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Weekly Washington Policy Pulse: Final Leverage Ratio Rule, Crypto Bill Odds (Nov. 17, 2025)
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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 Bloomberg Intelligence. Now with today's installment, here's Nathan Dean.
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Good morning and good afternoon, everybody. Welcome to the Washington Policy Pulse. My name is Nathan Dean. I'm a senior policy analyst here in the D.C. office. For those of you who are watching us so you can see that we have a new location, we're coming to a podcast booth because as a reminder, we put this out on the Balance of Power podcast and we wanted to get the audio a little bit better. I think the audio folks were like, nathan, your audio on the desk sounds great, but maybe the audio from a podcast booth sounds better. So again, welcome to to those of you who are listening to the Balance of Power podcast now. We're recording this on November 17th at 10:02am the timestamp is important because we've got a lot of stuff happening this week. Now we did not have a call last week. I was actually out in one of the mountain resorts and I stopped at this American store called Buc EE's. Now if you don't know what Buc EE's is and you're ever traveling in the States or if you know, obviously if you're traveling on a highway and you see the BUC EE's, you gotta stop. I mean it's, it's a really cool store, but they had a shirt in Buc EE's saying I celebrate hollow thank mess, meaning Halloween, Thanksgiving, Christmas, and had a picture of a pumpkin, a turkey and a Santa. And I like the term hallow Thankmas because that was a good way to describe and I used this in my newsletter for Bloomberg News last week. It's a good way to describe the season between Halloween and Christmas and Halloween in the end of the year, because that really does change how Washington thinks. And so what I want to do today is I want to run through all of the key events that I think are going to come up during Hallow. Thank, Ms. Because as of right now, we only have 15 legislative dates starting tomorrow between now and the end of the year. And so it's going to be very much a storming out of the gate, get a lot of things done because as the Washingtonians who are listening to us know, first week of December has every single holiday party you can think of. Because by the second week of Christmas or sorry, the second week of December, second sorry, I just had a question come in. We'll get to that. By the second week of December, most of the politicians and most of the policymakers are like, you know what, get me out of town. I don't want to be here. So let's talk about what's going to happen. So the first thing to note is the House is going to vote on the Jeffrey Epstein files as soon as tomorrow. This we actually saw a discharge petition. Now, what a discharge petition is is it allows the minority to essentially overrule the speaker of the House. Can happen in either chamber, essentially overrule the majority by saying that we have enough votes. As a result, we are going to force a vote on this case to release the Epstein files. Now, we don't really talk about the Epstein files all that much because they really don't have a investable impact. But just note that, you know, that is going to drive a lot of the headlines this week. So again, you know, this vote's going to take place. It'll most likely pass the House. President Trump actually just returned his or had a little bit of a U turn in terms of his support. Now he's saying that Republicans should vote for this. So you're going to see headlines dominate this early part of the week. Other things to keep in mind, though these are the more investable angles is that we're anticipating a 12 to 13 billion dollars package for US farmers. Now, the way that this work is that very similar to 2018 and 2019 during the first Trump administration, farmers essentially had another aid package, approximately around $23 billion. Now, this would be a first allocation of aid. It would already be allocated by the usda. I mean, it's you don't need require you don't require Congress for this. But the general thought is coming from the farming industry. And I spoke to our analysts in the region, meaning that the folks who are already working out in the heartland right now. And their mantra was trade, not aid, because as you can imagine that, you know, U.S. china imports over soybeans and so forth. They've essentially gotten into a position where US Farmers are struggling due to high crop high high crop production costs and low crop prices. But as a result, you know, we're thinking about 12 to 13 billion dollars could be announced as soon as earlier this week in terms of giving aid to farmers. Now, you know, Alexis Maxwell, who's our analyst who covers fertilizer, has already put some notes on, on to the terminal about this. But her rule of thumb is, is that, you know, essentially this would be a nice short term hit, short term relief, if you will, that mostly goes to fourth quarter and first quarter crops, crop price, crop seed price, seed purchases, not terms of equipment or anything like that. And it's really just short term aid in nature. It's not going to address the long term questions. So again, keep your eyes out on that. So let's talk about cryptocurrency now that the US Government is shutdown is over. And I'll get to those questions. And so thank you very much now that the shutdown is over now for Jan. Until Jan. 31. And let's actually let me just talk about the shutdown right now. So the shutdown deal last week essentially funded three out of the 12 appropriation bills. And these are the bills for defense, I'm sorry, usda, for Congressional Apparatus and for Veteran Affairs. So those are the only three out of the 12 that are funded for the entire fiscal year that gets us through September 30th. Now that means that there are nine out of 12 appropriation bills outstanding, and those have only been approved up until January 31st. So things like defense and things like, you know, just treasury and state and all these other parts of the US Government. Now the question that just came in is what odds would you put on a shutdown in February 2026? And right now I'd say 30 to 40%. I don't think a shutdown is going to happen in January 2026. With one major caveat. Now shutdowns in election years are not good politics. Nobody likes having a shutdown in an election year because as you remember, and I've said this before on the call, that by around March of April 2026, policymakers across the aisles are going to get really uncomfortable being here in Washington because every day you spend here in Washington is another day that your opponent and this is all 435 members of the House of Representatives and one third of the Senate, their opponent is back in their home district campaigning against them. So Washingtonian policymakers don't like being here in Washington, and as a result, very few things get done in the six months leading up until the election. Now, going back to the question of what odds would you put on a shutdown? 30 to 40%. The major caveat, though is, is if the White House pursues another rescissions bill, if, remember, resistance bills allow without a filibuster, so a majority vote in the House and a majority vote in the Senate to claw back deals and claw back money and rescind money that has already been appropriated. And this is the problem with the rescissions packages, because it takes 60 votes to get an appropriations bill, 50 votes to rescind that money. And that equation just does not work. And so from the Democratic perspective, look, if we had a deal to keep the government open and you essentially just said, no, we're just going to avoid that, you know, that equation just does not work, we could see another shutdown. So it really depends on what language we're going to see from the White House. And I don't think it's going to be anytime soon. I think it's going to be more like January where we're going to get into this. But if the Senate and the House can actually make some decent work on these appropriation bills, then I think it's going to be more likely than not these things go forward. Senator Thune is actually going to try and package together, potentially as soon as next week, a vote on some of the language on this. So again, you know, we'll see what happens. But right now I'd say it's about 30 to 40%. So going back to crypto, one of the things that's interesting is on the cryptocurrency space is that, you know, both the Senate and Ag Committees have come out of the gate storming post shutdown. Now, if you remember, the House passed its Clarity act earlier this year. The Senate Banking Committee had their, what's known as a discussion draft that focused on the banking side of crypto. So the sec, so they don't have authority over commodities, that is the Ag side. Now, the Senate Ag Committee released their discussion, discussion, draft late last week. I'm sorry, late the week before. I'm actually going to have my thoughts out in that, out this week. So if you're in the crypto space, text me, ping me around Thursday, Friday. That's when my piece is going to be out on the terminal. But the status of where we're at right now is the Senate Banking Committee has their draft, the Senate AG Committee has their draft, and they want all this done by the end of the year. And my message to clients is, is that I don't think it's going to happen because like I said, there's only 15 legislative days between now and the end of the year. And by the second week of December, Senate politicians do not want to be here. They want to go home. So, and there's nothing saying you have to have it done early this year. More likely not. This gets kicked the can to the first half of next year where I do think that this bill is going to pass. I'm at a 70% chance. And I feel, you know, that's pretty high for me. So I'm thinking that, you know, we have a decent chance of bill passage, probably a little bit more nuances. But Senator Booker from New Jersey, a Democrat, has already signed on to this discussion draft. So there are already Democrats on board with this idea of passing a crypto bill. And just let's come out and say it. The amount of crypto lobbying dollars that's being thrown at Washington at the moment is almost unheard of. And as a result, it's going to be very difficult for politicians to say, I don't want any part of this. So again, we'll see. And I'll have a little bit more update later this week. And just for those of you who are TRA tracking stablecoins as remember the crypto industry right now there is a under the Genius act, stablecoin issuers cannot issue, yield and cannot pay for deposits on stablecoins. But there's nothing out there that doesn't prevent crypto platforms like Coinbase from offering rewards. And so the banking industry wants that loophole closed as part of this bill. Crypto industry is obviously fighting it. So you have the crypto versus banking industry. And as a result, I think what happens is the status quo wins. And I think, you know, the cryptocurrency was able to continue to pay those rewards through their crypto platform partners. So that's where we are in cryptocurrency. Let's talk about National Defense Authorization Act. So as part of that Appropriations act, for those of you who are in the defense space, you're probably going to have a very busy next week or so because Senator Thune has said that they are very close to having a general agreement on the National Defense Authorization Act. If you Remember, the House passed its version earlier this year. Senate passed their version just a couple of weeks ago. And this is where right now they're talking about top light and spending dollars, because the White House is asking for $893 billion in defense spending for next year, for this year. And the Senate plan is coming out with 925 billion. Now, that's $32 billion in difference. But remember, the White House already allocated $150 billion from the one big beautiful bill. So the White House is actually saying 893 plus 150. We're actually coming in a little bit higher than the Senate plan. Where I'm going with this is that the National Defense Authorization act is important for us for two reasons. One, it's usually bipartisan. And so you generally see this move a little bit quicker than others. I anticipate that that's going to continue to happen now that the shutdown is over and to. The National Defense Authorization act is one of those bills that people love to attach bills to to try and get it to the President's desk. It's what is known as a Christmas tree bill. We've talked about this in the past before, where you hang an ornament on a Christmas tree. What happens is, is that they like to hang legislation on the National Defense Authorization act as a way to try and get it to the President's desk. So things like the Credit Card Competition act, this, that's been tried. It actually was tried earlier this year. Senator Thuden said, no, you can't do it. But if you're looking at Senator Marshall and Senator Durbin, I have to imagine they may try again. So, again, keep that on with the ndaa. Look for this Christmas tree bill opportunity. I'm going to be watching for it. And obviously, if you know, if you want to know, just ping me and I'll let you know. Let's talk about marijuana for a second. I just put out a note this morning on marijuana because as part of the shutdown deal, there was actually a marijuana provision that actually was somewhat interesting. So the Senate voted. I want to say it was like 76 to 24. I can't remember off the top of my head, but it was 76. I think it's 76, 24, to essentially ban what is known as the hemp loophole. So back in the 2018 farm bill, there was. They call it a loophole. I don't want to call it a loophole, but it's generally known as the farm bill loophole. That allowed hemp derived products to be sold. So these are things like, you know, over the counter, you know, essentially very important to states like Kentucky and other, you know, hemp, hemp states. And Senator McConnell led an effort to essentially ban this and it succeeded. So this ban's going into effect in a year and there's going to be a lot of hemp deprived products. And some people estimate as much as $28 billion per year industry that is going to be harmed by this by saying, you can't sell this. The reason why it's important for us is that I think it's very indicative of the marijuana argument or the marijuana debate over things like rescheduling and even legalization. Because if you have 76 senators that is not just like above 60, barely, that's 76 senators that voted to ban these products. That 76 senators most likely are not on board with this idea of loosened up marijuana regulation. And so the note that I put out on the terminal this morning essentially said, look for two things, one for full legalization and things like the Safer Banking Act. It's not going to happen in this congressional term. I don't think it's going to happen in the second congressional term, meaning through 2028. But when it comes to rescheduling, I think it's a political decision for President Trump. So I'm just saying is that the last thing that happened is President Trump put out a video a couple of weeks essentially saying that there could be some, you know, benefits to this idea of marijuana. But I also don't think it's going to lead to reschedulization anytime soon. I think if there is an announcement that comes from the White House, it's going to be a political decision to say we want this announcement to help us politically, maybe in advance of the midterms. But again, the reschedulization argument is going to take a long time to play out. There's over 15,000 comment letters. The FDA and the DEA have to essentially look at here and the DEA administrator by a gentleman by the name of Terrence Cole. He spent 30 years combating marijuana. And unless the President comes out here and says, you must do this, I don't think Terrence Cole is going to come back and say, I want to do rescheduling anytime soon. So talking a little bit about bank regulation this week, interesting two things that I wanted to talk about. One is I put an article last week, an analysis talking about regional bank relief, because if you've been a member of this call, you know that we've talked a lot about investment banking rules, bank capital rules and so forth, but a lot of the questions we get is, where are the regional banks? Where's PNC Capital One? Truest, you know, you know, where are these banks in terms of regulatory relief? And what my note essentially said is investment bank, big bank relief first, regional banks second. And this came to this idea of thresholds. So if you are a regional bank in the United States and let's just say that you're around 700 billion in assets or 600 billion in assets, you are what's considered category two. There's category one, category three. Two. Category three, and I apologize. Actually, it's category three is the one I was referring to for PNC and so forth. Category four. These thresholds are not set by law. They are set by regulation, with one exception. That is $250 billion. That is what DMZ to be domestically systemically important. And so the banking industry for many years has said, look, because these thresholds aren't set by law outside of that $250 billion threshold, maybe you should index it to something like inflation or this is what the banking industry is calling for nominal GDP. So rather than saying if you're at $700 billion, if you have to index it to nominal GDP, you're more looking at something like $900 billion. And this is important because if you move these thresholds up, it allows a bank like PNC or Capital One to be able to say, huh, maybe we actually can grow our base by another 150 to 200 billion in assets, and we won't actually hit this threshold for enhanced regulation. So, again, keep that in mind. I do think that this is coming and this, this note, and I can send it to you if you'd like. It's very thematic at this point. There's no indication that they've said that they're going to do this, other than just general. Yeah, we think it's a great idea. I think once all the big bank capital rules are done, so maybe by the tail end of next year, that's when these proposals come out. So the last thing I want to talk about in terms of bank regulation is if you missed it, Katanga Johnson, and this is why I was actually on a mountain, put out a report essentially saying that the leverage ratio proposal has moved its way from the Federal Reserve to the Office of Management and Budget, the omb. This is the enhanced supplementary leverage ratio, also known as the eslr. So one of the things that the Trump administration did is they changed the process of how you finalize a rule. And this is not just a financial regulator. This is everybody within the White House and the administrative agencies and is before the Federal Reserve had said, okay, let's, let's talk to the fdic, let's talk to the occ, let's finalize the rule and let's put it out there. Now every proposal has to go to OMB for the White House review. Now I think this just slows things down a little bit. It's not that big of a deal. I mean, don't get me wrong, I don't think the OMB is going to really come back and say to the Fed, we don't like this with certain exceptions. But because the fdi, the Fed has submitted it, or reportedly according to Katanga, to the ombuds, we're looking at finalization most likely in December. The banking industry has said that they want the eslr done by January 1st. I was a skeptic. You know, if you talk to me about this before, I've always said, yeah, I mean, look, there's a couple of people working on this. They may struggle, they may, it may have to be January, February. But look, if it's already at omb, it means that they have a rule that they've essentially sent said bless this so we can put it out. So assuming that the FDIC and the OCC don't have any issues with this, I think you're going to see a leverage ratio rule before the end of the year. A couple of other things to keep in mind real quickly Tomorrow, the Crown Prince of Saudi Arabia is meeting with President Trump over at the White House. You know, there's a lot of geopolitical news that's going to come from this. Obviously. Keep in mind, the one thing I'm going to be looking for is let's talk about Saudi investments in the United States. Let's talk about purchases of F35s, let's talk about AI deals. I'm going to be looking at the technology sector in particular because if we see any deals coming out from the Saudi Arabia says they're going to invest $500 billion and et cetera, that could make things a little bit exciting from the headline perspective. So keep in mind this meeting is going to be around lunchtime on the east coast, so probably around 11:30, 12 o'. Clock. That puts you in London around 5 o'. Clock. If you put on the continent, you're around 6pm so again, that's when you're going to probably see the headlines about an hour after that. Other things geopolitical wise, those of you who exposure to energy or interested in Venezuela. Just last night, Senator State Secretary of State Mark Rubio said that there's a new terrorism designation. As you remember the Gerald Ford. The USS Gerald Ford, an aircraft carrier, has gone from the Mediterranean to the Caribbean. It just entered the Caribbean waters this past weekend. Stay close to our defense analysts, Wayne Sanders for Bloomberg Intelligence, Becca Wasser from Bloomberg Economics. So if we get into a situation where the United States does decide to attack Venezuela through strikes or whatever, both Wayne and Becca would be the individual that you want to talk to. So again, ping me and I will make sure that you get in touch with them. Finally, as part of this hollow thank miss period. Just to remember AA tariffs is still up there with the Supreme Court. You know, one of the things that my colleague Holly from has been looking at is this idea of refund chaos. What happens if the United States has to actually refund about $100 billion worth of money? She's put a note out on the terminal. So talking about this again as we get closer to that. And you want to know what happens now after the Supreme Court case? We're going to have a lot of stuff here. But again, I'm just giving you a heads up on that. And then finally, before we get to the last question that's in the chat, for those of you who are in the housing policy space, you've read a lot about 50 year mortgages. My colleague Drew Redding and Erica Adelberg has a piece about talking about why these 50 year mortgages most likely won't be taken up by the industry. Just last week we saw Bill Pulte, the FEHFA director talked about portable mortgages. But as a reminder, Bill Ackman has a Twitter spaces tomorrow that he's going to be talking about and he's most likely going to be talking about recap and release in terms of taking Fannie Mae and Freddie Mac public. So you may see some headlines there if you do have questions on housing policy. My colleague Ben Elliott is the individual that you want to talk to. So just as a heads up, you may see some Fannie Fredline, Franny Freddie headlines tomorrow. So the last question that I we got in here from one of our clients was when can we expect President Trump? Oh, I see the, I see the other question. Yep, I got that. When can we expect President Trump to make a Fed chair pick and how easy will it be to get through the Senate? So I, you know, the anticipation has always been that we would see this before the end of the year. Last official word we had from Treasury Secretary Scott Bessant is that he would make his recommendations to the president by Thanksgiving, which for those of you who are not in the United States is a week from Thursday. We're still going to have a call next week. I'll be working most, in fact all, I think most of the Thanksgiving week. But for those of you not outside of the United States, Thanksgiving is a week from Thursday. So that's when Scott Bessen has said that he would make his pick to President Trump. And Trump has always said by the end of the year. Now the nomination wouldn't actually come until after Jerome Powell leaves. And how easy will it be to get through the Senate? I think fairly easy if you go off of the idea of the frontrunners, people like Kevin Moore, Kevin Hassett, Secretary Bess and himself, Chris Waller, the governor. You know, I don't think there's anything really hair controversial when it comes to the Senate side. So I think it'd be fairly easy. And then the last question is, is the hemp band relevant to production materials like paper and cloth? Yes, a little bit. But to that client, I would ask you to speak with my colleague, Ken Shea. He's our marijuana analyst, actually. Well, obviously he does a little bit more than just marijuana, but he's done a lot of work about hemp in particular and so he can assist you. So there is some relevance here. But you know, off the top of my head, I don't want to say it's market moving, but again, I'll let Ken correct me if, if I feel differently or if, if he feels differently. So with that, I'm going to sign off. I want to say thank you very much for sticking in a few extra minutes on this call. I promise. Going back, we'll go Back to the 10 to 15 minute mark next week, but there was just a lot of talk about and we had missed a week. But again, thank you very much. We really appreciate you listening. To those who are listening in Balanced Power podcast, we hope the audio is better for you now.
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Our thanks to Nathan Dean, Bloomberg Intelligence Senior Policy Analyst, bringing you the latest installment of his weekly Washington Policy Pulse. For more from BI or to join this call live each week, you can email nathan@ndeanloomberg.net that's n d e a n bloomberg.net and come back to the podcast later today for the latest edition of Balance of Power. There's no championship league for small business owners. But if there was, you'd be at the top of the standings. Because going pro with Lenovo Pro means you've got the winning formation. One on one Advice IT solutions and customized hardware powered by Intel Core Ultra processors help you stay ahead of the competition. Business Goes Pro with Lenovo Pro Sign up for free@lenovo.com Pro.
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