Happy Wednesday and welcome back to On The Money, where we’re fascinated by all of this. 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.
Write us with tips, suggestions and news: slane@digital-release.thehill.com, njagoda@digital-release.thehill.com and nelis@digital-release.thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.
THE BIG DEAL–Coronavirus complicates Fed decision on rates: The spread of the coronavirus is posing a dire challenge to the Federal Reserve as it seeks to keep the economy stable and defend its independence from President Trump’s attacks.
The Fed has indicated a desire to keep interest rates steady this election year after navigating both a trade war and a global downturn in 2019. But, even as bank officials say it is too soon to react to the outbreak, that stance is being put to the test.
- U.S. financial markets are now betting on an interest rate cut after the two-day Wall Street rout obliterated six weeks of stock gains amid coronavirus fears.
- The Dow Jones Industrial Average closed with a loss of 879 points, or 3.2 percent, on Tuesday, while the S&P 500 and Nasdaq composite fell 3 percent and 2.8 percent, respectively. Tuesday’s plunge followed a Monday loss of 1,031 points, or 3.6 percent, its worst day since February 2018. On Wednesday, though stocks were mixed, with the Dow down 124 points, the S&P down 0.4 percent and Nasdaq up 0.2 percent.
Several members of the Federal Open Markets Committee, which sets Fed interest rates, have spoken out against cutting rates over the past four days, even as confirmed cases topped 80,000 amid new breakouts in Italy and a sharp increase in cases in South Korea.
But the economic toll of a prolonged outbreak also raises the risk of Trump’s ire as he seeks reelection on the strength of the economy. I explain why here.
ON TAP TOMORROW
- The House Financial Services Committee holds a markup of pending legislation, 9:30 a.m.
LEADING THE DAY
Schumer requesting $8.5 billion in emergency funding on coronavirus: Senate Minority Leader Charles Schumer (D-N.Y.) is requesting $8.5 billion in emergency funding to combat the coronavirus.
Schumer unveiled the details of his funding request, which he also sent to the Appropriations Committee, arguing that Congress “must act swiftly” to confront the virus.
“This proposal brings desperately-needed resources to the global fight against coronavirus. Americans need to know that their government is prepared to handle the situation before coronavirus spreads to our communities. I urge the Congress to move quickly on this proposal. Time is of the essence,” Schumer said in a statement on Wednesday.
- The spending request is more than three times the $2.5 billion requested by the Trump administration.
- Trump’s request included $1.25 billion in new funding, with the rest to be taken from existing health programs, including $535 million from fighting Ebola.
Democrats introduce bill to reverse Trump’s shift of military money toward wall: Senate Democrats on Wednesday introduced legislation to reverse President Trump’s decision to shift billions in military funding toward the U.S.-Mexico border wall and place new limitations on the Pentagon’s transfer authority.
- The bill would restore the $3.8 billion the Pentagon announced earlier this month that it would shift from various weapons programs to help build about 177 miles of border fencing back to the military accounts.
- The bill would also cut the amount of money the Pentagon would have the ability to transfer going forward, in an attempt to prevent the administration from leveraging military funding in the future.
- According to the text of the legislation, it would cut the Pentagon’s general transfer authority from $ 4 billion to $1.798 billion. It would also limit the amount of money that could be transferred from a war fund from $2 billion to $371 million.
GAO report details challenges of implementing Trump tax law: The Government Accountability Office (GAO), a watchdog that provides information to Congress, released a report this week that detailed some of the challenges relating to the IRS’s implementation of President Trump’s tax-cut law.
The report came at the request of Senate Finance Committee ranking member Ron Wyden (D-Ore.), who had asked the watchdog to review the implementation of the tax law’s business and international provisions.
The Hill’s Naomi Jagoda walks us through the report here.
GOOD TO KNOW
- Fewer than 1 in 5 Americans fear foreign trade as an economic threat, according to a Gallup poll released Wednesday.
- House lawmakers on Wednesday grilled executives at some of the country’s top online ticketing companies, including Ticketmaster and StubHub, over the industry’s practices.
- Politico: “The White House’s director of trade and manufacturing policy and the administration’s other China hawks are pushing to use the coronavirus crisis to press U.S. companies to end their dependence on foreign suppliers.”
- Morning Consult: 69 percent of Americans are concerned about the potential impact of the coronavirus on the U.S. economy, according to a poll conducted between Feb. 24 and 26, up from 55 percent two weeks ago.