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Clearing the Barr — Michael Barr is headed to the Senate floor and appears well on his way to becoming the next Federal Reserve vice chair for supervision, the government’s top Wall Street regulator.

Republicans and Democrats on the Senate Banking Committee came together Wednesday to advance Barr’s nomination in a 17-7 vote, suggesting he has plenty of support to sail through a final vote on the Senate floor.

The GOP “ayes” included Pat Toomey of Pennsylvania, the ranking Republican, and Sens. Tim Scott of South Carolina, Mike Rounds of South Dakota, Cynthia Lummis of Wyoming and Jerry Moran of Kansas. (The panel also advanced the president’s nominees to the SEC, Jaime Lizárraga and Mark Uyeda, by a voice vote.)

It was a dramatic turnabout from the bitter showdown on the committee this spring over the president’s first pick for the job, Sarah Bloom Raskin. Raskin, a former Fed governor and deputy Treasury secretary during the Obama administration, withdrew her name in March after Republicans boycotted a committee vote on her nomination, and Sen. Joe Manchin (D-W.Va.) said he would not support her over her climate views.

Toomey made a point to emphasize on Wednesday that, while he did not agree with all of Barr’s policy views, the nominee has “publicly acknowledged that the Fed does not have the authority to, nor should it, allocate credit or use its regulatory powers to accelerate the transition to a low-carbon economy.”

It’s not clear how soon the full Senate will vote on the nomination, but Senate Banking Chair Sherrod Brown said of Barr, “We need to get him on the job immediately.”

Just a little reminder: Barr was deemed too moderate early last year by some progressives when the administration was eyeing him for a job leading the Office of the Comptroller of the Currency, a national bank regulator. They backed someone else with more progressive bona fides, who couldn’t get out of committee. Now the OCC is still without a confirmed head and is unlikely to get one anytime soon, and Barr is likely to be confirmed to the Fed with a comfortable margin of Republican support.

Transparency, diversity pledges — Barr also apparently offered up a pair of commitments (if he is confirmed) to two of the panel’s members prior to Wednesday’s votes, though it’s not immediately clear to us how much he can effectuate change on the issues.

First, he told Toomey he would work with Fed Chair Jerome Powell and the heads of the regional reserve banks to “promote maximum transparency and accountability,” including striving to ensure that the Fed board and regional banks don’t engage in political activity and that they respond promptly to requests for information from Congress. (Toomey has raised complaints about some regional Fed banks wading into hot-button political issues and being unresponsive to lawmakers.)

Second, he told Sen. Bob Menendez (D-N.J.) he would “develop a transparent process with meaningful public input to ensure the Federal Reserve’s leadership better reflects the full diversity of America,” according to a statement from Menendez’s office. Menendez has blasted the Fed – and implicitly, the Biden administration — for failing to appoint any Hispanic officials to the central bank’s leadership ranks.

The commitment to Toomey “sounds like exactly the type of response a nominee would give to a key senator from the other party,” said Kaleb Nygaard, a senior research associate at the Yale Program on Financial Stability and editor in chief of the Centralverse blog. “The ‘work with Chair Powell and my fellow governors’ is the appropriate preamble because 1) it gives him something to point to if he’s ever questioned directly about lack of progress on this in the future, and 2) it reminds the senator who ultimately holds the power at the Fed — the Chair.”

IT’S THURSDAY — Sen. John Kennedy (R-La.) raised eyebrows this week with this inflation observation: "In my state, the price of gas is so high that it would be cheaper to buy cocaine and just run everywhere." Talk amongst yourselves.

Have a tip or a story idea? Let us know at [email protected] or @katedavidson, and [email protected] or @aubreeeweaver.

Senate Budget hearing on saving Social Security at 11 a.m. … Treasury Secretary Janet Yellen speaks at NYT Dealbook conference at 4:10 p.m.

GENSLER PREVIEWS PLAN TO TRANSFORM STOCK TRADING RULE — Our Katy O’Donnell: “SEC Chair Gary Gensler said Wednesday that he has directed agency staff to consider requiring brokerages to funnel individual stock orders into auctions in a bid to increase competition in the market.

“‘I’ve asked staff to make recommendations for the Commission’s consideration around how to enhance order-by-order competition,’ Gensler said in virtual remarks to the Piper Sandler Global Exchange & FinTech Conference. ‘This may be through open and transparent auctions or other means unless investors get midpoint or better prices.’”

Some reaction — Dennis Kelleher, president and CEO of Better Markets, said: “Competitive, transparent markets with a level playing field are essential to US global leadership in capital markets, to our economy, and to the living standards of all Americans. But none of that is guaranteed and all of it requires the faith and trust of individual investors to put their hard-earned money into those markets. Chair Gensler’s entirely reasonable, indeed, modest proposals today are all aimed at ensuring that faith and trust is well-deserved, and that US leadership will continue for many years to come.”

Cowen Research Group’s Jaret Seiberg: “Regardless of when it is released, we don't see how Gensler can complete work on this project before Joe Biden's first term ends on Jan. 20, 2025. As we do not expect Gensler to stay beyond the end of Biden's first term, this would leave the fate of these reforms to whomever is the next SEC chair.”

But the proposed revamp is getting some heat from Wall Street — WSJ’s Paul Kiernan and Alexander Osipovich: “Mr. Gensler outlined the potential changes Wednesday and was greeted with skepticism from an array of financial-industry executives who said the SEC’s far-reaching plans are unnecessary. A top executive with Robinhood Markets Inc. argued that individual investors are winners in the current system, enjoying benefits such as zero-commission trades. ‘It is a really good climate for retail, so to go in and muck with it right now, to me, is a little worrisome,’ Robinhood Chief Legal Officer Dan Gallagher said at the Piper Sandler Global Exchange & FinTech Conference in New York.”

FIRST IN MM: ANDY BARR LETTER ON RUSSIAN ENERGY PAYMENTS — Rep. Andy Barr (R-Ky.) is urging Treasury Secretary Janet Yellen to allow the expiration of a waiver that permits U.S. banks to process transactions on behalf of other countries buying Russian oil and gas. Although the U.S. itself has banned Russian energy imports, the Treasury has allowed American financial firms to process payments on behalf of other countries by providing an exception to U.S. sanctions. The waiver is set to expire on June 24.

“While I am pleased to see our European allies announce new restrictions on oil imports,” Barr said in a letter to Yellen Wednesday, “these measures are partial in nature and delay tough action for months — time that Ukrainians cannot afford to lose.”

Barr has introduced legislation to eliminate the waiver unless Russian oil revenue was being held in escrow to be used for authorized purposes.

YELLEN: SOME CHINA TARIFF CUTS MAY BE WARRANTED — Reuters’ David Lawder: “U.S. Treasury Secretary Janet Yellen said on Wednesday the Biden administration was looking to ‘reconfigure’ tariffs on Chinese imports but warned that such cuts would not be a ‘panacea’ for easing high inflation. Yellen told a U.S. House of Representatives Ways and Means Committee hearing that the Biden administration was examining changes to the ‘Section 301’ tariffs on Chinese goods and to the process for product-specific exclusions from those duties.”

POWELL’S OPINIONS ON INFLATION MATTER, NOT BIDEN’S — WSJ’s Greg Ip: “If Mr. Biden had the last word on inflation, you might worry the U.S. was about to repeat the 1970s. But Mr. Biden doesn’t have the last word; Federal Reserve Chairman Jerome Powell does. Moreover, Mr. Biden affirmed exactly that in a Wall Street Journal Op-Ed last week, giving Mr. Powell the political cover to raise interest rates and get inflation down.”

WHITE HOUSE STRUGGLING TO TALK ABOUT INFLATION — NYT’s Zolan Kanno-Youngs and Jeanna Smialek: “President Biden was at a private meeting discussing student debt forgiveness this year when, as happens uncomfortably often these days, the conversation came back to inflation. ‘He said with everything he does, Republicans are going to attack him and use the word ‘inflation,’’ said Representative Tony Cárdenas, Democrat of California, referring to Mr. Biden’s meeting with the Congressional Hispanic Caucus in April. Mr. Cárdenas said Mr. Biden was aware he would be attacked over rising prices ‘no matter what issue we’re talking about.’

“The comment underscored how today’s rapid price increases, the fastest since the 1980s, pose a glaring political liability that looms over every major policy decision the White House makes — leaving Mr. Biden and his colleagues on the defensive as officials discover that there is no good way to talk to voters about inflation.”

BEHNAM PRAISES LUMMIS, GILLIBRAND CRYPTO BILL — Our Sam Sutton: “CFTC Chair Rostin Behnam has reviewed Sens. Cynthia Lummis and Kirsten Gillibrand’s cryptocurrency bill. He likes what he sees.

“‘It does a very good job,’ Behnam said at a crypto event hosted by The Washington Post on Wednesday. He then praised the 69-page bill’s approach in differentiating digital assets as securities or commodities. ‘It would give the CFTC authority to write rules and regulate the stakeholders within the financial ecosystem.’”

NY REGULATOR ISSUES NEW STABLECOIN GUIDELINES — Also from Sam: “The New York State Department of Financial Services has set new guidelines for stablecoin businesses following market turmoil triggered by the collapse of a digital token whose value had been pegged to the dollar.

“With Congress still grappling with how to regulate the popular digital assets, DFS Superintendent Adrienne Harris on Wednesday issued new standards requiring issuers to maintain a stockpile of high-quality reserve assets that would allow their tokens to be redeemed on a one-to-one basis with the U.S. dollar.”

Amanda Eversole has joined the American Petroleum Institute as its next chief advocacy officer. She previously spent two years at JPMorgan as its corporate responsibility team's managing director and head of public affairs, and is a longtime U.S. Chamber of Commerce alum.

THE STOCK MARKET IS IN A RUT — Bloomberg’s Vildana Hajric and Isabelle Lee: “It might not exactly feel like it, but the stock market has been, well, kind of boring. The choppiness and seemingly constant mid-session about-faces are obscuring the bigger picture: the S&P 500 has been vacillating within a roughly 100-point range over the past two weeks. It has stayed above 4,050 since the end of May and pushed over 4,160 earlier in the week, a level it’s had difficulty sustaining. It was around 4,117 on Wednesday afternoon in New York.”

ANOTHER QUARTER, ANOTHER PROFIT WARNING FROM CREDIT SUISSE — NYT’s Jason Karaian: “In what is becoming a habit for Credit Suisse, the Swiss banking giant warned investors on Wednesday that it was likely to lose money in its latest quarter. This would be Credit Suisse’s third loss-making quarter in a row, each of which was preceded by a warning that the results would be worse than the bank had initially expected, as it reels from a series of crises and upheavals.”

SOUTH KOREA INVESTIGATES COMPANY BEHIND LUNA CRYPTO CRASH — FT’s Song Jung-a: “South Korean police and prosecutors are investigating Do Kwon’s Terraform Labs after the $40bn implosion of his tokens rattled the global crypto market. The Seoul Metropolitan Police Agency said it had launched a probe into allegations that an employee of Terraform Labs embezzled an undisclosed amount of the company’s bitcoin holdings.”