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.

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.

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

ADVERTISEMENT

 

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:

ADVERTISEMENT
  • 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 CruzDemocrats question fairness of Senate trial after Graham, McConnell statements Sunday shows - Republicans, Democrats maneuver ahead of House impeachment vote Cruz says he intends to 'fully' follow impeachment oath MORE (R-Texas) and Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezDemocrats ask if they have reason to worry about UK result Sanders, Ocasio-Cortez to hold campaign rallies in Los Angeles, Las Vegas Overwhelming majority say social media companies have too much influence: poll 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 WydenAdvocates call for ObamaCare open enrollment extension after website glitches Trump-Pelosi trade deal creates strife among progressives The Hill's Morning Report — Sponsored by AdvaMed — House panel delays impeachment vote until Friday MORE (Ore.), Republican Reps. Mike GallagherMichael (Mike) John GallagherImpeachment surprise: Bills Congress could actually pass in 2020 Statesmen seek bipartisan solutions to big challenges Colorado rep planning sunrise run to possible sites for military memorial MORE (Wis.) and Jim Banks (Ind.), and GOP Sens. Tom CottonThomas (Tom) Bryant CottonTikTok chief cancels Capitol Hill meetings, inflaming tensions Lawsuits pose new challenge for TikTok TikTok's leader to meet with lawmakers next week MORE (Ark.), and Ben SasseBenjamin (Ben) Eric SasseSenators zero in on shadowy court at center of IG report Live coverage: DOJ inspector general testifies on Capitol Hill FCC votes to bar use of its funds to purchase Huawei, ZTE equipment 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