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Fed will focus on reining in inflation, Powell says

Appearing before the  and the , Federal Reserve Board Chair Jerome Powell refused to be drawn into any discussions of fiscal policy, emphasizing the Fed’s focus on bringing inflation back to its target level of 2%.

Powell acknowledged that the Fed had been mistaken in its original expectation that inflation would be transitory, but said he thought it was still possible to negotiate a “soft landing” that stabilizes prices without pushing the economy into recession. He noted that the employment rate remains strong, with unemployment at only 3.6%, and said that inflation in the US was more demand-driven than inflation in Europe, so more responsive to the Fed’s monetary tools.

Members on both sides of the Hill drummed in their constituents’ concerns about rising energy, food, and housing prices. Senator Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA) warned against rate increases that would lead to layoffs or wage reductions, while Rep. Andy Barr (R-KY) warned against regulatory policies that would steer capital away from the energy sector. Members of both parties pressed Powell to suggest non-monetary policy remedies for inflation, reminding him that he had called for a fiscal response to the pandemic-fueled downturn in 2020. Powell said would no longer take any position on policy proposals, since involvement in anything political would jeopardize the Fed’s independence.

House panel approves privacy bill

The House Energy & Commerce Subcommittee on Consumer Protection and Commerce approved an amended version of , the American Data Privacy and Protection Act, bipartisan legislation to create a comprehensive data privacy framework. Known as the “three corners” bill because it has the backing of House Energy & Commerce Chair Frank Pallone (D-NJ), ranking member Rep. Cathy McMorris Rodgers (R-WA), and Senate Commerce Committee ranking member Senator Roger Wicker (R-MS), the bill would preempt state laws, with certain exemptions; preserve a narrow private right of action; and exempt small businesses from some requirements. It would also create a new privacy bureau within the Federal Trade Commission (FTC). Chair Pallone noted that the version of the bill passed yesterday included “numerous changes” from the original discussion draft, and he expects to continue to “refine these provisions through productive discussions.”

House Financial Services Committee approves ILC ban

The House Financial Services Committee , including , the bill offered by Rep. Jesús “Chuy” Garcia (D-IL) to prohibit FDIC insurance for new state-chartered industrial loan companies (ILCs). The bill would grandfather ILCs that had or had applied for federal deposit insurance as of September 23, 2021. Other bills passed included , which would extend Fair Debt Collection Act protections to small businesses; , which would authorize $100 billion for a new HUD program to provide down payment assistance for first-time, first generation homebuyers; and , which would modify the Financial Crimes Enforcement Network’s (FINCEN’s) whistleblower program.

CFPB announces review of credit card late fees

The Consumer Financial Protection Bureau (CFPB) issued an  on credit card late fees and late payments, asserting its authority under the CARD Act of 2009 and Regulation Z. The ANPR seeks public comment about how card issuers set fee amounts, what effects these fees have on cardholder behavior, what methods card issuers use to facilitate timely payments, how card issuers use the “safe harbor” provisions of Regulation Z, and card issuers’ revenues and expenses related to their credit card operations. “Public input will inform revisions to Regulation Z,” the Bureau said. Comments are due to the CFPB on July 22.

SEC publishes list of 53 pending rules

The Securities and Exchange Commission (SEC) has 26 proposed rules under consideration and 27 rules pending finalization, according to the  published. SEC Chair Gary Gensler said that the proposed rules addressed all three parts of the agency’s mission: investor protection; maintaining fair, orderly, and efficient markets; and facilitating capital formation. The proposals designated as in the “Final Rule Stage” are scheduled to be finalized in October 2022 or April 2023.

Bank stress test results show strong capital levels

The Federal Reserve Board published , which found that all banks tested remained above minimum capital requirements. The 2022 hypothetical scenario was more challenging than last year’s, positing a severe global recession with substantial stress in commercial real estate and corporate debt markets; 5.75% unemployment, rising to 10%; and a concurrent drop in GDP, and asset prices. Banks projected aggregate losses of $612 billion under the test, but would still have common equity capital levels of 9.7%, more than double the minimum requirement.


Confirmations, Nominations, Departures


President Biden will appoint Marilynn Malerba, Chief of the Mohegan Tribe, as Treasurer of the United States. Malerba, a registered nurse and former hospital executive, currently serves as a member of the Treasury Tribal Advisory Committee.


The Week Ahead in Washington


The Senate is in recess until July 11.

June 28 at 11:00 am House Homeland Security & Governmental Affairs Subcommittee on Intelligence & Counterterrorism holds a hearing on “

June 28 at 12:00 noon House Financial Services Subcommittee on Oversight & Investigations holds a hearing on “.”

June 28 at 1:00 pm The Federal Deposit Insurance Corporation’s to discuss the agencies’ Notice of Proposed Rulemaking to modernize the Community Reinvestment Act.

June 29 at 11:00 am House Science, Space, and Technology Subcommittee on Investigations and Oversight holds a hearing on “.”

June 29 at 12:00 noon House Committee on Financial Services holds a hearing on “.”

June 30 at 12:00 noon House Financial Services Task Force on Financial Technology holds a hearing on “.”


The Ellis Insight
Jim Ellis on Political News



Alabama: As the post-primary polling unanimously foretold, Katie Britt, the former president and CEO of the Business Council of Alabama organization and ex-chief of staff to retiring Sen. Richard Shelby (R), won the Republican US Senate nomination with a landslide 63-37% margin over Alabama US Rep. Mo Brooks (R-Huntsville) in last Tuesday’s runoff election.

Ms. Britt’s victory was complete in that she carried 66 of Alabama’s 67 counties en route to claiming the party nomination, and a veritable ticket to the US Senate. She now faces pastor Will Boyd who won the Democratic nomination outright on May 24 in what will prove to be a perfunctory general election in this safely Republican state.

Madison County Commission chairman Dale Strong (R) defeated former Deputy Army Secretary Casey Wardynski with just over 63% of the Republican runoff vote. Like Ms. Britt, Mr. Strong has punched his ticket to Washington.

The FiveThirtyEight data organization rates AL-5 as R+32, leaving little doubt that Mr. Strong is now the prohibitive favorite to defeat Democratic nominee Kathy Warner-Stanton who won her party’s nomination outright in the regular primary contest.

Georgia: Georgia proved another tough election night for former President Donald Trump, as his two key candidates in House runoff races, Jake Evans in created open District 6 and Vernon Jones in the open 10th CD, both went down in landslide proportions. These results, added to Trump candidates David Perdue and Rep. Hice losing the Governor and Secretary of State’s races in the May 24 primary, suggests that the Peach State will likely prove to be Mr. Trump’s worst endorsement state.

Dr. Rich McCormick, a retired Navy physician who was the 7th District GOP nominee in 2020, scored a 67% win over Mr. Evans. In District 10, businessman Mike Collins, a trucking company owner and son of the late former Congressman Mac Collins, recorded almost 75% of the runoff vote.

Virginia: As predicted, state Sen. Jen Kiggans (R-Virginia Beach), a US Navy veteran and nurse practitioner, topped a field of four Republican candidates with a convincing 56% of the vote. She will now oppose Rep. Elaine Luria (D-Norfolk) in what promises to be one of the most hotly contested GOP challenger races in the country.

Moving to northern Virginia, Rep. Abigail Spanberger’s (D-Glen Allen) politically marginal 7th CD produced a general election Republican challenger. Prince William County Supervisor and former law enforcement officer Yesli Vega defeated five GOP opponents on her way to a tight 29-24-20% victory spread. The Spanberger-Vega general election will be hard fought. While the Congresswoman has a slight advantage in partisan voting history, the potential turnout pattern suggests that this seat is still very much in play for a potential GOP upset.


North Carolina: Reported on a Survey USA poll (6/8-12; 650 NC likely voters; online) that gave Democratic former state Supreme Court Chief Justice Cheri Beasley a 44-40% edge over US Rep. Ted Budd (R-Advance) in the open North Carolina Senate campaign. The Cygnal polling firm released its latest data (6/17-19; 600 NC likely voters; live interview & text) that projects a different conclusion. These results show Rep. Budd holding a virtual mirror image 45-40% lead. Of those definitely voting for one candidate or the other, Rep. Budd leads in that response, 38-31%.

Pennsylvania: Two surveys, a combined poll from Republican firm Fabrizio Ward & Associates and the Democratic Impact Research entity (6/12-19; 1,382 PA likely voters; live interview & text), and Suffolk University (6/10-13; 500 PA likely voters; live interview), both find Democrat John Fetterman leading Republican Mehmet Oz even though the Democratic fundamentals in terms of direction of the country, views on the economy, and wanting their vote to be a message to Washington, are inconsistent with support for the party’s nominee. Fabrizo/Impact finds Fetterman’s advantage at 50-44%. Suffolk finds a similar 46-37% split in Mr. Fetterman’s favor.

Utah: Coming on the heels of a Dan Jones & Associates survey (5/24-6/4; 810 UT registered voters) that found Sen. Mike Lee (R) holding only a 41-37% lead over Independent Evan McMullin, who has coalesced with the Democrats, a new WPA Intelligence poll puts the Senator in much better position. According to the WPA results (6/14-16; 300 UT likely general election voters) the Senator’s lead is 52-33%. Both surveys have issues. The Dan Jones poll has a very long sampling period and is of registered and not likely voters. The WPAi survey has a sampling university of only 300 individuals, which is low for a statewide study in Utah.


AK-AL: Surgeon Al Gross, who was the 2020 Democratic US Senate nominee against Sen. Dan Sullivan (R) but running as an Independent in the US House special election, decided to end his campaign. Dr. Gross had qualified for the four-candidate runoff with his third place finish in the special primary on June 11. He simply said he had “great hope for Alaska” in his departing statement but did not offer a particular reason for making the decision to prematurely end his campaign.

Officials from the Alaska Division of Elections, grappling with the new top-four qualifying system, have changed their initial ruling after finalist Gross announced his withdrawal decision. The Division officials initially were leaning toward placing the fifth place finisher, Republican Tara Sweeney, into the group of four finalists, but they have since reversed themselves.

Therefore, the final ruling does not add a replacement for Dr. Gross, meaning that only former Governor Sarah Palin, businessman Nick Begich, III (R), and former state Rep. Mary Peltola (D) will advance into the special general election scheduled for August 16. Ms. Sweeney followed with an announcement that she will not challenge the Elections Division’s ruling.

IL-15: Another paired incumbent elections is scheduled in Illinois for the June 28 primary election. Reps. Rodney Davis (R-Taylorville) and Mary Miller (R-Oakland) are battling for the new gerrymandered 15th District, one of only three Land of Lincoln seats that will likely send a Republican to the House.

The Victory Geek firm, polling for the Illinoize political blog (6/15-19; 515 IL-15 respondents; interactive voice response system), finds Rep. Davis leading Rep. Miller, 38-35%. When forcing the undecideds to make a choice, the full universe breaks for Mr. Davis, 51-49%. The Miller campaign also released their internal Cygnal firm survey conducted during the same time period (6/18-19; 420 IL-15 likely Republican primary voters; peer-to-peer text) that gave the Congresswoman a 45-40% edge over Mr. Davis.

MN-1 Special: An Expedition Strategies survey of the MN-1 special election (6/6-9; 400 MN-1 likely special election voters; live interview) scheduled for August 9 finds the two party nominees, Republican former state Representative Brad Finstad and ex-Hormel corporation CEO Jeff Ettinger (D) falling into a virtual tie. The ballot test gives Mr. Finstad a 48-47% edge in a district that is no stranger to close elections. The winning percentage in the last three congressional elections was 48.6%, 50.1%, and 50.3% in 2020, 2018, and 2016. The seat is in special election because incumbent Rep. Jim Hagedorn (R) passed away in February.

NY-19 Special: A Triton Polling & Research survey conducted for the Freedom Council USA (6/16-20; 505 current NY-19 registered voters; interactive voice response system) finds Dutchess County Executive Marc Molinaro (R) leading Ulster County Executive Pat Ryan (D) by a large 52-38% clip in the special election race to replace resigned US Rep. Antonio Delgado (D). The Congressman left the House to accept his appointment as Lt. Governor.

A Molinaro victory would mean another special election GOP conversion of a Democratic seat as we saw in Texas on June 14 when Republican Mayra Flores defeated Democrat Dan Sanchez and two minor candidates to win the seat from which Rep. Filemon Vela (D-Brownsville) resigned.

OH-13: Two political pollsters, the Remington Research Group and the Democratic polling firm GQR released survey results of what should be a very tight general election campaign in the new Akron anchored CD-13. Here, state Rep. Emilia Sykes (D-Akron) is competing against Republican nominee and attorney Madison Gesiotto Gilbert. Both surveys were conducted in May but released well into June.

According to Remington (polling for US Term Limits; 5/19-20; 500 OH-13 likely general election voters), Ms. Gilbert opens with a 46-37% lead. GQR has a different take. Their survey (5/213-31; 700 OH-13 likely voters with a 200-person over-sample of African Americans; live interview) projects that the two candidates are virtually tied with Rep. Sykes holding a 47-45% edge. This race is categorized a toss-up in a seat that the 538 data organization rates R+2. Conversely, President Biden carried the new 13th by a 51-48% spread.

TX-28: The tight Democratic primary and runoff campaign featuring veteran Rep. Henry Cuellar (D-Laredo) and attorney and 2020 congressional candidate Jessica Cisneros has finally come to an official end. The Texas Secretary of State has reported the final results of the runoff recount. Counting the ballots again actually increased Mr. Cuellar’s lead by eight votes. The final counts shows a 22,901 to 22,612 margin in favor of Rep. Cuellar, a spread of 289 votes, or 50.3% of the runoff electorate.

Rep. Cuellar now advances into a general election against Sen. Ted Cruz’s (R-TX) former staff member Cassy Garcia. This could become a competitive general election in a district that the FiveThirtyEight data organization rates as D+7. Though Ms. Garcia will have the ability to run a credible campaign, Rep. Cuellar is now viewed as the favorite to win a 10th term.


Louisiana: Federal Judge Shelly Dick, since the legislature did not produce a new congressional map that adds a second black district to the delegation by her imposed June 20th deadline, says she will draw such a map before June 29. Currently, the Louisiana delegation stands at 5R-1D, with the one Democratic seat being majority black and stretching from New Orleans to Baton Rouge. The move will likely add a Democratic district to the delegation and cost the Republicans a seat. The GOP leadership has asked the US Supreme Court to stay Judge Dick’s ruling, but so far the high court has not taken any action.


Florida: A surprising poll released earlier in June (Global Strategy Group; 6/8-13; 600 FL likely Democratic primary voters; live interview) found state Agriculture Commissioner Nikki Fried pulling to within a 38-34% margin against US Representative and former Governor Charlie Crist (D-St. Petersburg). Now, a new St. Pete Polls survey (6/16-17; 1,007 FL likely Democratic primary voters; interactive voice response system) posts the latter man back to a more substantial spread, 49-24%. The Florida primary is scheduled for August 23. The Democratic winner will then challenge Gov. Ron DeSantis (R).

New Mexico: A pair of new surveys coming from two different polling organizations simultaneously arrived at virtually the same conclusion. That is, Gov. Michelle Lujan Grisham (D) and challenger Mark Ronchetti (R) are already in a toss-up campaign. Public Policy Polling, surveying for the New Mexico Political Report (6/13-14; 642 NM voters; live interview & text), finds Gov. Lujan Grisham topping Mr. Ronchetti, a former Albuquerque weatherman who was the 2020 Republican US Senate nominee, by only a 45-42% margin.

The closeness is confirmed and then some from an internal Public Opinion Strategies poll that the Ronchetti campaign released. According to this study (6/11-14; 600 NM likely general election voters; live interview), Mr. Ronchetti holds a tight one-point lead, 46-45%. The New Mexico gubernatorial race is quickly becoming a key nationally watched race.