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Illustration: Annelise Capossela/Axios

The House Financial Services Committee will convene a hearing tomorrow on "recent market volatility involving GameStop stock and other stocks" to continue the whodunnit of the current state of financial markets, especially U.S. stocks.

What's happening: Chair Maxine Waters will question the CEOs of Reddit, Robinhood, Citadel Securities, Melvin Capital and Keith Gill, also known as Roaring Kitty or u/DeepF--kingValue.

  • She will "examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors."

Between the lines: Waters has made clear who she believes the villains to be in this story, noting in a Jan. 28 press release that "[h]edge funds have a long history of predatory conduct and that conduct is entirely indefensible. Private funds preying on the pension funds of hard working Americans must be stopped."

Reality check: It's unclear how the hedge funds' speculative activity and predatory conduct hurt anyone besides their clients.

  • Most of the retail traders, including Gill, made money as a result of the hedge funds' short positions.
  • Even after the huge losses that GameStop shares suffered in the past two weeks, the stock remains nearly three times higher than its price at the beginning of the year and is more than 10 times higher than where it traded a year ago.
  • The volatility in GameStop and other "meme" stocks was largely contained to those stocks, while the overall market saw volatility decline and major indexes rise to record highs.

The big picture: That could mean the culprits for the excesses and wild swings in the market are elsewhere, and central bankers have spent the past week doing their best to keep eyes from looking in their direction.

What they're saying: St. Louis Fed president James Bullard became the latest central banker to insist that, in fact, there is no bubble. “You do see speculative frenzies from time to time in markets, and that’s part of the process.”

  • European Central Bank president Christine Lagarde last week sought to distance central banks from the discussion, arguing that market frenzies and inequality were "clearly ... not for central banks to address."
  • Fed chair Jerome Powell has outright denied that there's any sort of connection between central banks drowning markets in liquidity and bubble conditions.
  • And on Monday Bank of Japan governor Haruhiko Kuroda, who oversees a central bank that is the single largest stock holder in the country, chimed in: “Optimism over the global economic outlook and steady vaccine roll-outs may be behind the recent surge in stock prices.”

This is despite essentially all of Wall Street, most former central bankers and their own research refuting such claims.

Go deeper

China's political power grows with its capital markets

Illustration: Aïda Amer/Axios

Thanks to a mandate for outside investment and its strong rebound from the coronavirus pandemic, China’s financial markets are drawing record high chunks of global capital — particularly from U.S.-based investors — and are poised to keep growing.

Why it matters: As more money flows to China’s markets, its political leaders will have a clear mechanism to increase the country’s political power, giving China another potent weapon to challenge the United States’ position as the world’s financial superpower.

Updated 2 hours ago - Health

WHO: Delta health measures help fight Omicron

Photo: Mario Tama/Getty Images

Health measures taken to combat COVID-19 before the emergence of Omicron would also help against the new variant of concern, World Health Organization officials said Friday.

What they're saying: Takeshi Kasai, WHO regional director for the Western Pacific, said during a virtual briefing broadcast from Manila, Philippines, that border controls imposed by the U.S. and other nations can "buy time" to deal with the variant, but warned "every country and every community must prepare for new surges in cases."

3 hours ago - Health

Nevada to impose insurance surcharge on unvaccinated state workers

Nevada Gov. Steve Sisolak. Photo: Ethan Miller/Getty Images

Nevada's Public Employees' Benefit Program Board voted Thursday to charge workers enrolled in public employee health insurance plans a surcharge of up to $55 a month if they're not vaccinated against COVID-19, the Las Vegas Review-Journal reports.

Why it matters: Nevada is the first state to announce such a move, per AP.