Mon, April 18, 2022 | 10:08AM ET

Twitter, Fed and Senate election OH

Name: FS Insight
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L . Thomas Block

Washington Policy Strategist

Key Takeaways:

Finance and business may intersect with Elon Musk’s effort to take over Twitter. Will the corporate politics of the takeover collide with the debate over big tech and a bias against the political right.
Fed continues to send strong signals that the May meeting will increase rates by 50bps, debate appears over.
Battle for Senate control may hinge on Republicans holding seat in OH where popular Republican is retiring and President Trump is taking sides.

The business and political world collided when Elon Musk announced his intention to take over Twitter and make it a private company. Big Tech has been the focus of a political tug-of-war as both Democrats and Republicans have fought over how best to regulate the growing influence the industry seems to have. For Republicans there has been a great deal of concern over the fact that some conservative politicians, led by former President Trump, have been taken off of platforms, and specifically Twitter which had become the communications source of choice by the former President.

In both my political and corporate careers I would sometimes work with business entities that were concerned about hostile takeovers and advise on how government action could be part of either a defense or acquisition strategy. With the growing possibility that Republicans could take over leadership of the House and Senate, the role Congress might play in Big Tech policy and corporate control becomes a focus of attention. Conservatives look to Elon Musk’s takeover move as a potential vehicle to get the former President and other conservative leaders up on the popular platform that has seen them banned. Musk has stated that he has trouble with the concept of permanently banning people from social media platforms.

The Musk potential acquisition of Twitter should be watched as a sign of where public policy in tech may be headed.

Fed

The Fed continues to telegraph a policy move at the May meeting of the FOMC to hike interest rates by 50bps. It has become clear that Fed Chair Jay Powell wants a policy that allows market participants to have confidence in the direction of rates, and supporters of the Chair have been increasingly clear that the next rate hike in May will be 50bps.

The most recent comments came last Thursday from New York Fed President John Williams. The New York Fed President is a permanent member of the Fed’s policy arm, the Federal Open Markets Committee. In a Bloomberg interview President Williams said, “I think from a monetary policy point of view, it does make sense for us to move expeditiously towards more normal levels of federal funds rate, and also move forward on our balance sheet reduction plans.”

The FOMC meets on May 4/5, with the rate announcement at the meeting’s conclusion on May 5, followed by the regular press meeting by the Fed Chair.

Midterm Senate races

Historical patterns, along with sinking poll numbers for President Biden point towards large losses for Democrats in the November elections. However, in the US Senate where one-third of the body is up every two years, in 2022 the Republicans have a larger number of seats to defend. 21 of the seats up this year are currently held by Republicans and only 14 by Democrats. Of the seats that Republicans will be defending, three are in competitive states where a popular Republican Senator is retiring. Last week I looked at PA, this week I will write about OH.

Ohio

While Ohio has become less of a toss-up state in recent years and voting more solidly Republican, it still has a Democratic Senator and a sharply divided Republican Party. With the retirement of popular Republican Rob Portman the Democrats have united behind a labor leaning Democrat from the Cleveland area, Tim Ryan. Rep. Ryan’s political stances reflect that of the other Ohio Senator Sharrod Brown, a Democrat who easily won re-election in 2018.

The Republicans face a bruising primary on May 7. The race was spotlighted last week when President Trump weighed in and endorsed conservative commentator, venture capitalist and author J.D. Vance. Similarly to his endorsement of Dr. Oz in PA, the former President appears to appreciate the electoral advantage that accompanies a celebrity.

The crowded Republican field also includes Josh Mandel, a former State Treasurer, investment banker Mike Gibbons, and former Republican State Chair Jane Timken. All four candidates were running as the most loyal Trump supporter, and late last year they all met with President Trump at Mar-a-Lago. Several of the candidates have hired Trump advisers; but it was Vance who stood out as the sole candidate willing to question the motives of Ukrainian President Zelensky and win the favor of the former President. Retiring Senator Rob Portman endorsed the more establishment candidate Jane Timken; but at this point polling has shown a tight race with no clear leader.

Democrats are hoping that a divided Republican Party, along with a Democratic candidate whose ideology has found success in past Ohio races, will be able to buck the Republican trend in Ohio, and overcome the weakening poll numbers of President Biden.

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