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Weekly Washington Policy Pulse: Crypto Bill Deal, Trump China Trip (May 11, 2026)
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this is your weekly Washington Policy Pulse on the Balance of Power podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence senior policy analyst and friend of the show, Nathan Dean, shares his weekly call on upcoming catalysts in the nation's capital. Listen for the most recent and relevant policy research from our team at Bloomberg Intelligence. Now with today's installment, here's Nathan Dean.
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Good afternoon everybody. Welcome to the Washington Policy Pulse. My name is Nathan Dean. I'm a senior policy analyst with Bloomberg Intelligence here in the D.C. bureau. We also want to say thank you for those of you who are listening to us via the Balance of Power podcast. We always appreciate you listening to us and getting a best idea of what's happening here in Washington. Today is May 11th. It is 10:02am we always timestamp things because things move fairly quick, quickly. So what I want to do today is if you are a fan of the show Jeopardy, they have this category called potpourri. It's where they use previously unused clues. They just put them together. We're going to do a potpourri of different topics today just because we got a lot of random stuff happening here in Washington. First, let's talk about most recently status on the reconciliation bill. Last week we saw legislation that came out and confirmed that the Republicans are looking to spend $72 billion for the Department of Homeland Security as part of this reconciliation bill. One million of it would be earmarked for the ballroom under the guise of security. What we're hearing from Republicans is that that most likely would get stripped out. There's not a lot. There's not unanimous support when it comes to the ballroom. But again, there's it's minimal impact on investing, so we don't really cover it. I'm just telling you what we're hearing. But we do think that this reconciliation bill is on track to be passed by June 1st. There is going to be a vote a rama at certain point in this process. So what happens here in a Votarama is that Democrats can offer as many as amendments as they the leaders speak all night and there are just random votes on whatever people want to have votes on because it's an election year, you're going to have a lot of just random votes and they go all night. Staffers hate it and, you know, then things aren't going to change all that much in the end. But again, we do think this bill is going to pass. Now, it does not include any of the exciting stuff for those of us in the markets like defense spending, farm aid, Venezuela aid, etc. That is all going to come in another reconciliation bill that the Republicans are maybe going to try for in the lame duck period. But again, we'll see what happens later than that. Let's talk about cryptocurrency now. Just last week we saw Senator Thom Tillis and Senator Angela also Brooks come together on an agreement on stablecoins. And a markup is scheduled for the Senate Banking Committee on Thursday. This is the Clarity Act. Now if you talk to the crypto sector, most of them are on board with this. Coinbase is on board with this. If you talk to the banking sector, most they are not on board with this. The banking trade associations actually submitted a letter with their revised language over the weekend. We'll see if it actually takes place. My guess is that it probably won't. Senator Tillis said over the weekend again that this is sort of the deal, take it or leave it. And so we will see on Thursday how it goes. Now, if there is a partisan vote, meaning if we see a vote that's 13 to 11, even if Senator also Brooks herself votes against this. What I'm looking for here is language from the mott, a Democratic side of the aisle, that suggests that momentum needs to keep going and that they can hash a lot of this out on the Senate floor. That's where the ethics provision of the Clarity act is going to be haggled, is not going to be at the committee level, but it's going to most likely be haggled at the portion on the floor. And so as a result, the momentum keeps going. Now there's a lot of optimism. Now, if you look at the prediction markets, things have flipped back from the 40 to the 60% where I've been now as terms of timing probably before. Well, I most likely say it would be this summer. I think on the quick side you could see it in June, on the late side, maybe July. But as a reminder, just there's nothing preventing this from being passed before the lame duck section. So again, I'm presuming just sometime this year, I think it's going to pass. But again, we'll be paying attention on Thursday. So please reach out if you have any questions on the housing bill. As a reminder, this is President Trump's housing bill. This is the 21st century for road Act. This is the bill where the Senate passed it and then they sent it to the House and they said, here, pass it. And the House just said, no way, we're not going to do it. There's a provision over build to rent platforms and build to rent communities. Now, this is a provision, we've talked about this on the call before, that would require build to rent communities to dispose of their income, not income, dispose of their properties within seven years. Senate passed this bywhelming, overwhelmingly bipartisan. The House. Now, they didn't like it. And privately it's been reported that President Trump doesn't like this either. So the House released draft, they haven't released it, but there is draft legislation going around town that suggests that provision has been stripped. So stay tuned. Now, I do think that if this bill passes, and I do think it will pass, I do think it will pass with that provision stripped out. Because even though the Senate doesn't want to get back to the, you know, the Senate in their eyes, look, we've already passed this. It's now up the House to do what they wish. The House can come back and say, look, President Trump privately agrees with us. You want him to sign the bill, you're going to have to take the House bill. Now, if that's the case, you got a conference committee or you just have to have another vote. But long story short is, stay tuned. Things to be seemingly going better in terms of those equities that are exposed to this provision in particular. We also have a Kevin Warsh vote for the chairman of the Federal Reserve. It's going to most likely take place Wednesday or Thursday or on both days. Just a little bit of logistics. There are going to be four votes. You need to vote, you got to vote to confirm him as a board governor to take the spot where Dr. Myron is currently sitting. And then you need to have a vote as chairman to take the spot where obviously Jerome Powell is sitting. And that would become effective on Monday. So there's going to be four votes, a cloture vote, a vote for him to be board governor, a cloture vote, a vote for him to be chairman. Now, these votes will be Wednesday or Thursday. When does he actually take the oath? Probably either late Friday or because Friday is Jerome Powell's last day, probably Monday morning. But again, we don't see any issues in this happening. I just wanted to give the logistics because it's going to be kind of weird that you're going to see four votes. That's the reason why Michelle Bowman, the vice chair of the Federal Reserve, gave a speech last week where she wanted to talk about private credit reporting. This isn't all that exciting of a news for us, you know, but I just wanted to put this out here, is that there is a lot more looks or questions or there's a little bit more listening about what's going on in the private credit market in terms of the regulatory response. So if in this scenario Michele Bowman gave a speech and she just said, look, you know, we're going to go to the banks and we're going to asked them to disclose a little bit more of private credit here. So don't be surprised if you see those changes coming out later this year. I'm not exactly sure if it's rulemaking or if they're just going to change already their examination profiles. But again, stay in tuned. Also on the subject of private credit, our BI credit team and our BI this led by Paul Goldberg, who's our senior industry analyst and for the Alternative Asset managers, just released a survey on the future of private credit that I highly recommend you read. Send me an I.B. i can send this to you. But long story short is is that while there are some areas of concern out there, investors are still somewhat pretty excited about private credit. And so the survey is certainly interesting reading. So again, I wanted to throw that out there. A couple other things. President Trump is going to China on Thursday and Friday. He's actually going to I think he's leaving Wednesday in the air in Washington. Here's what you need to know and this is what I've gotten from my my conversations with Bloomberg Geoeconomics team led by Jenny Welch. So they've actually put a couple pieces out on the terminal already forecasting what this meaning is about. But here are the top key things to keep in mind. AI Board of Trade, meaning this mechanism that they have discussions about to talk about investment in the United States, the Iran war, and for those of us a little bit more focused on equities and commodities, potential deals for Boeing, George Ferguson and his team are going to be actually producing a report on what that can mean like and also the potential for soybean purchases Now, I was just talking with Adam Farrer. He is the Bloomberg Geo Economist analyst who's leading this coverage. He's going to be around Thursday and Friday. So look for Thursday, late Thursday, early Friday maybe. And I'm just talking Washington D.C. time. So do the time for your own conversion where you are. But again, that's when you're going to start to see news break. So again, we'll but I don't think anybody's really thinking this is a grandiose meeting or anything like that. That's going to lead to massive changes. Real quickly, just a couple other things. Last Friday we saw a court case on tariffs. Now, this court case overturned the Section 122 tariffs which replaced the IPA tariffs that the Supreme Court struck down. So just as a reminder, the Supreme Court struck down IPA tariffs. President Trump used Section 122 tariffs at 10%. He had the authority to go up to 15, but he's gone to only 10%. And this, the International Trade Court struck those tariffs down. Now, the reason why it didn't make as much news is that this was a very limited case specifically towards two individuals and also Washington State. It doesn't apply to other types of tariffs are out there. And at the end of the day, and this is what Holly Frum has been putting on the terminal, at the end of the day, this is mostly a stopgap measure for Section 301 tariffs. If you saw President Trump's true social statement just this morning on the Supreme Court justices, he even said in there that Section 301 tariffs are coming. And so even though that it says here is that the court struck down another tariff or anything like that, what you need to know is section 301 tariffs are coming and they're gonna be coming in the next few weeks. I know we talked about this last week, but I just wanted to keep reiterating this point here and also on tariffs, just keep in mind is that the refunds have begun to come out. Holly actually just put out in her Note today that 20% of the IPA tariffs have been accounted for or accepted. There's a lot rejections going on here. So even though you have 150, $160 billion that need to be refunded, there's been millions of submissions that the Trump administration has come back and said, no, we reject this. And in fact, you're starting to see companies come out and say, well, maybe instead of actually getting our dollars back, can we get a credit towards future tariffs? So again, if you're banking on refunds, or if you want to talk about refunds any more than that, just give us a call, we'll talk about that. Last two things I want to talk about is one is we've gotten a question from clients on redistricting. What does it mean that you see redistricting, especially in the Supreme Court, coming back and saying under the Voting Rights act now Southern states in particular can redistrict. And you're starting to see a lot of red states moving very quickly to eliminate Democratic positions based off of the Supreme Court decision. Are you going to see the Republicans take the House as a result of this? Now, according to the prediction markets, the answer is still no. Right now, the democrats are around 78%. They were at 85% before. So you did see a Delta change in response to that Supreme Court case. But I apologize once again. Let me, let me. Sorry about that. Nobody wanted to hear that. So the friends over at the Cook Political Report, these are the folks that I use, they have changed their numbers in response to redistricting here. And they have. Currently, when you take all the redistricting into account, there are 18 toss up states, toss up seats in the House of Representatives, 14 of those are Republican. And if you presume the trading or the voting wins, go back towards the Democrats and you take into account President Trump's approval numbers, the Democrats still have a very decent shot of taking the House. And one of the reasons why there's a little bit of hesitation here, and especially what we saw here in Virginia, is even though I'm in D.C. i live in Virginia. That's why I say here in Virginia is that a lot of these districts, and I know I've said this before, you're taking districts that are Trump plus 10 districts or Kamala Harris plus 10 districts, and you're diluting them down to the point where if you get a swing election, things may change and the Democrats may actually ultimately net start netting Republican seats. I heard one strategist say in South Carolina in particular that if you were to eliminate Representative Clyburn's position in South Carolina, you know, even with that, with the way the winds are blowing at the moment, the Democrats could ultimately net three seats in South Carolina even with the redistricting. And that was the Democratic strategist. So again, please keep that in mind. But that's where the general feeling on redistricting is. It's a wash. So the last thing I want to say is, is that for those of you who are in London next week, Elliot Stein and I are going to be making a trip around Europe. We are going to be available for meetings in the capital of the United Kingdom. So if you want to just get a pint or a cup of coffee, I love my skinny lattes. Please Reach out. We would be more than happy to talk with you, but if not I wish you have a great week. We are not going to have the Washington Policy Post next week as a result of our trip, but again please you know reach out if you have any questions. We always appreciate chatting with you and thank you for sticking with us. Take care.
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Our thanks to Nathan Dean, Bloomberg Intelligence Senior Policy Analyst, bringing you the latest installment of his weekly winner, Washington Policy Pulse. For more from BI or to join this call live each week you can email Nathan@ndeanaloomburg.net that's NDE a n bloomberg.net come back to the podcast later today for the latest edition of Balance of Power.
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