The Federal Reserve raised interest rates by 0.25 percentage points on Wednesday in the ninth consecutive hike since last March. From The Hill's Tobias Burns: "The move shows that the Fed's first priority remains bringing down elevated price levels, even as the bank's rate increases have strained portfolios in the banking sector, triggering some poorly managed banks to collapse." Inflation, which the Fed is trying to manage with the rate hikes, has been falling since last year, but it's still higher than the Fed's target inflation rate of 2 percent annually. Some, such as economist Paul Krugman, recently said the Fed should pause interest rate hikes amid stresses in the banking sector. "The spark was lit by the collapse of Silicon Valley Bank," Tobias wrote, "where a run by rich depositors largely from the venture capital sector led to insolvency. The bank couldn't pay depositors because their money was tied up in longer-term bonds that hadn't yet come to maturity and are sensitive to interest rate hikes." (Read the full report here) Federal Reserve Chairman Jerome Powell said Wednesday the banking system is "sound and resilient" and that mismanagement led to the collapse. "At a basic level, Silicon Valley Bank management failed badly," Powell said. "They grew the bank very quickly, they exposed the bank to significant liquidity risk and interest rate risk, they didn't hedge that risk." Powell said the latest interest rate hike was needed in light of recent inflation data. The Federal Open Market Committee unanimously approved the increase. |
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Welcome to Evening Report! I'm Amee LaTour, catching you up from the afternoon and what's coming tomorrow. Not on the list? Subscribe here. |
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No movement on indictment front |
The week so far has been full of reactions to a possible indictment of former President Donald Trump — but no actual indictment after Trump's social media post over the weekend that he expected to be arrested on Tuesday. Business Insider reported Wednesday that Manhattan District Attorney Alvin Bragg (D) cancelled the grand jury's scheduled meeting for the day. The jury for the hush money investigation typically meets Monday, Wednesday and Thursday. The Hill's Rebecca Beitsch wrote that "it's not unusual for grand juries to shift their schedules, adjusting based on witness availability or other conflicts." The delay comes after high-profile testimonies from former Trump attorney Michael Cohen, who testified last week, and attorney Bob Costello, who attempted to discredit Cohen in testimony on Monday. Trump himself has denied wrongdoing. The Hill's Zach Schonfeld has a timeline of the sprawling investigation that began under former Manhattan District Attorney Cyrus Vance Jr. (D). |
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Sens. Rick Scott, Elizabeth Warren team up on Fed oversight
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Sens. Rick Scott (R-Fla.) and Elizabeth Warren (D-Mass.) introduced a bill to require an independent inspector general to oversee the Federal Reserve Board of Governors and the Consumer Financial Protection Bureau. The inspector general would be appointed by the president and subject to Senate confirmation. There's already an inspector general for the Federal Reserve, who reports to the Fed board. Scott and Warren said a "truly independent" inspector general is needed, citing the recent bank collapses. Read more here. |
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| The opioid crisis, the pandemic and mental health. Sign up for Overnight Health Care, The Hill's daily newsletter on health policy and trends. Click here to sign up
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💰 Conservative groups opposing government-run tax prep
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A coalition of conservative groups is calling on Congress to block an Inflation Reduction Act reform to create a government-run tax preparation service. "Such a system would be an unprecedented expansion of the size and power of the IRS and should be opposed by Congress," Americans for Tax Reform and allied groups wrote. Sen. Elizabeth Warren (D-Mass.), who proposed the reform, disagrees. |
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🍎 SNAP disagreement could complicate farm bill |
Disagreement between the parties around funding and requirements for the Supplemental Nutrition Assistance Program (SNAP) may make this year's farm bill negotiations a bumpy road. "Food assistance programs make up about three-quarters of the must-pass farm bill's expenditures, which must be reconsidered and approved every five years," The Hill's Nick Roberston explained. |
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📸 Fake images of 'Trump arrest' hit internet
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Fake AI images of the former president being arrested have been circulating social media following rumors of a possible indictment. |
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"Water makes smart politics and policy" — Rep. Earl Blumenauer (D-Ore.), a senior member of the House Ways and Means Committee, ranking member of the Subcommittee on Trade and co-founder of the Global Water Security Caucus. (Read here) "Will Manhattan DA Bragg charge Trump? Should he?" — Bernard Goldberg, author of five books, former correspondent with HBO's "Real Sports with Bryant Gumbel," former reporter for CBS News and former analyst for Fox News. (Read here) |
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594 days until the presidential election. |
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10 a.m.: The House Energy and Commerce Committee holds the hearing "TikTok: How Congress Can Safeguard American Data Privacy and Protect Children from Online Harms" The House Budget Committee holds a hearing on the president's 2024 budget request. |
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There a story you think should be getting more attention? Something people should be talking about? Drop me a line: alatour@thehill.com | |
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