Mashadipati: Washington Edition: Guessing the endgame

This is Washington Edition, the newsletter about money, power and politics in the nation's capital. Every Monday, Bloomberg Intelligence senior analyst Nathan Dean gives his insights into what's been happening and what's coming up in the nooks and crannies of government and markets. Sign up here. Email our editors here.

What Comes Next?

One purpose of my job is to help Bloomberg Terminal clients sus out endgames. When a policy is announced, a client will call me to discuss what the impact will be on a company, what are the key catalysts along the journey and what is the ultimate outcome?

And I think that's the number one question everyone – investor or not – has about the war with Iran. How is it going to end? Is President Donald Trump feeling pressure? Will we see a TACO scenario? What happens if Iran responds to overtures to negotiate with more strikes of their own?

Over the weekend we saw National Economic Council Director Kevin Hassett suggest that the war would take between four and six weeks, making early April a key date to watch. But there are a lot of questions about what's ahead. Will the EU and other allies resist Trump's demands for help protecting the Strait of Hormuz? It doesn't sound like Japan has any interest.

Trump has even floated delaying his meeting with Chinese President Xi Jinping later this month if Beijing doesn't help, though Treasury Secretary Scott Bessent denied that would be the cause of any postponement.

This is my way of saying that no one really knows. Except, perhaps, one person: Trump. That's why I recommend Peter Martin, Fiona MacDonald, Donato Paolo Mancini, and Alberto Nardelli's piece "Trump Leaves Allies and Foes Guessing on Endgame for Iran."

Read More:

Another endgame you may hear about this week is the Basel III Endgame. Some of you – OK, maybe 10 of you — may remember it from a random NFL commercial a few years ago. If you are a bank investor, you'll be hearing about it more. Banking regulators will propose its long waited rule this week. My colleague Arnold Kakuda has done some math in advance of the details, and he estimates around $32 billion may ultimately be returned to the largest banks. Here's more for Bloomberg Terminal subscribers.

Last week I talked about an endgame for the Department of Homeland Security shutdown – no real change this week – but the pressure is increasing. Here's María Paula Mijares Torres with more on how the airlines are pressuring Congress to make a deal.

Tidbits

It's time to fill out those March Madness brackets. And despite my Purdue Boilermakers winning the Big Ten tourney yesterday, I'm thinking Michigan over UConn in the men's, UCLA over South Carolina in the women's.
I also expect some of you will be part of the $3.3 billion estimated to be wagered on the tourney, maybe part of the prediction markets? Last week the CFTC announced a new plan for rules for the sector. Here's Lydia Beyoud and Emily Nicolle with more.

Don't Miss

White House Chief of Staff Susie Wiles, the first woman to hold the position, has been diagnosed with early stage breast cancer but plans to continue working, Trump said today.

Trade representatives from the US and South Korea are set to meet in Washington this week to discuss potential investments in American energy projects and other ventures under a recently approved $350 billion fund.

The US and China are considering a new mechanism that could potentially oversee economic ties and manage bilateral concerns between the two geoeconomic competitors.

Trump's attempts to strong-arm Republicans into gutting Senate rules to pass voter ID legislation will spill out onto the Senate floor this week, focusing political time and attention on a MAGA priority that appears certain to fail.

The Supreme Court said it will hear arguments on Trump's bid to open more than 350,000 Haitians and Syrians to the prospect of being deported, in a clash over protections for people whose home countries are in crisis.

Industrial production in the US rose modestly in February, lifted by a second month of gains in manufacturing and mining output.

As Washington chokes off Cuba's fuel supply and tries to force the communist-run island into a bargain, property claims by exiles are emerging as a thorny obstacle to hopes of reviving the island's crushed economy.

Court papers related to US Attorney Jeanine Pirro's investigation of the Federal Reserve show Chair Jerome Powell feels compelled to stay on the central bank's Board of Governors, at least until the legal process is completed.

The BBC asked a judge to toss out Trump's $10 billion lawsuit over a misleading edit of his speech before the Jan. 6, 2021 assault on the Capitol, arguing the lawsuit will chill free speech and undermine "robust reporting."

Watch & Listen

Today on Bloomberg Television's Balance of Power early edition at 1 p.m., host Kailey Leinz interviewed Natasha Hall, associate fellow at Chatham House, about the latest developments in the war with Iran.

On the program at 5 p.m., she talks with Democratic Representative Maggie Goodlander, a member of the Armed Services Committee, about the war and the continued shutdown of DHS.

On the Odd Lots podcast, Bloomberg's Tracy Alloway and Joe Weisenthal speak with Tom Karako, a senior fellow and director of the Missile Defense Project at the Center for Strategic and International Studies, about the size and scale of the American arsenal, the supply chain constraints for building more missiles, and the Pentagon's general attempts to ramp up production. Listen on iHeart, Apple Podcasts and Spotify.

Map of the Day

Spending on data center projects in the US has exploded, surpassing offices for the first time at the end of last year, driven by tech companies' needs for AI processing facilities. The properties are figuring heavily into portfolios of major investors such as Blackstone Inc., Brookfield Asset Management Ltd. and KKR & Co., on a bet that long-term demand for computing power will continue to grow. At the same time, office development has slowed as cities across the US contend with vacancies that have piled up since the Covid lockdowns. But there's been opposition to data centers in some communities, where voters worried about rising electrical bills are seeking to block their construction. The backlash has prompted Trump and some state governors to encourage data center operators to generate or pay for their own power. — Edison Wu

What's Next

Pending home sales in February will be reported tomorrow.

The Illinois primary is tomorrow.

The producer price index for February will be reported Wednesday.

Factory orders in January also will be reported Wednesday.

The Federal Reserve releases its decision on its benchmark interest rate at 2 p.m. on Wednesday followed by a news conference with Powell at 2:30 p.m.

The nomination hearing for Markwayne Mullin as Homeland Security secretary is scheduled for Wednesday before the Senate Homeland Security and Governmental Affairs Committee.

New home sales in January will be released Thursday.

Japan's Prime Minister Sanae Takaichi is scheduled to meet with Trump in Washington on Thursday.

Seen Elsewhere

The head of a federal arts commission is proposing replacing the nearly 200-year-old columns at the White House entrance with a more ornate Corinthian-style that Trump favors, the Washington Post reports.
The kitchen countertop industry is seeking legal immunity from Congress as it faces mounting lawsuits from stone-fabrication workers diagnoses with the lung disease silicosis, the New York Times reports.
The University of Florida is deactivating the campus College Republicans as a registered student group over accusations of racist and antisemitic language in a group chat, the Associated Press reports.