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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. My name is Nathan Dean. I'm a senior Policy analyst with Bloomberg Intelligence here in the Washington D.C. bureau. Want to say thank you very much for attending in the BI Washington Policy Pulse. We also want to say thank you to those of you who are listening to us via the Balance of Power podcast. We always appreciate your listening and let's go ahead and get started. Today is March 23, 2026 and for those of you in the Washington D.C. area, I hope you had a wonderful weekend just because the weather was absolutely amazing. So the first thing I want to talk about is just some of the updates that we saw just this morning in terms of the US Iran conflict. President Trump came out and said that there would be a five day pause, cease fire if you will, from attacking Iranian energy infrastructure. If you remember, over the weekend he gave a 48 hour deadline for Iran to essentially, I don't know, surrender or any type of, I don't know exactly what the outgame was the end game here was, but President Trump announced this morning that they would not attack us or sorry, Iranian energy infrastructure for five days case due to indirect talks. Now Axios is reporting that talks between the United States and Iran are taking place and they're not exactly talks, they're messages being sent via Turkey, Pakistan and Egypt. Now Iran denied that there were talks taking place, but President Trump just gave an impromptu press conference just a few minutes ago at the airport. He's heading to setting out of Palm beach and he's heading to Tennessee this morning before he returns to Washington. And a couple of things that he just said was a he's talking with somebody who's not The Supreme Leader, not the Khomeini. And he said that they have no indication that Khomeini is still alive. They're talking to this individual about potentially reopening the Hormuz or. And honestly, it's just at a very high level talk. You know, he also said that, you know, he could see a deal coming together within five days. But then when a reporter asked, well, why are the Marines steaming towards the region from California, he also said, well, look, I'm not going to tell you what our future plans were. So this is just, I guess, you know, going to have to just go back and put in the hip pocket if everybody's just going to have to stay attached to their Bloomberg terminals and see what's coming up next. However, there was a comment about the Iranian supplemental defense package that I think is somewhat interesting that I wanted to break down a little bit further on this call. Now over the weekend, it was reported at the late last week, over the weekend that the Pentagon is asking $200 billion for additional funding for this Iran supplemental package. Now in a press conference last week in the Oval Office, President Trump actually said it would be for Iran, Iran and other things. And everybody in Washington thinks and other things would be Cuba. But just this morning, President Trump was asked, do you still need the $200 billion if Iran and the United States were to come to a peace agreement? And he just said, look, it's a nice to have, it's not essential, it's a nice to have. That's not gonna go over well in Congress because the response from congressional leadership, and this is both Republicans and Democrats for difference of views, but the response was from the Republican side is this is not something we should be jumping into too quickly. A, because the Iran war again remains unpopular with independents and non political affiliated individuals and B, you know, there are some Republicans out here that think that we should either be doing this via the normal appropriations process or we should be doing this via reconciliation package. Neither of those can take place right now super quickly. And so, you know, you're not really seeing any movement on Congress to fully embrace this $200 billion package. Like I mentioned before, you know, if you see this come out from the White house, call it 200, call it 300 billion, you know, congressional appropriators are going to try and attach other things to it, $15 billion in farm aid in particular. So again, keep that in mind when you see any type of movement on this Iran supplemental defense package over on the Capitol hillside as well. Just remember we have A recess that begins on Friday. This is a two week recess. Now, that's important for two. One is the Save America Act. President Trump wants you to call it the Save America act. Not the SAVE act, but the Save America Act. This is obviously the voting rights bill. Voting again, like I mentioned before on last week's call, for those of you in the not familiar with it, voting is held by the state's rights. This would actually put federal standards in terms of requiring citizenship and id. There were other provisions included, like transgender sports and so forth like that. Where you need to go is, it's not going to pass. There's really no way that this thing is going to pass. The Republicans aren't going to get rid of the filibuster. They're not going to convert to a talking filibuster. So you're going to see continued votes through the end of this week and ultimately this bill is going to fail. Now, the reason why it's important is because of the DHS shutdown. Now, just this past weekend, I think a lot more Americans woke up to the fact that TSA lines are getting worse and worse. I saw some statistics that Houston Hobby had 56% of their TSA agents out sick at night. They had 38% of their TSA agents out sick. If you fly out of LaGuardia, obviously you know, it's a ground stop today because of the Air Canada crash. But also yesterday, you may see TSA lines going outside into the parking lot. This is the point in which Americans are waking up to the TSA and the DHS shutdown. Now, I haven't been able to find any polling on this in terms of like, who's getting the blame for this. But generally thinking, I think that if you're Democrat, you're blaming Republicans. If you're a Republican, you're blaming Democrats. And if you're an Independent, you're probably blaming Washington. So what's happening at the moment is there is a group of bipartisan senators. This is the same group that ended the shutdown last year. From the Democratic side, it's like Senator Cortez Mastro from Nevada, Senator Murray, the chief appropriator from the Dem side, Senator King, who's an independent, but caucus is with the Democrats. There are some negotiations taking place both with Republican senators and also representatives from the White House. Now, you know, you could see a deal come together. But remember, they're negotiating over ICE tactics. They're not negotiating over ICE funding. ICE funding has already gone through the one big beautiful bill. It's funded through 2029. There is a Senate conservative plan that's coming out from Senator Cruz and Senator Thune even floated this with the White House over the weekend that would say, look, why don't we just bypass TSA and I'm sorry, bypass ICE and bypass this customs and border. Pat, let's fund everything else and then we'll deal with those other two in a reconciliation bill. And this is where President Trump comes in. President Trump said that he's not passing anything until the Save America act passes. And I think he can say that, but I don't think he can actually follow through on that because if the Senate comes together and there is a deal this week, they're going to say we have a deal. The House will most likely pass that deal. And at that point, it's up to President Trump. Are you going to continue this or are you going to not? I think President Trump ultimately signs this deal because at the end of the day there is this two week recess that starts on Friday and there's no bigger pressure point. I hate to say this, but there's no bigger pressure point than telling senators or policymakers that they can't go home and they have to work on recess when they already have their two week plans already laid out. Now, for what it's worth, if we get into a situation where there is no deal this week, I do anticipate the Senate sticking around. I anticipate the House going home. That's okay, you know, because the House is ultimately going to just pass whatever the Senate passed. So if the Senate comes up with a deal like say Monday next week, House won't like it, but they are going to have to come back and they'll pass it. So just keep that in mind for the DHS shutdown. Let's talk a little bit regulatory side at the moment first. You know, last week we saw the Federal Reserve pass, not pass, but release its Basel endgame, Basel 3 endgame proposal. Now this is the big bank capital requirements. Now last week I said 3 to 7% increase in capital for the Basel 3 endgame and then you get a lot less due to the GSIB surcharge. The situation has changed just a little bit. So according to the Federal Reserve, and we're still doing our calculations, Arno Kakuna has a great piece that's out on the terminal right now. But according to the Federal Reserve, the Basel III endgame would actually increase capital requirements by about 1 to 8% and the G SIB surcharge would decrease. It by just around 4% in dollar terms. Taking those two into conjunction for those six G SIBs, you're looking at $18 billion in net relief. That is much less than what we had anticipated earlier this year. And we did get the question from some clients of okay, well, why aren't the bank stops moving on this? It was largely priced in. Everybody knew this was coming. So both of these proposals have a 90 day comment period. I'm actually going to be going through these proposals in greater detail. It's about 1500 pages. So that's what I'm going to be working on this week. But again, you know, it looks like just from a high level perspective, $18 billion is going to be is released. And then when you take into account the stress testing proposals that we've talked about on this call, you're looking at a 6% decrease across all banks because of all of these four or five proposals, including the enhanced supplementary leverage ratio. So I think all this is finalized at the end of this year. The stress testing proposals go much sooner, but the Basel III endgame, the GSIB surcharge and the standardized approaches proposal are finalized at the end of this year. And then the Fed moves on to other things like regional bank relief. So that's what we're seeing at the Basel III endgame. We also put out a piece this morning talking about what's happening at the Financial Stability Oversight Council. There is a meeting this week of the fsoc. Remember, this is the super body, think of like the super friends of regulatory agencies. It's led by treasury, but it's the Fed, the SEC, the CFTC, etc. If you're in the private equity space or in the Fund Space or BlackRock, this is a little bit of an interest to you because the FSOC is the one that deals with the systemic risk of asset managers and the systemic risk of anything like private markets or anything to that standpoint. Now in 2019, there was guidance under the Trump administration that made it more difficult for the FSOC to go forth and deem a company or an activity to be systemically risky. And if something is deemed systemically risky, then the Fed can come in and say, here's new capital requirements to safeguard against that systemic risk. So under the Trump administration, they actually put in new guidance that made it more difficult for the FSOC to go in and make it systemically risky. In 2023, the Biden era FSOC came in and said, okay, we're going to withdraw that standard and make it Easier to deem things that are going to be systemically risky. Now the pendulum has come back and this week you're going to see the F stock say we're going to take steps to withdraw the 2023 guidance, go back to 2019. So think activities based, think of, you know, specific activities could be systemically risky. But again, I get this question on private markets all the time. You know, what are the regulators thinking? They're not, yes, they are aware of private markets and they're aware of private credit and they're, they're aware of Jamie Dimon statements of cockroaches somewhere out there. But it's largely hands off. There's really nobody looking at it all that much. So just keep that in mind. And that's what's coming from the F stock this week. We also put a little piece of, just talking about the state of play of quarterly reporting. I talked about this last week just because now out on the terminal, which you should know is that next month we think the SEC is going to put our proposal that will allow companies to go to semiannual reporting as opposed to quarterly reporting in the, in the US States. You know, I worked with our ESG team on this. Some of the governance analysts that we've been looking at this is Rob Duboff and I were, we're putting this out and our thesis is essentially is that investors are going to push most publicly traded companies to keep it four quarters. Look, if you're on the call, you know, you want, you know, that fourth quarter, that fourth quarter reporting, you want that data and you want investor relations to be responsive to you. But we could see a scenario where small companies and newly publicly traded companies come in here and say, right, we're going to do semiannual from the get go. And over time you could see a transition to semiannual. Now look, if we get into a situation where semi annual, I'm not thinking quarterly is going away. I do think a lot of companies out there are going to be forced to do what they do in the UK for example, in terms of releasing sales releases and revenue releases, etc. But just keep that in mind as the SEC puts out its proposal. A couple other things. Well, we saw some statements from Senator Tillis. So we're leaving the regulatory world, going back to Capitol Hill. We saw Senator Thom Tillis over the week on Thursday, last week say that there potentially is an agreement on stablecoin yield when it comes to this crypto market structure. Bill. Now I'm not going to rehash this because look, if you've attended this call, you've heard this multiple times. But you know, banks don't want crypto platforms like Coinbase to offer rewards on their stablecoin partnerships, if you will. It's prohibited under the Genius Act. Where it looks like this is all headed is again, it's going to be a prohibition on paying interest or yield on balances, potentially not on usage. Now it's still not at the legislative text level. It's only at the high level, bullet point level. So anything can change. And my guess is they're going to hash this out later this week and then they won't deal with crypto until the end of that two week recess. So a lot of our crypto clients have asked me when do I think we're going to see momentum in the spill. I think you'll see a Senate banking markup towards the end of April. Call it April 20th, April 27th, right around there. And then if you don't get passage on this by May, then the momentum is really going to be struggling because the stablecoin yield was the largest roadblock. There's still a couple of other roadblocks out there, but I think they can be dealt with. But again, it's moving in the right direction for this crypto market structure bill. So again, but we won't see anything until after the, the two week recess. We're also getting questions on a bipartisan bill that the Wall Street Journal is reporting that's coming out in the Senate that would ban prediction markets. For what it's worth, there's already a House bill out there that would do this. This is just now the Senate bill because it's Senate and it's bipartisan. It's making people a little bit more excited about this bill. Just note, bills that come this close to the elections very rarely pass. You know, this bill is coming from Senator Curtis from Utah, who also just by the way, the House bill also came from a Utah congressman because Governor Cox of Utah is the one who's spearheading a Republican. Call it opposition to the prediction markets. So this sounds like a lot of the Utah delegation coming together and supporting each other. But bills that come out this early, early or this late, come to the midterms, really struggle to gain traction. I'd put this in your hip pocket and say put this in the bill for next year because if the CFTC doesn't tightly regulate these markets and we begin to see Americans really losing out in terms of prediction markets or betting markets or prop bets or anything like that in terms of prediction markets. I could see this coming out. I'll have more thoughts coming out on this later this week. But again, if you're looking at this from a headline perspective, you know, because DraftKings, for example, and FanDuel had some reactions to this. Just keep that in mind. And then finally, the last thing is the White House just last week released a three page bullet point framework on artificial intelligence. This is the White House's policy framework for AI. Our colleague Matt Shetnam put out a piece just this morning on this. What you need to know is, is that it's three pages. You really don't need any type of analysis to know that it's very difficult to come by in an election year. Very difficult to come by in any type of year. You know, you're not going to see this really Congress playing in the, the artificial intelligence framework, safety standards or anything like that. Maybe next year. But again, I'll, I'll, you know, maybe we'll have Matt come on later this week to talk about it in greater detail. But that's just our initial reaction. So with that I'm going to say thank you very much, yes to the client. Real quick. This is the DHS shutdown. I apologize you may have miss I think there is a decent chance they finish this week, you know, just because of the TSA. The TSA sickouts are approaching 30 to 50% in major market airports. President Trump just authorized ICE agents to be at the airports, according to news reports. I've seen they're already in Atlanta. They are not wearing masks. President Trump just put out a truth social post saying don't wear masks at the airport. But you know, I think the combination of look, at the end of the day there comes a point where Americans just say is enough, enough. This past weekend was most likely it. So I wouldn't be surprised if you saw a solution. We're not putting odds on this, but I wouldn't be surprised if you saw a solution later this week on this. So I'll pause there. Any other questions, comments, concerns? If not, thank you very much for attending. We always appreciate it. Have a wonderful week and we'll talk soon. Thank you.