Happy Wednesday and welcome back to Overnight Finance, the newsletter that is one-thousandth the length of the omnibus and 1 million times more timely. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL: We're still not sure when we're going to see a vote on a bill to keep the government open past Friday. After a week of teasing the release of an omnibus spending package, lawmakers still have not unveiled the funding bill.
Congressional leaders spent Wednesday insisting they'd "soon" release the bill to fund the government through the rest of 2018. But that bill hasn't been revealed yet, and negotiators are still squabbling over a slew of policy riders that could cost support from either side. Both sides though are publicly optimistic.
"We're finalizing the details and I feel like we're in a very good place," Speaker Paul RyanPaul Davis RyanFormer Sen. Bob Dole dies at 98 No time for the timid: The dual threats of progressives and Trump Juan Williams: Pelosi shows her power MORE (R-Wis.) said this morning as he left his Capitol office after meeting with the other top leaders of both parties.
Emerging from the meeting moments before, Senate Minority Leader Charles SchumerChuck SchumerHospitals in underserved communities face huge cuts in reckless 'Build Back Better' plan GOP infighting takes stupid to a whole new level Progressive groups urge Schumer to prevent further cuts to T plan MORE (D-N.Y.) said a deal is imminent.
"We're feeling very good about this," Schumer said. "We've accomplished many, many, many of our goals. When it's unveiled, you will see. We're not going to get into any more details."
The funding measure will likely pass Congress over the objections of hardliners in both parties.
White House on board. And President TrumpDonald TrumpBiden heading to Kansas City to promote infrastructure package Trump calls Milley a 'f---ing idiot' over Afghanistan withdrawal First rally for far-right French candidate Zemmour prompts protests, violence MORE threw his support behind the $1.3 trillion spending bill, defying House conservatives and handing a victory to GOP congressional leaders.
The White House announced Trump's backing after he discussed the proposed deal with Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellLawmakers remember Bob Dole: 'Bona fide American hero' Senate leaders face pushback on tying debt fight to defense bill Former Sen. Bob Dole dies at 98 MORE (R-Ky.).
"The president and the leaders discussed their support for the bill, which includes more funds to rebuild the military, such as the largest pay raise for our troops in a decade, more than 100 miles of new construction for the border wall and other key domestic priorities, like combatting the opioid crisis and rebuilding our nation's infrastructure," White House press secretary Sarah Huckabee Sanders said in a statement.
What we know about the funding bill:
- A massive rail project in the New York metro region is expected to receive up to $541 million in federal funding despite President Trump's objections.
- Congressional leaders have agreed to strengthen background checks for gun purchases through the bill by adding the bipartisan Fix NICS (National Instant Criminal Background System) Act, which would encourage states to report more frequently to the current criminal database.
- Republican leaders have agreed to include a provision clarifying that the Centers for Disease Control and Prevention (CDC) is not barred from conducting gun violence research under a 1996 amendment.
- The bill is expected to include $641 million for 33 miles of new border fencing, and $1.296 billion in funding new border technology such as levees and fences, not a concrete wall. Trump hoped to win $25 billion in money that could be put in a trust for the wall.
- It could add $2.8 billion in funding to address the opioid epidemic, directed both at substance abuse programs and National Institutes of Health research, plus some $687 million in new funding to secure U.S. elections and combat Russian cyberattacks.
What comes next: The House won't have a whole lot of time to read the funding bill after it's released, whenever that might be. Expect the House to vote soon after we see the bill, despite that face that lawmakers won't have had much time to weed through the hundreds of pages of details.
The Senate could face problems passing the bill if Sen. Rand PaulRandal (Rand) Howard PaulRand Paul: Chris Cuomo firing 'a small step toward CNN regaining any credibility' GOP anger with Fauci rises Congress's goal in December: Avoid shutdown and default MORE (R-Ky.) decides again to hold up an agreement to speed up votes. His sole objections to such an agreement in February triggered a brief lapse in government funding and invited anger from dozens of furious colleagues weary from an all-nighter.
"It's a good thing we have Republican control of Congress or the Democrats might bust the budget caps, fund planned parenthood and Obamacare, and sneak gun control without due process into an Omni...wait, what?" Paul tweeted this afternoon.
Classic Kennedy: Sen. John KennedyJohn Neely KennedyMORE (R-La.), a freshman senator known for his colorful quotes, tore into the funding bill and the process congressional leaders used to throw it together. The Hill's Niv Elis was there to capture it all in a thread you cannot miss.
"As bad as this stuff looks from the outside, you oughta see it from the inside. Everybody who participates in this process oughta put a bag on their head," Kennedy said. "I know I'm new, but I'm not stupid. And I'm really disgusted."
While Kennedy's lively analysis is good for a few chuckles, it also addresses a serious problem Congress has been incapable of fixing. For years, the government has been funded through a series of deadline-fueled temporary agreements and massive last-second deals that lawmakers have virtually no time to analyze. Leaders have pledged to restore Congress to a more stable funding process, but have been unsuccessful.
LEADING THE DAY
Fed raises rates for the first time under Powell: The Federal Reserve on Wednesday raised interest rates by 0.25 points, the first increase under new Chairman Jerome Powell.
The Fed raised the federal funds rate to a 1.5-1.75 percent target range after months of data showing a strong economy. A March rate hike had been widely expected as unemployment nears record lows and economic growth is expected to pick up in 2018.
Under Powell's predecessor, Janet YellenJanet Louise YellenSenate leaders face pushback on tying debt fight to defense bill Treasury refrains from naming any currency manipulators US could default within weeks absent action on debt limit: analysis MORE, the Fed projected three interest rate hikes in 2018. Powell voted in lockstep with Yellen since joining the Fed, and is expected to follow a similar path.
Fed officials on Wednesday projected a 2.1 percent median interest rate by year's end, unchanged from December. While the Fed on the whole is forecasting another two rate hikes, in line with December's projection, some officials projected a fourth 2018 rate hike this month. Seven Fed board members predicted three or more additional rate hikes, while 8 officials projected two or fewer.
The Fed upgraded its outlook for the economy, which the bank said "strengthened in recent months," and said inflation is "expected to move up in coming months."
Here's my recap of the announcement and Powell's presser, and below are a few of his answers on questions regarding other economic issues.
- Tariffs: Powell declined to say much on President Trump's proposed tariffs on steel and aluminum or the impact that retaliation could have on the U.S economy. The chairman said "there's no thought that changes in trade policy should have [an] effect on the current outlook" but noted that businesses have "reported that trade policy has become a concern going forward."
- Bank regulation: Powell says the Fed hasn't made decisions about how it would apply the Senate's bipartisan Dodd-Frank rollback bill to the frequency of stress tests for banks that are beyond the systemically important financial institution threshold. The bill, currently frozen up in the House by GOP leaders, would free banks with less than $250 billion in assets from yearly Fed stress tests. Powell said last month that the Fed wouldn't hesitate to keep tough oversight of banks below that threshold if need be.
- Trump's influence: Powell waved off a question about whether he fears raising interest rates could harm GOP candidates' chances in the midterm election, and whether he feels pressure from Trump to keep rates low. "No, that doesn't keep me awake at night," Powell said.
Industries unite in battle against Trump's tariffs: Powerful business groups are mobilizing their forces, urging President Trump to stop a wave of sweeping tariffs they worry will hurt the U.S. economy and start a global trade war.
Trump's decision to levy far-reaching tariffs has prompted business groups to form alliances in the hopes of persuading the president and lawmakers on Capitol Hill to curtail or kill the proposed trade moves.
Business leaders have expressed growing concerns not only about Trump's decision to slap tariffs of 25 percent on steel imports and 10 percent on aluminum imports, but the likelihood that the president will announce this week upward of $60 billion in tariffs on imports from China to punish Beijing for lax intellectual property protection practices. The Hill's Vicki Needham reports.
Hensarling huddles with lobbyists to push for changes to Dodd-Frank rollback: House Financial Services Committee Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingLawmakers battle over future of Ex-Im Bank House passes Ex-Im Bank reboot bill opposed by White House, McConnell Has Congress lost the ability or the will to pass a unanimous bipartisan small business bill? MORE privately urged bank lobbyists in a weekend meeting to push Senate Democrats to agree to amending their bipartisan bill to rein in Dodd-Frank, Reuters reported.
Speaker Paul Ryan (R-Wis.) has vowed to freeze the Senate bill to loosen banking regulations until senators agree to negotiate changes. But Senate Democrats who spent years working on the measure have ruled out amending it. They say House Republicans should quickly pass the bill, calling it the most sweeping revamp of Dodd-Frank to ever earn bipartisan support.
Here's more from me on that battle from this weekend.
MARKET CHECK: Rocky. U.S stocks took slight losses Wednesday, dipping slightly after the Fed announcement. The Dow Jones Industrial Average and Standard and Poor's 500 index fell 0.18 percent each, while the Nasdaq dropped 0.26 percent.
GOOD TO KNOW
- The New York Times looks at the potential causes of the next financial crisis.
- Citigroup Inc. said Chief Executive Officer Michael Corbat was unaware that the bank was in the process of closing a real estate loan to a Kushner Cos. venture when he met with Jared KushnerJared Corey KushnerBiden celebrates start of Hanukkah Kushner looking to Middle East for investors in new firm: report Watchdog finds no money has flowed out of agency tasked by Trump admin to fight pandemic MORE, according to Bloomberg News.
- Russian officials, with President Vladimir Putin's approval, helped Venezuela develop its cryptocurrency, the petro, to help the country avoid U.S. sanctions, reports Time.
- What the Federal Reserve rate hike means for U.S. households, from Reuters.
ODDS AND ENDS
- Cryptocurrency investors are struggling to figure out what they owe in taxes ahead of the filing deadline.