fact, Summers and Yellen spoke regularly during her first year as Treasury secretary. The man she defeated became her behind-the-scenes confidante on other issues, even after he publicly challenged her on the new spending program.’

Out of loop: The book also details how Yellen was at times out of step with the Biden White House (something your host MM has you covered as well as).

During a White House briefing two days after Russia invaded Ukraine, President Joe Biden’s national security team — led by national security adviser Jake Sullivan and his deputy Dalip Singh — told the president it was ready to move forward with a plan to cut off access to Russia its currency reserves, a significant escalation.

But they did not tell Yellen, who also attended the briefing, that they planned to take the case to the president, according to Hilsenrath.

From the book: Yellen “said she wanted more time to study the issue. She returned to the treasury and met with [Fed Chair Jerome] Powell and a team of staff later that day when Italian Prime Minister Mario Draghi called her cell phone and interrupted the discussion. Draghi was an economist and former central bank governor and went back in time with Yellen. He told her that it was necessary to act.”

Yellen and her team agreed to participate, and the plan was announced that Sunday.

The big question is: The book does not address rumors of Yellen’s potential departure, but in a recent interview she told Hilsenrath she intends to stay. “It was a good job and I enjoy doing it, so why would I leave?”

FRIDAY – We are mentally and spiritually ready for the weekend. Have a tip, story idea, or feedback to share? Let us know: [email protected] and [email protected].

PCE data released at 8:30 a.m. … University of Michigan consumer sentiment index at 10 a.m.

THE ECONOMY IS GROWING AND NO ONE IS SATISFIED — WSJ’s Sarah Cheney Cambon: “The U.S. economy grew at an annualized 2.6% in the third quarter, but showed signs of a broad slowdown as consumer and business spending eased under the weight of high inflation and rising interest rates.”

“Despite economic growth in the third quarter, ‘after the recession in the first half of the year, the US economy is undeniably cooling,'” said EY Parthenon’s chief economist. Grigor Dako. “While the US economy remains the cleanest shirt in the world’s laundry basket, it is likely to enter a recession with employment likely to peak before the end of the year.”

— “The upside is that markets may have priced in much of the short-term recession risks,” said LPL’s chief financial economist Geoffrey Roach.

So… what does that mean at next week’s FOMC meeting? From Bank of America Global Research: “The forecast has not changed much … We expect a rate increase of 75 bp. We expect the chairman to open the door to a slower pace of hikes starting in December.”

IS THIS CHOPRA’S MUSIC? — From Kathy O’Donnell and Sam: “The CFPB on Thursday outlined possible ways to implement long-awaited rules on the sharing of financial data in recruitment According to the agency, the proposals will improve consumer access to and control over financial information. “Dominant firms should not be able to hoard our personal data and appropriate its value for themselves,” CFPB Director Rohit Chopra said in a statement.

The reaction of fintech and banking organizations like the Financial Technology Association and the Consumer Bankers Association – which have abandoned data aggregation methods — was generally positive, with executives from both industries saying they were encouraged by the prospect of clearer rules on collection practices. MM will follow up on comment letters.

GIVE THE PIVOT — Our Kelly Garrity: In a letter posted on Twitter Thursday, Elon Musk, “the CEO of Tesla and SpaceX, said he doesn’t want the site to become a ‘free-for-all hellscape where you can say anything without consequence,'” the apparent a rhetorical shift from Musk’s previous promise to change Twitter’s content moderation policy and make the site bastion of freedom of speech.“”

TALKING ABOUT PAGES AND THE CFPB — Sen. Elizabeth Warren (D-Mass.) on Thursday continued its fight against bank-owned payments app Zelle urging Chopra to give instructions this would force banks to provide support to users who have been tricked into authorizing payments. The banking lobby argues that requiring banks to cover losses incurred by instant payments will not stop fraud.

FIRST IN MM: SENATE REPUBLICANS WRITE TO GENSLER — From our Declan Harty: A half-dozen Republican senators have written a letter to SEC Chairman Gary Gensler expressing concern about the agency’s “operational integrity” following a recent inspector general’s report detailing how agency leaders are concerned that an influx of rulemaking is straining staff.

Led by Tom Tillis of North Carolina, the senators asked Gensler for details on what is being done to address these issues, warning that “any attempts at hasty rulemaking without proper analysis, discussion or consideration of the negative downstream effects are nothing but regulatory regulation. negligence”.

OPEN — Meanwhile, the CFA Institute and Healthy Markets say the SEC has failed to comply with new rules requiring mutual and exchange-traded funds to provide “concise and visually appealing“, informs the shareholder. “Given that American investors often don’t know what they’re paying or even what they’re paying for, it’s time for the SEC to require basic transparency about trading practices and costs,” said Healthy Markets President and CEO Tyler Gelosh. in the statement.

MORTGAGE RATES ARE RISING — WSJ’s Ben Eisen: “Mortgage rates exceeded 7% for the first time in 20 years., the latest milestone in a boom that has virtually paralyzed the housing market. The 30-year fixed rate averaged 7.08% this week, according to a survey of lenders by mortgage giant Freddie Mac. Just seven weeks ago, the rate was below 6%. A year ago it was a little over 3%.”

HELP WANTED – Alexander Tanzi from Bloomberg: “About 100 million Americans were out of work in early October, according to the Census Bureau, and some of the reasons may come as a surprise. Almost half of the respondents are retired, which is to be expected given the size of the baby boomer generation and the fact that many left the labor market early during the pandemic. Another 12% were either suffering from a non-Covid illness or disabled.”

EARTHQUAKE IN THE AMAZON — Bloomberg’s Matt Day: “Amazon.com Inc. projected sluggish sales for the holiday quarter as the e-commerce giant struggles with slower growth and consumers cut back on spending amid economic uncertainty.”

ADD ONE MORE — CNN’s Matt Egan: “Colorado Sen. John Hickenlooper referring to the Federal Reserve to halt its relentless attack on crushing inflation before it does more harm than good. “High inflation requires a response. But the concern is that the Fed is doing too much too soon,” Hickenlooper wrote in a letter Thursday to Fed Chairman Jerome Powell. …

“The letter, provided to CNN, is the latest effort by Senate Democrats to convince the central bank to stop holding back the economy.”

CRYPTO DC’S FOOTPRINT IS DECREASING — The Block’s Kollen Post: “The Celo Foundation has fired the entire government relations team, The Block has learned. According to four Washington, D.C.-based crypto industry sources, Celo ended its relationship with the government and its lobbying wing on October 26.

President Vladimir Putin, in a speech seemingly aimed more at victory political conservatives abroad than their own citizens, said Thursday that Russia’s battle is with “Western elites,” not the West itself. — NYT

European Central Bankinterest rates were raised again on Thursday and put shrinking its bloated balance sheet on the agenda, but said it had already made “significant” progress in trying to fend off a historic spike in inflation. — Reuters Balazs Caragna and Francesco Canepa

Credit Suisse Group AG decided to attract investors painful increase of multi-billion dollar capital to boost confidence and fund a multi-year overhaul that will spin off its investment bank and cut its headcount by 9,000. —Bloomberg’s Marion Halftermeyer and Miriam Balezou