Overnight Finance: New Mueller charges against Manafort, Gates | Fed official says bank should hike rates despite lagging inflation | FBI warns of tax season phishing schemes

Happy Thursday and welcome back to Overnight Finance, where we swear we don’t have any shell companies in Cyprus. 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@digital-release.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

THE BIG DEAL: Paul Manafort and Rick Gates were charged Thursday with 32 counts of bank fraud, tax evasion and failing to disclose a dizzying array of foreign companies and holdings.

A federal court in Virginia on Thursday returned a 32-count superseding indictment charging Manafort and Gates through Special Counsel Robert Mueller’s wide-ranging investigation.

Here’s a rundown of what Manafort and Gates allegedly did according to investagators:

• “Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work,” the indictment says. “From approximately 2006 through the present, Manafort and Gates engaged in a scheme to hide income from United States authorities, while enjoying the use of the money.”

• How much money are we talking here? Prosecutors allege that more than $75 million flowed through Manafort’s and Gates’s offshore accounts. Manafort is accused of laundering more than $30 million that he concealed from the Treasury Department with Gates’s help. The indictment says Gates obtained more than $3 million from the offshore accounts that he concealed from the government.

• And what did they allegedly do with it? Manafort allegedly used the money to support what the indictment describes as a “lavish” lifestyle in the U.S., including purchasing multimillion-dollar real estate properties and other luxury goods. Gates allegedly used the funds to pay for his children’s tuition, interior decorating and to finance his home in Virginia.

The Hill’s Morgan Chalfant and Jacqueline Thompson have everything you need to know covered here.

LEADING THE DAY

Rate, rate don’t tell me: Randal Quarles, the Federal Reserve’s vice chairman of supervision, said Thursday that the central bank should move ahead with a projected interest rate hike even if inflation lags below target levels.

Quarles, the first Fed governor appointed by President Trump, said the bank shouldn’t let what he considers temporary factors suppressing inflation affect monetary policy.

“The current shortfall in inflation from target [is] most likely due to transitory factors that will fade through 2018, pushing inflation back up to target,” Quarles said Thursday in Tokyo.

“Suffice to say, a deviation from our target of a few tenths of 1 percentage point, especially one I expect to fade, does not cause me great concern.”

• So what? The Fed is aiming to bring interest rates, currently set at a 1.25 percent to 1.5 percent range, back up to the historic neutral level. Rising interest rates would increase the cost of borrowing, which investors worry could tamper the torrid stock market that marked Trump’s first year in office. Unemployment and wage growth has been better than what analysts initially projected for 2018. The uptick in economic activity has raised concerns on Wall Street that the Fed would hike rates more than three times, a bigger increase than what the bank has forecasted for 2018.

• What happens next: The Fed will almost certainly raise interest rates at its March meeting. Minutes from the Fed’s Jan. 30-31 meeting released Wednesday showed that the bank expects the economy to grow well enough to support its forecast of three rate hikes in 2018. Fed officials cited the unexpected size of increases in key metrics and economic stimulation from the GOP tax-cut bill.

Protect your check: Federal officials are warning of a spike in phishing campaigns during the IRS’s tax filing season, particularly those targeting information from would-be victims’ W-2 forms.

The FBI’s Internet Crime Complaint Center issued an alert late Wednesday warning of an increase in W-2 phishing campaigns.

“This scam is just one of several new variations of IRS and tax-related phishing campaigns targeting W-2 information, indicating an increase in the interest of criminals in sensitive tax information,” the alert says.

Where’s the undo button? The National Association of State Treasurers (NAST) is urging Congress to reinstate a tax preference that was eliminated in the GOP tax-cut law, arguing that doing so would help state and local governments finance infrastructure projects.

The group wants Congress to restore the tax exemption for advance refunding bonds, which state and local governments issue to refinance their debt. The Hill’s Naomi Jagoda explains: http://bit.ly/2CcEbsv.

MARKET CHECK: Disparate. The three big U.S. indexes had weirdly mixed days. The Dow Jones industrial average was Thursday’s winner, closing with a 0.7 percent gain (164 points). The S&P 500 finished 0.1 percent higher, while the Nasdaq closed with a 0.1 percent loss.

GOOD TO KNOW

• Mortgage lenders that exclusively use online applications approve loans quicker, experience fewer defaults, encourage more refinancing and respond to demand shifts better than brick-and-mortar rivals, according to a New York Fed report released Thursday.

• The Federal Communications Commission’s (FCC) order repealing net neutrality was published in the Federal Register Thursday morning, opening the door for supporters of the Obama-era rules to launch legislative and legal challenges.

• First National Bank of Omaha said Thursday that it would end its business relationship with the National Rifle Association (NRA) after feedback from customers.

• BlackRock, the world’s largest asset manager, says it plans to speak with gun makers after a wave of public outcry sparked by the Florida school shooting last week, according to CNBC.

ODDS AND ENDS

• In one tweet, Kylie Jenner wiped out $1.3 billion of Snap’s market value

• Michael Dell paid a record $100.47 million for Manhattan’s One57 penthouse, the most expensive home ever sold in New York