Playbook PM: Mixed signals in the latest inflation data

INFLATION NATION — Before Silicon Valley Bank collapsed and gave Fed Chair JEROME POWELL a whole new headache, today’s consumer price index release was going to be perhaps the telltale indicator for the central bank’s next decision.

Now, its impact may have been dulled, but for medium-term policymaking — and Americans’ pocketbooks — the signals still matter quite a bit. And they were fairly mixed this morning:

• Overall, prices rose 0.4% last month, down from 0.5% in January.

• The core CPI increase was worse than economists had expected. Excluding food and fuel prices, core prices rose by 0.5% in February — up from the 0.4% growth in January. This is the measure the Fed monitors most closely.

• Year over year, costs climbed by 6% in February, a drop from January’s 6.4%.

• Housing accounted for the majority of last month’s price increase. “But most economists expect rental cost increases to slow in the coming months as more apartment buildings are constructed and new leases are signed at lower price levels,” which could help bring overall inflation down, AP’s Christopher Rugaber reports.

• Service costs also were a notable driver of rising prices, including airfares, hotels and restaurants. On the flip side, used car prices fell for the eighth month in a row, and supermarket prices — even eggs! — offered some relief.

Big picture: The report depicts an economy that is still running too hot for the Fed’s liking, with inflation way above the 2% target, yet improved substantially from last year’s 9.1% peak. Continually elevated prices pose a stubborn challenge for consumers and federal officials, who are trying to figure out how to tamp them down via interest rate hikes without trashing the U.S. economy.

Last week’s jobs report and today’s inflation data “ended up telling similar stories,” NYT’s Ben Casselman notes: “Both were a bit hotter than forecasters expected, but not as far out of line as some of the January data.”

SVB FALLOUT — Meanwhile, stock markets rebounded somewhat today for midsize regional banks, offering some optimism that the contagion won’t spread too far beyond the failure of SVB and two others. There’s “growing calm on Wall Street,” WaPo’s Aaron Gregg writes. But that didn’t stop Moody’s from dropping the overall U.S. banking system’s outlook from stable to negative, warning of a “rapid deterioration in the operating environment.”

Everybody getting in on it: Both the Justice Department and the SEC have now launched preliminary investigations into SVB, WSJ’s Dave Michaels scooped. Authorities are looking into the bank’s failure as well as stock sales by bank employees in the days prior.

The B word: The ghosts of 2008 hovered around the Biden administration’s decisions this weekend on SVB, helping to explain why President JOE BIDEN was so adamant to message the federal response as not a bailout, NYT’s Peter Baker writes.

The coming political fights: “Brace yourself for bank-on-bank warfare in Washington,” Zachary Warmbrodt previews.

Legal trouble: Shareholders filed a class-action lawsuit against SVB’s parent company and top leaders, AP’s Michelle Chapman reports.

Top-ed (and an interesting choice of venue): MIKE PENCE writes in the Daily Mail: “Biden IS forcing U.S. taxpayers to pay for a bailout… but the bad actors must bear the brunt of THEIR bad decisions”

Good Tuesday afternoon. Thanks for reading Playbook PM. Drop me a line at [email protected].

AMERICA AND THE WORLD

BFD — A major new deal for Saudi Arabia to buy 78 jets from Boeing could translate to 1 million jobs across 44 states, including 150,000 new roles in manufacturing, Biden administration officials say, per Bloomberg’s Jennifer Jacobs and Siddharth Vikram Philip. The order is valued at nearly $37 billion. “The Boeing deal comes after U.S. and Saudi officials worked to repair ties between the two countries, which hit a low last year over oil policy.”

POLICY CORNER

NOT A DROP TO DRINK — The EPA today laid out proposed rules for maximum limits of “forever chemicals” in public drinking water, the first federal standard ever for PFAS in that supply, WSJ’s Kris Maher reports. “The move is part of a broader push by the agency to tighten rules surrounding a group of chemicals that had gone largely unregulated for decades.” Regulators say it could save thousands of lives; industry groups say they have concerns.

DEPT. OF NIGHTMARE HEADLINES — “On eve of air safety summit, FAA administrator says there have been more near-collisions than expected in U.S. skies,” by NBC’s Rob Wile

2024 WATCH

SURVEY SAYS — A new national poll from CNN finds DONALD TRUMP slightly leading Florida Gov. RON DeSANTIS in a presidential primary, 40% to 36%, Jennifer Agiesta and Ariel Edwards-Levy report. Notably, GOP primary voters are not prioritizing electability: Survey respondents say they’d rather pick someone with whom they agree, 59% to 41%. Other interesting takeaways:

• Trump’s support is more solid than DeSantis’: Seventy-six percent of Trump’s backers say they’re locked in for him, compared to 59% of DeSantis’.
• On entitlements: A 59% majority of GOP primary voters think it’s essential for the nominee to vow to protect Social Security and Medicare from cuts.
• On diversity: Sixty-one percent of GOP-aligned voters think growing racial diversity is a positive thing for the U.S. “The 38% who consider those changes a threat now is about twice as high as four years ago, and similar to where the party stood in 2016.”
• On gender and sexuality: Seventy-eight percent of Republican primary voters say that societal shifts around gender and sexuality are broadly for the worse.

THE NEW GOP — “Who Needs the MSM?” by The Dispatch’s David Drucker: “[A] significant number of candidates could attempt to freeze out mainstream journalists. … [T]he trend could continue into the general, especially as many young GOP communications aides staffing campaigns who came of age in the past decade remain unaccustomed to working with mainstream journalists. … [E]ven Republican strategists who otherwise encourage engagement with mainstream press say they see diminishing returns for their clients’ appearances on CNN and MSNBC versus eight years ago.” But, but, but: Strategists tell Drucker that shying away from the press would be a mistake for anyone not named Trump or DeSantis.

MAKING MOVES — Virginia Gov. GLENN YOUNGKIN is meeting with GOP megadonors in Dallas next month at a reception hosted by ROBERT ROWLING, WaPo’s Isaac Stanley-Becker reports. That’s the latest nationally focused move that has observers chattering about a possible presidential bid from Youngkin.

PAGING STEVE DAINES — Controversial former Milwaukee County, Wis., Sheriff DAVE CLARKE, a prominent MAGA commentator, hasn’t ruled out a Senate bid next year, The Daily Beast’s Sam Brodey scoops.

PRIMARY COLORS — Rep. MATT GAETZ (R-Fla.) tells Jonathan Martin that he won’t primary Sen. RICK SCOTT (R-Fla.): “If I wanted to spend my time in a retirement community, I’d definitely choose The Villages over the Senate.”

THE TALENTED MR. SANTOS — Rep. GEORGE SANTOS (R-N.Y.) has filed a statement of candidacy for 2024, keeping the door open to running for reelection.

MORE POLITICS

ONE TO WATCH — Venture capitalist DAVID SACKS, a close associate of PETER THIEL and ELON MUSK who has been on the rise as a Republican donor, is hosting a fundraiser for Rep. RO KHANNA (D-Calif.) later this month, Puck’s Teddy Schleifer flags. Tickets go up to $13,200.

CONGRESS

DOOR CLOSED — “Ukrainian activists say Kevin McCarthy is ignoring their outreach,” by Semafor’s Morgan Chalfant: “A group of Ukrainian notables is in Washington to ask Biden administration officials and congressional staffers for more weaponry and support for their country — but there’s one meeting they say has eluded them. … [T]he group had extended an invitation to meet with House Speaker KEVIN McCARTHY or his staff but hadn’t received a reply.”

MURKOWSKI GETS IT DONE — Biden’s announcement that he would approve the massive ConocoPhillips oil project in Alaska is a big victory for Sen. LISA MURKOWSKI (R-Alaska), who’s been working the administration for years on the Willow project, POLITICO’s E&E News’ Emma Dumain details. From her careful political positioning as a moderate to cajoling behind the scenes, Murkowski concocted a “pressure and education campaign” that paid off in the end.

And Murkowski doesn’t sound like a particularly big fan of DEB HAALAND: “Were there people … within the Department of the Interior that were working to actively kill this? Absolutely, positively, and I don’t think you have to name names … This was not something that I think was ultimately going to reside with the secretary of the Interior.”

NIGHT OF THE HUNTER — “Comer says Treasury will allow Oversight Committee to review certain bank activity reports related to Biden family and business partners,” by CNN’s Sara Murray, Annie Grayer and Alayna Treene: House Oversight Chair JAMES COMER (R-Ky.) “has been seeking the bank records, known as Suspicious Activity Reports (SARs), as part of his probe into the Biden family business dealings. … Treasury has granted the committee an ‘in camera’ review of the documents, which means there will be certain restrictions on how Comer and his team can view and access the documents. A person familiar with the matter said that review could begin as early as this week.”

YOWZA — The Daily Beast’s Roger Sollenberger catalogs the many controversial, contrarian, trollish tweets of ANDREW KLOSTER, who’s been hired on staff as Gaetz’s new counsel. A sampling: “I’m 100% women respecter precisely because I’m a raging misogynist.” “Consent is probably modern society’s most pernicious fetish.” “I realize that I’m perhaps conceding too much by referring to ‘China’ as a civilization … I’m not speaking of the government / state itself. I mean the people we call chinese.” And much, much more from the Trump White House alum, who reportedly deleted many of the tweets after Daily Beast asked him for comment.

JUDICIARY SQUARE

ORIGINALISM PLAYING OUT — “In the Gun Law Fights of 2023, a Need for Experts on the Weapons of 1791,” by NYT’s Shawn Hubler: “[I]n the months since a landmark Supreme Court decision upended the standards for determining the constitutionality of gun laws, … [g]un historians across the country are in demand like never before as lawyers must now comb through statutes drafted in the Colonial era and the early years of the Republic to litigate modern firearms restrictions. From experts on military gun stamping to scholars of American homicide through the ages, they have been called — many for the first time — to parse the nation’s gun culture in court.”

PLAYBOOKERS

OUT AND ABOUT — SPOTTED at ServiceNow’s Federal Forum at the Marriott Marquis yesterday: Reps. Terri Sewell (D-Ala.) and Mark Green (R-Tenn.), Geoff Browning, Nichole Francis Reynolds, Fred Graefe, Raj Iyer, Donald Remy, Lauren Boas Hayes, Sean Brune, John Boerstler, John Carbone, Ann Dunkin, Clifton Douglas Jr., Andrea Goldstein, Kelly Fletcher and John Tien.

MEDIA MOVES — Bloomberg has added Kayla Sharpe as deputy team leader on the BGOV newsletters team and Kate Ackley as a reporter on the Congress team. Sharpe most recently was an associate editor at Axios. Ackley most recently was a senior staff writer for CQ Roll Call.

TRANSITION — Deborah Rowe is now a policy director at the Alpine Group. She previously was a senior adviser for Rep. Steny Hoyer (D-Md.).

WEEKEND WEDDING — Rachael Baitel, chief of staff at Russell Street Ventures and a Trump White House, USAID and DFC alum, and Alec Greenberg, who works for his family’s company Wearwell, got married Saturday at Kol Shearith Israel in Panama City, Panama, with a reception at the Santa Maria Hotel. They met through a mutual friend. Pic … Another pic

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