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Illustration: Sarah Grillo/Axios
Thanks to Facebook entering the space, the grown ups have come in to turn on the lights and throw cold water on the cryptocurrency party.
Driving the news: Following President Trump's Twitter condemnation of crypto as "not money" and "based on thin air" Thursday, Treasury Secretary Steve Mnuchin on Monday said the U.S. government had "very serious concerns" about crypto's growth and its potential use in money laundering and financing terrorism.
The big picture: Facebook's dive into cryptocurrency with its Libra project has put digital payments squarely in the bullseye of government regulators, just as Bitcoin and other cryptos had started to rebound in value.
Cryptocurrencies had largely flown under the regulatory radar for much of their existence, and Wall Street had effectively bailed out of further engagement in March. But the combination of anonymous peer-to-peer currency creation joined with a lightning rod like Facebook created an unholy union that just about everyone could find a reason not to like.
The big picture: Global central banks recently have been contemplating issuing digital currencies and creating regulations around the broader digital payment space — though as incoming ECB head Christine Lagarde said in March, that would exclude cryptocurrencies, which are created by users on a blockchain outside the auspices of monetary authorities.
What's next? David Marcus, co-creator of Libra, released a statement to the Senate banking committee saying Facebook would work closely with regulators before launching the currency, and promised it would not compete with central banks. He's expected to address members of Congress today.
The headline reading of July's Empire Manufacturing Index gained back about half of the decline from the month before, rising to 4.3, from -8.6 in June. However, the details of the report "were not very good," notes DRW Trading rates analyst Lou Brien, particularly the "notably weak" employment picture, which showed its lowest reading since September 2016.
Further, as Pantheon Macroeconomics chief economist Ian Shepherdson notes, the rebound in the headline number came largely from improved sentiment based on the fact that tariffs on Mexico were not implemented.
June's retail sales report out this morning will be the last major piece of the consumer spending picture for Q2. Bullish analysts hope it will continue the rebound from late 2018 and early 2019 when the sector looked to be in trouble.
With the Fed universally expected to cut U.S. interest rates this month, central banks around the globe are doing the same, and an increasing number of policymakers aren't even waiting for Powell to make the announcement.
What's happening: Analysts expect the South African Reserve Bank, Bank of Korea and Bank Indonesia to lower rates at their respective policy meetings on Thursday.
Why it matters: The central banks represent 3 of the world's largest emerging market countries and their actions send a clear signal that even with global debt rising to new highs, especially in EM, policymakers are prioritizing easy money and stimulus.
Why you'll hear about this again: The Fed's rate cuts were expected to help weaken the dollar, which President Trump and U.S. businesses have complained about since 2018. However, with central banks around the globe following suit, the dollar could continue its outperformance, especially as uncertainty from Brexit, Japan and the U.S.-China trade war weigh on sentiment and boost the dollar's safe-haven appeal.
A new survey of 9,100 retail investors in 25 countries from investment bank Natixis finds that many are in need of a "reality check."
What they said:
Retail bond investors were especially confused.
Between the lines: The survey also showed retail investors feel especially confident in their return expectations, with long-term return expectations rising to 10.9% (above inflation) from 9.8% in 2018. A contingent of U.S. financial advisors also surveyed by Natixis in 2018 think an annual return of 6.3% is realistic.
Of note: In the U.S., Natixis surveyed 750 investors with a minimum of $100,000 of investable assets.
Editor's note: The top story has been updated to correct the spelling of Sen. Sherrod Brown's first name.