On The Money: Fed officials saw rising risk of recession | Ocasio-Cortez, Cruz blast NBA for 'outrageous' response to China | Prospects dim for trade breakthrough with China

On The Money: Fed officials saw rising risk of recession | Ocasio-Cortez, Cruz blast NBA for 'outrageous' response to China | Prospects dim for trade breakthrough with China
© Greg Nash

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

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THE BIG DEAL--Fed officials saw rising risk of recession at last meeting: Federal Reserve officials expressed concerns that the odds of a recession have "increased notably" due to a slowdown in global growth and the fallout from rising trade and geopolitical tensions, according to minutes from the bank's September meeting released Wednesday.

Members of the Fed's policy-setting Federal Open Markets Committee (FOMC) said that while the U.S. economy on the whole remained solid, the risks of a downturn had risen steadily since the panel's meeting in July, according to the minutes from their Sept. 17-18 meeting.

I explain why here.

 

What happened:

  • The FOMC voted 7-3 on Sept. 18 to cut interest rates by 0.25 percentage points, a move Fed Chairman Jerome Powell described as "a step to help keep the U.S. economy strong in the face of some notable developments and to provide insurance against ongoing risks."
  • But minutes from the preceding FOMC meeting detailed the extent of the Fed's growing concern about a stable but slowing U.S. economy.
  • Several officials noted that "statistical models designed to gauge the probability of recession" had "suggested that the likelihood of a recession occurring over the medium term had increased notably in recent months."

 

The background: 

  • Fed officials noted that those factors "could give rise to slower hiring, a development that would likely weigh on consumption and the overall economic outlook."

 

The bright side: Fed officials said that unusually low differences between interest rates for long-term and short-term bonds could skew the recession signals, and unemployment ended up dropping to 3.5 percent last month without the labor pool shrinking.  

 

LEADING THE DAY

Prospects dim for breakthrough in Trump's trade war with China: The odds of a breakthrough in upcoming trade talks with China took a turn for the worse this week after the Trump administration imposed a slew of new sanctions on Beijing over alleged human rights abuses.

  • The Department of Commerce on Monday night added 28 Chinese companies allegedly involved in the persecution of Uyghurs and other Muslim minority groups to a list of banned entities, blocking them from buying U.S. products.

The ratcheting up of tensions between the world's two largest economies came as Washington prepares to host a Chinese trade delegation led by Vice Premier Liu He on Thursday to revive trade talks. The Hill's Niv Elis explains why that might be difficult now.

 

In other news involving U.S-China tensions: A bipartisan group of eight lawmakers fiercely criticized the NBA in a Wednesday letter to commissioner Adam Silver, demanding the league scale back its operations in China and take a stronger stand against Chinese government pressure.

The ideologically diverse coalition of lawmakers -- including Sen. Ted CruzRafael (Ted) Edward CruzPartisan squabbles endanger congressional response to Trump's course on Syria Trump urged to hire chief strategist for impeachment fight The Hill's Morning Report - Presented by Better Medicare Alliance - Trump's impeachment plea to Republicans MORE (R-Texas) and Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezTlaib to join Sanders at campaign rally in Detroit AOC: Trump comparing impeachment inquiry to a lynching is 'atrocious' Former Obama official pushes back against assertion of unfair Sanders media coverage MORE (D-N.Y.) -- blasted Silver for the NBA's initial response to China after the Houston Rockets' general manager expressed support for demonstrators in Hong Kong.

"It is outrageous that the Chinese Communist Party is using its economic power to suppress the speech of Americans inside the United States," wrote the lawmakers. "It is also outrageous that the NBA has caved to Chinese government demands for contrition."

Joining Cruz and Ocasio-Cortez on the letter were Democratic Rep. Tom Malinowksi (N.J.) and Sen. Ron WydenRonald (Ron) Lee WydenHouse passes bill taking aim at anonymous shell companies Senate Democrats to force vote Wednesday to overturn IRS rules on SALT deduction cap Hillicon Valley: Facebook removes Russian, Iranian accounts trying to interfere in 2020 | Zuckerberg on public relations blitz | Uncertainty over Huawei ban one month out MORE (Ore.), Republican Reps. Mike GallagherMichael (Mike) John GallagherHillicon Valley: GOP lawmakers offer election security measure | FTC Dem worries government is 'captured' by Big Tech | Lawmakers condemn Apple over Hong Kong censorship Lawmakers condemn Apple, Activision Blizzard over censorship of Hong Kong protesters On The Money: Fed officials saw rising risk of recession | Ocasio-Cortez, Cruz blast NBA for 'outrageous' response to China | Prospects dim for trade breakthrough with China MORE (Wis.) and Jim Banks (Ind.), and GOP Sens. Tom CottonThomas (Tom) Bryant CottonHillicon Valley: GOP lawmakers offer election security measure | FTC Dem worries government is 'captured' by Big Tech | Lawmakers condemn Apple over Hong Kong censorship Lawmakers condemn Apple, Activision Blizzard over censorship of Hong Kong protesters Lawmakers set to host fundraisers focused on Nats' World Series trip MORE (Ark.), and Ben SasseBenjamin (Ben) Eric Sasse NBA commissioner says China asked league to fire Rocket's GM Lawmakers set to host fundraisers focused on Nats' World Series trip Hong Kong protesters trample, burn LeBron James jerseys in wake of comments MORE (Neb.), who co-led the letter with Malinowski and Gallagher. 

 

GOOD TO KNOW

  • A bipartisan Senate duo asked the Treasury Department on Tuesday to investigate a scandal-ridden Brazilian corporation's rapid expansion into the U.S. meat processing industry.
  • Reuters: "U.S. job openings fell to a 1-1/2-year low in August and hiring declined, suggesting employment growth was slowing largely because of ebbing demand for labor as the economy loses momentum."
  • ProPublica: "IRS-Funded Review Confirms TurboTax Hid Free Filing From Search Engines, but Says There's No Need for Major Changes"

 

ODDS AND ENDS