Happy Thursday and welcome back to On The Money, where we would like to congratulate any devoted gamers who read this newsletter. 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–Republicans expect Trump to pull controversial Fed nominee: Senate Republican sources expect President Trump to withdraw his nomination of Judy Shelton to serve on the Federal Reserve Board following bipartisan resistance on Capitol Hill.
The White House has not made a final decision, since Trump would first need to sign off on the reversal, but Republican sources say it would be “desirable” for her to withdraw from consideration and that her nomination is “trending” in that direction.
“She’s being pulled,” said a Republican senator. The Hill’s Alexander Bolton and I explain why here.
So, what happened? Shelton’s nomination ignited a firestorm of controversy among economists and Fedwatchers across the ideological spectrum. Her confirmation hearing was expected to be tense, and Shelton’s only path to securing confirmation was soothing the concerns of the Republicans who determined her fate.
- Asked to rate Shelton’s performance Thursday, Sen. Richard Shelby (R-Ala.), a senior member of the Banking Committee, replied tersely: “She performed,” adding, “I think the Fed should be independent and we should have mainstream people on there, and I don’t think she’s a mainstream economist.”
- Sen. Pat Toomey (R-Pa.) took issue with Shelton’s call to cut Fed rates to keep the dollar even with weaker countries, saying “That’s a very, very dangerous path to go down. This beggar-thy-neighbor mutual currency devaluation is not in our interest.”
- Sen. John Kennedy (R-La.) told reporters after the hearing that “nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas. Now I’m not saying that’s the case here, but that was the dialectic going on.”
What comes next: The next step in Shelton’s confirmation process would be a vote by the Senate Banking Committee to recommend her nominations. Democrats are expected to unanimously oppose her, which means just two Republican votes against her will sink her nomination.
It’s unclear if she will make it to this point given how many committee Republicans are concerned about her nomination. And even if she gets voted through the committee, she could end up like former Carnegie Mellon economics professor Marvin Goodfriend.
Trump nominated Goodfriend to the Fed in 2017 and the Senate Banking Committee still sent his nomination to the floor despite a rough confirmation hearing. But GOP opposition prevented the Senate from holding a confirmation vote, which allowed his nomination to lapse in 2018.
Thursday, February 20th: Building the Dream: Charlotte
The Hill will be in Charlotte, N.C. on Thursday, February 20th. Our editors will sit down with Charlotte Mayor Vi Lyles, Rep. Alma Adams (D-N.C.), State Sen. Paul Newton (R) and others to discuss financial hurdles to homeownership. Join us live in Charlotte or join the livestream.
LEADING THE DAY
Trump extends emergency declaration at border with plan to send $3.8B to wall: President Trump on Thursday renewed a state of emergency he declared on the Southern border, which he has used to reprogram billions of dollars to building his border wall.
“The ongoing border security and humanitarian crisis at the southern border of the United States continues to threaten our national security, including the security of the American people,” he wrote in a notice to Congress.
The notice comes just hours after reports surfaced that the Pentagon was moving an additional $3.8 billion in defense funds toward building the wall. Those funds came from aircraft, ship-building and National Guard funds.
The Hill’s Niv Elis tells us more about the declaration here, and Rebecca Kheel and Niv explain where Trump is getting the money–and who is losing it.
The background:
- Trump officially declared the emergency on Feb. 15 last year after a five-week government shutdown — the longest in the nation’s history — failed to convince Congress to fund the wall to his satisfaction.
- The emergency powers allowed Trump to reprogram funds from military construction and other defense funds, but were set to expire on Saturday. Trump’s notice will extend the powers for another year.
Trump administration delays Huawei penalty for a fourth time: The Trump administration is delaying a deadline for U.S. businesses to cut ties with Chinese telecommunications giant Huawei for the fourth time, the Department of Commerce announced Thursday.
Huawei was granted a temporary license to keep working with American companies for 45 days. Huawei was originally added to the list – which is seen a death sentence for foreign companies – because the U.S. government deemed it a national security risk.
Thursday marked the fourth time the administration has extended the deadline since Huawei was added to the Commerce Department’s “entity list” in May 2019. The Hill’s Chris Mills Rodrigo breaks it down for us here.
GOOD TO KNOW
- Sen. Pat Toomey (R-Pa.) is introducing legislation to make permanent a policy in President Trump’s tax-cut law aimed at boosting business investment.
- Wells Fargo will no longer require employees who experience sexual harassment on the job to litigate their claims in private arbitration, the company announced Thursday.
- Barclays CEO Jes Staley is reportedly under investigation by the U.K.’s Financial Conduct Authority (FCA) over his past relationship with Jeffrey Epstein, which Staley says ended before he took control of the bank in 2015, according to The Wall Street Journal.