STATE GOVERNMENT RELATIONS
Forecast of slow revenue growth leaves fiscal leaders cautious
A new state tax revenue forecast presented to the State Budget Committee highlights a constrained fiscal outlook for legislators preparing the upcoming two-year budget. The forecast anticipates tax collections rising by $732 million, or 3.3%, during the first year of the biennium. However, growth is expected to slow significantly in the second year, with only a $71 million increase, representing just 0.3%.
These modest projections suggest lawmakers may have limited additional revenue to allocate as they craft the next budget, potentially impacting funding priorities and fiscal flexibility.
State approves $60M for LEAP District development for Lilly, Meta projects
State budget officials approved the Indiana Economic Development Corp.'s plans to use $60 million to close on land deals and build infrastructure for a Meta data center and Eli Lilly and Co.'s planned medicine foundry at the LEAP Research and Innovation District in Boone County.
Pension board votes to remove BlackRock due to ESG violations
After Indiana Treasurer Daniel Elliott accused the global investment firm of making illegal environmental, social or governance commitments, the Indiana Public Retirement System board of trustees voted unanimously to dismiss BlackRock from handling the state's portfolio.
Read more from the Indiana Capital Chronicle
FEDERAL GOVERNMENT RELATIONS
Fed cuts rates but signals slower easing next year
The Federal Reserve has cut interest rates by a quarter percentage point, from 4.25-4.5%, indicating that economic activity has been expanding, but it signaled a slower pace of cutting next year due to remaining inflation concerns. "This was an unabashedly hawkish message from the Fed," says Aditya Bhave, senior U.S. economist at Bank of America. "I think we're in a good place, but I think from here it's a new phase and we're going to be cautious about further cuts," Fed Chair Jerome Powell said. After the announcement, the dollar rose to a two-year high, leading to a sell-off in U.S. and international stocks.
House rejects GOP plan as government barrels toward shutdown
House Republicans’ slimmed-down plan to try to avert a government shutdown was defeated in a hastily called vote Thursday, as several dozen GOP lawmakers joined with Democrats in rejecting the proposal endorsed by President-elect Donald Trump.
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McHenry, Hill call to halt rulemaking under Biden agenda
Current House Financial Services Committee Chair Patrick McHenry, R-N.C., and incoming Chair French Hill, R-Ark., have sent letters calling for federal agencies and regulators to refrain from "finalizing partisan rulemakings prior to the Trump administration entering office," as reported in Politico's Morning Money newsletter. McHenry and Hill also told the agencies to preserve all documents and communications that might be subject to the committee's oversight activities.
Bank acquisitions by credit unions set record in 2024
This year saw 20 credit unions reaching deals to acquire community banks, with such mergers making up about one-fifth of the banking sector's M&A activity in 2024, according to an American Banker analysis of S&P Global data. The record total underscores the challenges banks face in securing merger partners and the advantage that critics say credit unions hold because of their tax-exempt status.
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Trump backs bitcoin reserve, aims for crypto leadership
President-elect Donald Trump has reaffirmed plans to create a U.S. strategic cryptocurrency reserve, positioning the nation as a leader in digital assets to counter global competition, particularly from China. Trump's approach signals a dramatic shift in crypto policy, emphasizing innovation and growth. As bitcoin has surpassed $100,000, his vision includes retaining seized assets and advancing private-sector crypto integration, a move that could affect traditional banks while spurring financial sector innovation.
Read more from American Banker
Yellen cautions against tearing down banking regulators
Treasury Secretary Janet Yellen cautioned against drastic changes to U.S. banking regulations last Friday, emphasizing the importance of maintaining oversight of banks' capital, liquidity and risk-taking to ensure financial stability. While supportive of streamlining where feasible, Yellen defended the current regulatory framework, noting its role in strengthening the banking system after the 2008 financial crisis, and she highlighted the critical role of deposit insurance and liquidity access in preventing systemic risks.
Rep. Hill eyes regulations, cryptocurrency as Financial Services chair
Incoming House Financial Services Committee Chair Rep. French Hill, R-Ark., plans to steer the panel toward cutting regulations and establishing a market structure for cryptocurrencies. "Let's make community banking and commercial banking competitive again by removing some of the calcification in the regulatory system that's made it so hard to be profitable, serve customers, and be safe and sound," Hill said last Friday.