Overnight Finance: Fed raises rates for second time in 2017 | GOP weighs keeping ObamaCare taxes | Tax reform becomes Wall Street obsession

Overnight Finance: Fed raises rates for second time in 2017 | GOP weighs keeping ObamaCare taxes | Tax reform becomes Wall Street obsession
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Fed raises rates for second time in 2017: The Federal Reserve on Wednesday raised interest rates a quarter of a point to a range between 1 percent and 1.25 percent, citing the relatively steady growth of the economy and need to return to higher baselines.

The decision was expected after months of hinting. It is the second such hike by the central bank in 2017.

Fed officials said "realized and expected labor market conditions and inflation justified the hike, which was supported by all Federal Open Markets Committee (FOMC) members but Minneapolis Fed President Neel Kashkari."

FOMC also hinted toward future hikes this year, saying it "expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate." I've got more here: http://bit.ly/2tngkxR.


GOP considers keeping ObamaCare taxes: Senators are seriously considering keeping in place some ObamaCare taxes for longer than the House-passed bill would as they seek to draft healthcare legislation that can pass their chamber with a simple majority.

Republicans are looking to slowly phase out extra federal funds for Medicaid expansion, beef up the new tax credits for buying insurance and add money for opioid abuse treatment -- but they'll have to pay for it to ensure the bill passes muster.

That's because the Senate healthcare bill must save at least as much money as the House's legislation. Some senators are interested in additions to the healthcare bill that could cost the government, and savings would have to be found elsewhere, perhaps in some of the taxes, Sen. John ThuneJohn Randolph ThuneStop labeling babies as 'born addicted' — it stigmatizes them and is inaccurate Trump plan to claw back billion in spending in peril McConnell: Mueller 'ought to wrap it up' MORE (S.D.), the chamber's No. 3 Republican, said.

Sen. Orrin HatchOrrin Grant HatchGOP senators introduce bill to prevent family separations at border Overnight Defense: States pull National Guard troops over family separation policy | Senators question pick for Afghan commander | US leaves UN Human Rights Council Senate GOP tries to defuse Trump border crisis MORE (R-Utah), who is heavily involved in the healthcare discussions as chairman of the Senate Finance Committee, said that his preference is to repeal all of the taxes but that senators would "look at everything."

"We're not going to ignore anything," he told reporters Tuesday. "We're going to have to really look very carefully." The Hill's Naomi Jagoda reports: http://bit.ly/2tnDT9K.


Tax reform becomes Wall Street obsession: Financial analysts and investors are on constant alert for any crumb of news from Washington about tax reform as they try to game out which companies will win big and how it will affect profits going forward.

But industry sources tell The Hill that the high hopes for a tax overhaul that fueled a stock rally after President Trump's election are starting to fade, due in part to the slow pace of legislating and the administration's decision to release a tax plan with few details.

"There was a huge disconnect between Washington and New York with regards to tax reform," said a former Senate aide now on K Street. "Folks within the business community are starting to realize that the aggressive agenda that was put forth by this administration in the early days was a pipe dream." I'll tell you why here: http://bit.ly/2tnwAz7.


Happy Wednesday and welcome to Overnight Finance. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. 

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.


On tap tomorrow:

  • House Financial Services Committee: Markup of legislation extending the National Flood Insurance Program, 9 a.m.


Mnuchin denies White House tried to block Dem oversight efforts: Treasury Secretary Steven Mnuchin on Wednesday denied reports that the Trump administration was seeking to block oversight by Democratic lawmakers.

In an Appropriations subcommittee hearing, ranking member Rep. Nita Lowey (D-N.Y.) asked Mnuchin about reports that the White House instructed members of the administration to ignore requests and questions from Democrats.

"If this is true, this is a serious departure of comity between the executive and legislative branches of our government," Lowey said.

Mnuchin said no such instructions had been issued.

"I'm not aware of any such instructions, and, yes, we would -- we would respond to questions or comments letters from you," he told Lowey. The Hill's Niv Elis reports: http://bit.ly/2tnnnGH.


House votes to bar undocumented immigrants from healthcare tax credits: The House passed legislation Tuesday to ensure that immigrants in the country illegally can't access tax credits for health insurance premiums.

Rep. Lou BarlettaLouis (Lou) James BarlettaPoll: Casey holds double-digit lead over Barletta in Pa. Senate race How lawmakers have landed an endorsement from Trump Pennsylvania lawmakers invite Eagles to Capitol after Trump snub MORE's (R-Pa.) bill, approved in a largely party-line vote of 238-184, would require the Treasury Department to confirm that people applying for the tax credits are verified as U.S. citizens or legal residents by the Commissioner of Social Security or the Secretary of Homeland Security.

A primary way to confirm an applicant's legal status would be through Social Security numbers.

Federal law already requires an individual to be a citizen or legal resident in order to enroll in a health plan through an exchange and receive premium assistance credits, which must be verified by the Department of Health and Human Services: http://bit.ly/2tnwgjT.


GOP moderate urges bipartisan budget resolution, debt ceiling hike: Rep. Charlie Dent (R-Pa.) wants his party to team up with Democrats to pass a budget resolution and increase the debt limit before the summer recess.

The GOP centrist asked Treasury Secretary Steven Mnuchin, who has urged a speedy, clean debt ceiling hike, to take the message back to the administration.

"I will definitely take that back," Mnuchin responded.

Rep. David Price (D-N.C.) quickly seconded Dent's request.

"That's an important request and I support it wholeheartedly," he said.

The idea of partnering with Democrats on a budget is unlikely to be embraced by conservatives in the House. It would fly in the face of their efforts to link spending or regulatory reforms to the budget, a position endorsed by the conservative House Freedom Caucus. Here's more from Niv Elis: http://bit.ly/2tnAfNc.

Prominent conservatives: Extend the budget window to pass tax cuts: The leaders of two prominent conservative groups are arguing that lawmakers should lengthen the budget window from 10 years to 25 years in order to pass tax cuts.

"If Congress is serious about boosting the economy, it should pass a net tax cut within the extended 25-year budget window," Americans for Tax Reform President Grover Norquist and Club for Growth President David McIntosh said in an op-ed in Wednesday's Wall Street Journal.

"As President Trump says, 'prime the pump' now and the economy will start to flow, creating millions of jobs and more tax money for Washington," Norquist and McIntosh added.

Congressional Republicans want to pass tax-reform legislation this year through a process known as "reconciliation" in order to prevent a Democratic filibuster. But reconciliation bills cannot increase the deficit outside of the budget window, which typically is 10 years. As a result, Congress either needs to pass a deficit-neutral tax bill or pass tax cuts that are temporary. Naomi Jagoda explains: http://bit.ly/2tnuTkY.


Mnuchin will request more Treasury funding for terror unit: Treasury Secretary Steven Mnuchin on Wednesday said he would request more money for his department's unit on terror finance and financial crimes, known as TFI.

For weeks, Mnuchin has been defending deep cuts the Trump administration has proposed to programs, saying they were tough choices in a budget that prioritized hard power.

In multiple hearings, members of Congress have asked Mnuchin to defend a $7 million cut to an agency that he said takes 50 percent of his attention.

"Let me assure you, I think this is indeed the most important function we have in Treasury, or at least right up there with collecting revenues and financing our government," Mnuchin said Wednesday in response to a question from Rep. Grace Meng (D-N.Y.). http://bit.ly/2tnjPEv.


Write us with tips, suggestions and news: slane@thehill.comvneedham@thehill.comnjagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill@NJagoda and @NivElis