By Alan Murray and Geoffrey Smith
February 14, 2017

Good morning.

Michael Flynn has resigned as Donald Trump’s national security adviser following reports that he discussed sanctions with Russian officials before the inauguration of the new President, and then misled Vice President Pence about the conversations. You can read his resignation letter here. Retired Lt. Gen. Keith Kellogg will take over in an acting capacity. The Associated Press says he is one of three candidates in the frame to get the job on a permanent basis, the other two being former general and CIA director David Petraeus, and Robert Harward, a former deputy commander of the U.S. Central Command and an erstwhile regional CEO for Lockheed Martin in the United Arab Emirates.

Meanwhile, Steven Mnuchin was confirmed and sworn in as Treasury Secretary.

The Wall Street Journal has an interesting article suggesting the new administration is softening its stance toward Chinese currency manipulation—a welcome development since for the last year and a half the Chinese have spent hundreds of billions of dollars to prop their currency up, rather than push it down as Trump had charged. At the same time, the administration is considering creating a panel to look into the transfer of technology—a more serious concern among U.S. businesses, which complain about rampant intellectual property theft in China.

All signs that the new administration may be starting to settle into something closer to normalcy.

Apologies yesterday for mislabeling the Committee (not Council) for Economic Development.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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