Overnight Finance

On The Money: Appeals court clears way for Congress to seek Trump financial records | Fed chief urges Congress to boost US workforce | Federal deficit hits $134 billion in one month | China talks hit snag over agricultural purchases

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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BREAKING: The federal appeals court in Washington, D.C., on Wednesday ruled that House Democrats' can obtain President Trump's financial records, setting up a potential Supreme Court challenge.

The D.C. Circuit Court judges declined a request from Trump to have the court's full bench of judges hear the case after a three-judge panel in October denied Trump's request to shield his longtime accounting firm Mazars from having to comply with lawmakers' subpoena for records.

The ruling does not mean that Democrats will immediately have access to Trump's records. Trump lawyers have already indicated they would appeal to the Supreme Court.

The case involves a House Oversight Committee subpoena for records from Mazars.

Click here for more on this developing story.


Now for the rest of the day's news...


THE BIG DEAL--Fed chief urges Congress to expand US workforce while economy still strong: Federal Reserve Chairman Jerome Powell urged lawmakers Wednesday to target long-term threats facing the U.S. economy while the country still enjoys a record stretch of prosperity. 

In a Wednesday hearing, Powell called on Congress to bring more workers into the U.S. labor market and boost their flagging productivity before the American workforce atrophies under global pressure.

"The outlook is good," Powell told the Joint Economic Committee on Wednesday, citing unemployment near 50-year lows, inflation "low and under control" and high consumer confidence.

But Powell added that Congress must act to boost the U.S. labor force participation rate of 62.3 percent and productivity, explaining that low interest rates could only do so much.

"It's more about fiscal policies that support a passion for the labor force," Powell added, citing measures to expand skills training, curb opioid abuse and expand internships to low-income areas. I've got more on his testimony here.


The context: Powell's appearance marked his first comments since the Fed's October interest rate cut and came amid a confounding time for the U.S. economy. 

  • A sharp global economic slowdown, widespread geopolitical unrest and rising trade tensions have weighed heavily on U.S. businesses, factories and exporters. 
  • But the U.S. economy has remained resilient in the face of global pressure, supporting a 3.6 percent unemployment rate with inflation below the Fed's target and steady expansion.
  • The Fed has slashed interest rates in three consecutive meetings this year, following four hikes in 2018, as recession fears rose throughout the year.


The rate path: Powell said Wednesday that the Fed would likely keep interest rates steady unless the state of the economy deteriorated or new risks emerged.

That's likely to frustrate President Trump, who has tried to bully the central bank into cutting interest rates to zero percent or below.

  • The president has demanded Powell act to match negative interest rates seen in countries facing severe economic downturns, claiming the Fed puts the U.S. at a "competitive disadvantage."
  • Falling interest rates reduce the value of the U.S. dollar, which makes American goods relatively cheaper in foreign markets.
  • Powell refrained from commenting on Trump's attacks or trade policy before Congress on Wednesday, but the chairman stressed that negative interest rates would not make sense while the economy is expanding.


The markets: Powell's testimony came on an eventful day in Washington, as House Democrats opened their first public impeachment hearings across the Capitol. But neither Powell's testimony nor the televised hearings appeared to move markets significantly on Wednesday. The Dow Jones Industrial Average ticked 92 points higher to a new record high, while the S&P 500 inched up less than 0.1 percent and the Nasdaq down less than 0.1 percent.



  • The Senate Small Business Committee holds a hearing on noncompete agreements, 10 a.m.
  • Federal Reserve Chairman Jerome Powell testifies before the House Budget Committee on the economic outlook, 11 a.m.
  • The House Small Business Committee holds a hearing entitled "A Fair Playing Field? Investigating Big Tech's Impact on Small Business," 2 p.m.



Federal deficit hits $134 billion in one month: The federal deficit reached $134 billion in October, the first month of fiscal 2020, according to data the Treasury Department released Wednesday.

That figure is about 34 percent higher than last October, a sign of a steadily increasing gap between federal spending and revenue.

As a candidate, President Trump had promised to wipe out the nation's deficit during his time in office, but deficits have only grown since his inauguration.

The Treasury estimated that the deficit for the 2020 fiscal year would surpass $1 trillion for the first time since 2012. The figure came in just below that milestone in fiscal 2019, hitting $984 billion. The Hill's Niv Elis breaks down the data here. 


China trade talks hit snag over farm purchases: U.S. trade talks with China have hit a snag over Beijing's reluctance to increase its purchases of U.S. agriculture products, The Wall Street Journal reported on Wednesday.

President Trump announced last month that the U.S. and China had agreed on a "phase 1" deal to scale back the trade war that's been raging since last summer, but the final details have proven difficult to finalize.

Trump had originally said that China had agreed to but between $40 billion and 50 billion in agricultural products from the United States over two years, but China is reportedly reticent to write a full amount into the deal.

Similar disagreements have scuttled trade talks in the past.

The Journal also reported that China was objecting to tighter provisions on technology transfer and an enforcement mechanism.



  • President Trump on Tuesday falsely claimed that Ivanka Trump, his daughter and a senior White House adviser, had created 14 million jobs, more than double the amount of positions created in his entire presidency.
  • Politico: "Legislation that Rep. Chuy García (D-Ill.) plans to introduce this week would close off avenues for technology giants to enter the financial services industry, a plan that's beginning to draw praise from bank lobbyists looking for ways to fend off a competitive threat from Silicon Valley."
  • Sen. Tim Scott (R-S.C.) on Wednesday blasted legislation from Democrats to impose guardrails on the "opportunity zone" program created by President Trump's 2017 tax law, arguing that the legislation would make the incentive less effective.



  • The chairman of the House Judiciary Committee's panel on antitrust on Wednesday pressed top officials at the Justice Department and Federal Trade Commission over Google's proposed acquisition of fitness tracking company Fitbit.