On The Money: Business world braces for blue sweep | Federal Reserve chief to outline plans for inflation, economy | Meadows 'not optimistic' about stalemate on coronavirus deal

On The Money: Business world braces for blue sweep | Federal Reserve chief to outline plans for inflation, economy | Meadows 'not optimistic' about stalemate on coronavirus deal
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THE BIG DEAL—Business world braces for blue sweep: Wall Street and business groups are bracing for the possibility of a blue sweep in Washington that would leave Democrats in charge of the White House and both chambers of Congress.

“I would say that’s definitely a concern on a lot of investors’ minds,” said Judy Lu, CEO and founder of Blue Zone Wealth Advisors.

The Hill’s Niv Elis explains why here.

What may happen: With one party controlling Washington, businesses anticipate more sweeping policy changes, which make it harder to plan. Democrats could also use the budget reconciliation process to gut the Trump tax bill with a simple majority, averting the legislative filibuster that requires a 60-vote hurdle for legislation to advance. Republicans used the same tactic to pass the tax law in the first place.

Some doors close, others open: Even so, a Democratic-controlled Washington would be a boon to some sectors.

  • Big corporations could face larger tax bills, giving smaller competitors a leg up. 
  • Renewable energy companies and the nascent cannabis industry could boom.

The unique circumstances in play in 2020 could also profoundly change how businesses think about who controls Washington. Some say businesses would actually benefit with Democratic control of government given Trump’s response to the coronavirus, which has shuttered bars and restaurants, devastated the travel and hospitality industries and left nearly 180,000 dead.



Federal Reserve chief to outline plans for inflation, economy: Federal Reserve Chairman Jerome Powell is set to preview a significant shift in the central bank's approach to price and wage increases as it faces intense political pressure.

In a Thursday speech, Powell is expected to lay out how the Fed plans to fight years of low inflation that the bank fears could weaken the U.S. economy's long-term growth potential. 

  • Fed watchers expect Powell to explain how the Fed will aim for an average of 2 percent annual inflation, its target for nearly a decade, instead of constantly trying to push inflation toward that specific level.
  • The new approach means the Fed may allow inflation to run above 2 percent for longer periods of time instead of raising rates to prevent inflation from exceeding its target.
  • It’s also intended to maximize the economy’s ability to add jobs and boost wages while giving the Fed more room to fight future downturns. 

“What they're really striving for is not higher cost of living per se,” said Skanda Amarnath, director of research and analysis at Employ America, a nonprofit that advocates for Fed policies to maximize job growth.

“It's really that in the event that we have slightly higher inflation, we're also going to see higher wage growth, higher nominal [gross domestic product] growth, and it'll also be associated with slightly better outcomes across the board.”

I break it down here.

Meadows 'not optimistic' about quick end to stalemate on coronavirus deal: White House chief of staff Mark MeadowsMark MeadowsThe Hill's 12:30 Report: Sights and sounds from Inauguration Day Trump leaves White House, promises to be back in 'some form' LIVE INAUGURATION COVERAGE: Biden signs executive orders; press secretary holds first briefing MORE on Wednesday warned he does not expect a quick breakthrough on stalled coronavirus relief talks, floating the possibility that they could drag into an end-of-September government funding fight.

Meadows, during a live interview with Politico, said he hadn't had any recent conversations with Speaker Nancy PelosiNancy PelosiGOP operative installed as NSA top lawyer placed on administrative leave: reports Budowsky: Democracy won, Trump lost, President Biden inaugurated Biden taps career civil servants to acting posts at State, USAID, UN MORE (D-Calif.), beyond his staff reaching out to hers on Tuesday.

"I don't anticipate that we'll actually get a phone call," he said.

Meadows added that he's had "very productive conversations" with House and Senate Democrats, who he argued wanted a deal, but that he didn't expect an agreement in the immediate future.

"I'm not optimistic. I think the Speaker is going to hold out until the end of September and try to get what she wants in the funding for the government during the [continuing resolution]," Meadows said.

The Hill’s Jordain Carney brings us up to speed here.


Congress is expected to need to pass a continuing resolution by Sept. 30 to fund the government and prevent a shutdown just a month out from Election Day. Republicans have been quietly discussing trying to link coronavirus relief to a stop-gap funding bill if the COVID-19 talks get kicked into September.

The state of play: Pelosi bristled when asked earlier this month about delaying coronavirus relief aid until the end of September to combine it with the government funding negotiations.

"People will die," she told reporters at the time.

But coronavirus negotiations between Pelosi, Meadows, Treasury Secretary Steven MnuchinSteven MnuchinPence delivers coronavirus task force report to Biden Treasury imposes additional sanctions on Cuba over allegations of 'serious human rights abuse' Treasury Department sanctions inner circle of Russian agent Derkach for election interference MORE and Senate Democratic Leader Charles SchumerChuck SchumerSchumer becomes new Senate majority leader US Chamber of Commerce to Biden, Congress: Business community 'ready to help' Why pretend senators can 'do impartial justice'? MORE (N.Y.) have gone basically nowhere since talks collapsed earlier this month.