THE TICKER

The White House economic team could soon be getting a fresh injection of supply-side swagger directly from the CNBC set, after all: Larry Kudlow, for now, has emerged as a leading contender to serve as President Trump’s next top economic adviser.

The Reagan administration veteran and cable-news regular has spoken twice with Trump in recent days about replacing outgoing National Economic Council director Gary Cohn, The Washington Post’s Bob Costa, Damian Paletta and Josh Dawsey report

The process remains fluid, and Trump alone will make the final call. A handful of internal names have also circulated since Cohn announced his resignation last Tuesday — Chris Liddell, a former chief financial officer for Microsoft and GM working for the administration’s Office of American Innovation; Peter Navarro, the ascendant trade hawk who masterminded the steel and aluminum tariffs; and Shahira Knight, a Cohn deputy and his reported preference. 

None of those candidates shares Kudlow’s outsize media profile, a known priority for Trump in evaluating potential hires. And while Kudlow, an avid free-trade advocate, was sharply critical of Trump’s initial tariff proposal, he walked it back last Thursday after the administration granted exemptions to Canada and Mexico and indicated others could petition for their own carve-outs. “I won,” Kudlow said on CNBC at the time. “They’re taking it off Canada and Mexico. That was the worst part for me. So this is good. This is an excellent decision by the president.”

The former Wall Street economist is said to be interested in the post, and he’s progressing through interviews with key Trump officials. From the Post story: “Beyond the phone calls with the president, Kudlow has also spoken with Treasury Secretary Steven Mnuchin and Jared Kushner, Trump’s senior adviser and son-in-law, the people said, citing those talks as further evidence of how the selection process is moving quickly.” On Monday, Kudlow’s CNBC colleague Jim Cramer called him the leading contender for the job. 

Kudlow — along with Stephen Moore and Arthur Laffer — has served as an important outside economic adviser to Trump. He encouraged the president to insist on the lowest possible corporate tax rate during last year’s defining policy debate, then championed passage of the package as a historic win.

But Kudlow engaged Trump even earlier, aiming to shape Trump’s platform as he launched his campaign in the summer of 2015 (his point of contact then: Roger Stone, a decades-old acquaintance. See this Post scoop this morning for more about Stone). The following February, when National  Review published an issue dedicated to conservative disavowals of Trump, Kudlow, a contributing editor, was conspicuously absent. “I'm not with them on this one,” he told a reporter in his native Connecticut. 

Kudlow criticized Trump after the “Access Hollywood” tape emerged weeks before the election — he wrote that Trump’s comments on the tape were “vile, vulgar, and inexcusable for a grown man” and said he was reconsidering his support — a sore spot with Trump. From the Wall Street Journal’s Michael C. Bender and Nick Timiraos: “During a postelection meeting at Trump Tower, Mr. Trump reminded Mr. Kudlow about the comments. ‘We nearly lost you there,’ Mr. Trump said, according to two people familiar with the exchange.”

One key question Bob and co. raise about the job Kudlow will be filling: Does Trump want his top economic adviser advancing an ambitious agenda or out defending the record he's already assembled? Kudlow has already proven a committed cheerleader for the tax cuts, arguing they could push annual economic growth to 4 percent, well beyond what mainstream forecasters predict.

MARKET MOVERS

What's up with wages? NYT's Ben Casselman: "When the Labor Department reported last month that average hourly earnings had jumped 2.9 percent in January, it looked as though the long, steady recovery in the American job market might at last be translating into faster wage gains for the nation’s workers. Then came Friday and the latest jobs report, which showed that wage growth was weaker in January than initially reported and that the gains in February were weaker still, up just 2.6 percent from a year earlier.

The muddled data on wages was a potent reminder that even the strongest job market in a generation has not been robust enough to reverse a longstanding pattern of lagging pay. But the mixed messages also highlight the challenge of trying to figure out where wages are headed: Not only are the sources of the data volatile, but economists say they may also be declining in quality."

Deficit soars. Bloomberg's Sarah McGregor: "The U.S. recorded a $215 billion budget deficit in February -- its biggest in six years -- as revenue declined. Fiscal income dropped to $156 billion, down 9 percent from a year earlier, while spending rose 2 percent to $371 billion, the Treasury Department said on Monday. The deficit for the fiscal year that began in October widened to $391 billion, compared with a $351 billion shortfall the same period a year earlier, according to the Treasury report. The data underscore concerns by some economists that Republican tax cuts enacted this year could increase the U.S. government debt load, which has surpassed $20 trillion."

Buybacks double after tax cuts. CNBC's Jeff Cox: "Companies have been feverishly putting the savings they reaped from the tax breaks passed in December into their investors' pockets this year. Share buybacks in 2018 have averaged $4.8 billion a day, double the pace for the same period last year, according to market data firm TrimTabs... The buyback announcements also have happened amid a volatile backdrop for the stock market, which briefly endured a correction in February — defined as a 10 percent drop — but have rebounded to near record highs in March. The share repurchases have helped keep the market afloat, as investors have pulled $23.5 billion out of funds that focus on U.S. stocks this year, according to Bank of America Merrill Lynch."

Here it is in chart form, via WSJ's Nick Timiraos:

The S&P 500 and the Dow Jones Industrial Average slumped on Monday as the U.S. tariffs signed into law last week by President Donald Trump weighed on industrials, though gains in tech stocks boosted the Nasdaq.
Reuters
Chances are the CPI will be a sleeper for markets Tuesday, but if not, watch for interest rates to spike and stocks to sell off.
CNBC
Advocates for more diversity atop the U.S. central bank took to Wall Street on Monday to press their message on the doorstep of the Federal Reserve Bank of New York, which is in the process of picking a new chief.
Bloomberg
MONEY ON THE HILL

Senate starts bank bill endgame. Washington Examiner's Joseph Lawler: "The path is nearly clear for bipartisan legislation easing rules on banks to clear the Senate this week.The upper chamber voted Monday to end debate on an amendment by the bill’s author, Senate Banking Committee Chairman Mike Crapo, R-Idaho, that would update and replace the version of the legislative package that advanced through his committee in December, including some small provisions that could help shore up Democratic support. The vote was 66 to 30, with 17 Democrats joining with all Republicans in favor."

Corker moves to strip big bank help. The Post's Jeff Stein: "Sen. Bob Corker (R-Tenn.) has proposed stripping the [banking bill] moving toward passage of a provision critics fear would allow some of Wall Street’s biggest firms to take on more financial risk. Corker, who sits on the Senate’s Banking Committee, filed an amendment Monday to strike a section of the bill that could weaken one of the capital requirements imposed on banks in the wake of the 2008 financial crisis as a safeguard against another crash...

Liberal Democrats and some experts have said the banking bill, as currently drafted, opens the door for JPMorgan and Citigroup — two firms with more than $1 trillion in assets each — to lower their safeguards against a financial crisis. The bill's drafters have said JPMorgan and Citigroup will not benefit from the change, while recognizing that the decision will ultimately be left up to banking regulators."

Equifax rewarded. Politico's Zachary Warmbrodt: "Equifax’s role in the biggest consumer data breach in U.S. history isn’t stopping Congress from giving the giant credit reporting company sweeping protection from lawsuits while allowing it to expand its offerings into the mortgage business. Those favors for Equifax and its peers in the credit reporting industry are among the surprise provisions in [the banking bill]. The changes, made public only last Wednesday, are providing new ammunition to critics of the banking legislation, which would scale back regulations imposed after the 2008 financial crisis. Congress has yet to pass any laws creating stiffer penalties for companies like Equifax, whose security practices allowed hackers to steal highly sensitive data on as many as 148 million U.S. customers last year."

TRUMP TRACKER

TARIFF FLY-AROUND:

— GOP senators: Legislation to overturn may be unnecessary. CNN's Ted Barrett: "Pro-free trade Republican Sen. Jeff Flake of Arizona formally introduced legislation Monday to nullify the tariffs on aluminum and steel that President Donald Trump announced last week. But several senior GOP senators, who also are opposed to the tariffs, said a legislative response may not be necessary now that Trump has indicated he's open to exemptions for several key countries. 'I think we're making progress without legislation,' said Sen. John Cornyn of Texas, the second-ranking Senate Republican."

WTO chief worries about retaliation. World Trade Organization Director-General Roberto Azevêdo, via Reuters: "You know when it starts but not how it will turn out... This process of tit-for-tat can induce at times trade wars that are in no one’s interests."

Trudeau relieved. CNN's Eli Watkins: "Canadian Prime Minister Justin Trudeau on Monday said he expects Canadians in the center of the steel industry can 'breathe a sigh of relief' as trade talks continue between NAFTA members."

No big effect, says Boston Fed president. The Post's Heather Long: "One of the United States' top economists — Boston Federal Reserve President Eric Rosengren — says President Trump's steel and aluminum tariffs are 'not going to have a big impact' on the economy. He doesn't think the tariffs will trigger a global trade war. Rosengren predicts a rosy 2018 for the U.S. economy, with more jobs, more spending and more business investment."

Economists unanimous: It's bad policy. An ideologically diverse group of economists surveyed by the University of Chicago's Booth School of Business unanimously disagreed that the tariffs will "improve Americans' welfare." 

Wall Street analysts worry about automakers. CNN Money's Paul R. La Monica: "JPMorgan analyst Ryan Brinkman lowered his earnings targets on Ford and GM Monday. This comes just one week after Goldman Sachs analysts estimated that profits for the two automakers could take a $1 billion hit this year due to the tariffs."

Wonkblog
While blue-collar jobs have been disappearing for years, 2015 was an especially tough year for steel and aluminum.
Heather Long
Business
Shifts in the domestic steel industry have forced some U.S. companies to shop overseas — and they could be hit hard by new tariffs.
David J. Lynch

Trump blocks Broadcom. The Post's Hamza Shaban: "Trump Monday ordered Singapore-based Broadcom to abandon its $117 billion hostile bid for Qualcomm, blocking what would have been one of the biggest technology deals in history. In his presidential order, Trump cited 'credible evidence' that the takeover 'threatens to impair the national security of the United States.' The merger would have put one of America’s largest mobile chipmakers in the hands of a company based in Asia, a region that has been racing against American companies to develop the next generation of mobile technology.

The administration moved with unusual speed in the matter that caught many involved in the negotiations off guard. The Committee on Foreign Investment in the United States, or CFIUS, an interagency panel led by the Treasury Department, had several more weeks to render a recommendation to the president. Trump's order cannot be appealed, legal experts said."

Politics
The longtime Trump adviser denied any such contact and said he made one allusion to meeting Assange in jest.
Tom Hamburger, Josh Dawsey, Carol D. Leonnig and Shane Harris
PowerPost
A draft report from the GOP is expected to face backlash from Democrats, who believe there is evidence the Trump team coordinated with the Kremlin.
Karoun Demirjian
The Office of American Innovation is losing key staff and hasn’t reported flashy accomplishments. Instead, it’s been focused on nitty-gritty, long-term policy projects. Will it be able to survive the chaos of the Trump administration?
BuzzFeed
POCKET CHANGE

Solomon in line at Goldman. WSJ's Liz Hoffman: "David Solomon became the heir apparent at Goldman Sachs Group Inc. Monday after his main rival for the top job abruptly resigned, moves that show the Wall Street powerhouse is continuing to move beyond its trading roots. he surprise announcement came after Goldman’s board of directors last month anointed Mr. Solomon as the eventual successor to current Chief Executive Lloyd Blankfein, over co-President Harvey Schwartz, according to people familiar with the matter... In choosing Mr. Solomon, Goldman is going with a business builder who is respected, if not universally loved, inside the firm. The move amounts to a bet that the coming decade will look little like the last one, as Goldman continues to evolve from a secretive trading powerhouse into a more entrepreneurial place."

More on Solomon, aka D.J. D-Sol, from NYT's Kate Kelly: "The anticipated elevation of Mr. Solomon, a Goldman veteran who moonlights under the name D.J. D-Sol, spinning electronic-dance music, marks a strategic shift for the bank. Mr. Solomon, a native of Westchester County, N.Y., was a rare outsider to join Goldman as a partner when he was hired from Bear Stearns in 1999. He is a schmoozer who recognizes the importance of projecting a positive, inclusive image of the bank to its clients, its employees and the public. Unlike Mr. Blankfein and Mr. Schwartz, Mr. Solomon is not steeped in the firm’s cutthroat trading culture."

Wall Street approves. Bloomberg: "By naming Solomon sole president, the firm cleared the way for him to take the helm, a scenario that analysts say allayed the concern some investors had about there possibly being co-CEOs when Blankfein retires. They also cited Solomon’s diverse background and investment-banking expertise as benefits, and said Goldman’s transparency in laying out the succession plan will help insiders at the firm focus on doing business instead of wondering who’s going to take over as CEO."

General Electric Co last year eliminated bonuses for its senior managers for the first time in its 126-year history, saving millions of dollars after losing money in 2017, the industrial conglomerate said on Monday.
Reuters
CHART TOPPER

How healthy is Trump’s economy? via The Post’s Darla Cameron and Ana Swanson:

DAYBOOK

Today

  • The House Rules Committee holds a hearing on financial regulatory bills
  • The CFTC holds an international regulators meeting.

Coming Up

  • The House Foreign Affairs Committee holds a hearing on modernizing export controls on Wednesday.
  • The House Oversight and Government Reform Committee holds a hearing on the federal regulatory process on Wednesday.
  • The House Budget Committee holds a hearing on CBO oversight on Wednesday.
  • The House Financial Subcommittee on Capital Markets, Securities and Investment holds a hearing on cryptocurrencies and ICO markets on Wednesday.
  • The House Ways and Means Subcommittee on Tax Policy holds a hearing on recently expired tax provisions on Wednesday.
  • The House Financial Services Subcommittee on Terrorism and Illicit Finance holds a hearing on “The Monetization and Illicit Use of Stolen Data” on Thursday.
  • The House Financial Services Subcommittee on Monetary Policy and Trade holds a hearing on “Evaluation CFIUS” on Thursday.
  • Transportation Secretary Elaine Chao testifies before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies on Thursday.
  • Politico Playbook co-authors will interview Bill Gates live on Thursday.
  • The SEC holds an open meeting on Thursday.
  • The Brookings Institution holds an event about creating more efficient infrastructure on Friday.
  • The Heritage Foundation holds an event on the national security implications of a NAFTA withdrawal on Friday.
THE FUNNIES

From the New Yorker:

 

A cartoon by @larskenseth. #TNYcartoons

A post shared by The New Yorker Cartoons (@newyorkercartoons) on

BULL SESSION

Republican Rick Saccone and Democrat Conor Lamb campaigned on the last day before the special election in Pennsylvania's 18th Congressional district:

Betsy DeVos’s stumbling "60 Minutes" interview, annotated:

Stephen Colbert says Education Secretary Betsy DeVos flunked her first "60 Minutes" test: