| Happy Monday and welcome back to Overnight Finance, where we're changing party rules to become your go-to-newsletter for life. 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@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: Federal Reserve Chairman Jerome Powell is appearing before Congress on Tuesday for the first time since taking the reins of the central bank. He'll testify before the House Financial Services Committee to review the Fed's first monetary policy report of 2018. Powell's appearance comes as Fed observers try to predict how the bank will act on interest rates this year, and the direction it sees the economy going. Here are the main areas where lawmakers will press Powell for answers: The impact of the Trump agenda: The U.S. economy is the best it's been in nearly a decade, with the labor market at nearly full employment and inflation sticking below average levels. Recent efforts by the Trump administration to cut taxes and regulations are likely to spur more growth, economists say, pushing the economy toward 3 percent growth. But the $1.5-trillion tax cut and a $300-billion increase in budget caps threatens to balloon the already enormous $20 trillion federal debt. Powell will likely be asked how much he expects the Trump agenda to benefit the economy, and what the long term implications could be for the debt. Interest rates: The U.S. is near full employment and the tight labor market is finally starting to drive up wage growth and prices. The Fed is aiming to raise rates quickly enough to prevent the economy from overheating without short-circuiting the financial markets. 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 wage growth and stimulus from the GOP tax cut law. But investors fear that low unemployment, increasing price growth and rising wages will spur the Fed to raise interest rates, which would boost the cost of borrowing money, more than three times. Lawmakers will try to pin down Powell on his plans. Inflation: A key element in whether the Fed raises rates more than three times is where inflation goes from here. The Fed considers a 2-percent annual increase in the personal consumption price index to be the ideal level of inflation to maintain a steadily growing economy. Inflation has lingered below that level, though the Bureau of Labor Statistics Consumer Price Index showed a 2.1 percent increase over the past 12 months. Fed officials seem confident that inflation will catch up to tightness in the labor market. Powell could expand on what to expect from the Fed. Financial rules: Powell will likely be asked about the Fed's efforts to loosen aspects of Dodd-Frank that critics of the law say put unnecessary restrictions on smaller banks. He's supported reducing the frequency of federal stress tests, adjusting the level at which a bank is deemed systemically important, and narrowing the scope of the Volcker Rule on proprietary trading. ON TAP TOMORROW - Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee, 10 a.m.
- The Federal Deposit Insurance Corporation announces fourth quarter 2017 bank earnings, 10:30 a.m.
- Former Federal Reserve chairs Ben Bernanke and Janet Yellen speak at the Brookings Institute, 2 p.m.
LEADING THE DAY Check, please: The Treasury Department says it received a check from the Trump Organization donating the profits that its hotels made from foreign governments, a department spokesperson said Monday. The confirmation came after the company told The Associated Press that it donated the profits made from foreign governments since President Trump's election to the U.S. Treasury. George Sorial, a Trump Organization executive vice president, said in a statement to the AP that the company sent a payment to the Treasury Department on Feb. 22. But we still don't know how much the check was for, how the Trump organization calculated the total, and what was and wasn't factored in. That matters because Trump still has a financial stake in the company, and there are a few lawsuits about that. I break down all of that here. Land of the '3': The Trump administration is forecasting 3 percent growth for the next few years, betting that a slew of policy changes including slashing taxes and regulations will fuel a more robust economic expansion. President Trump has touted his ability to reach lofty economic goals, with officials arguing that his tax cuts, regulatory rollbacks and the infrastructure plan will usher in faster economic growth. But economists warn that any bump in growth could be short-lived and fraught with recessionary pressures that will rise heading into the next decade. The Hill's Vicki Needham and I tell you why. Buffett sees boon for business in tax deal: Investor Warren Buffett said in an interview on Monday that businesses will benefit from the Republican-backed tax-reform plan. The billionaire Democratic donor told CNBC that the tax plan, which President Trump signed into law in December, gives U.S. businesses a "huge tailwind."
"It certainly means corporations will pay quite a bit less in tax than they otherwise would," Buffett said. "When we make money in 2018 domestically, and subject to a lot of little things here and there, basically we'll be paying at 21 percent instead of 35 percent. That's a lot of money." MARKET CHECK: Scorching. From CNBC: "U.S. stocks closed sharply higher Monday, regaining more than half of their correction-level losses. "The Dow Jones industrial average added 399.28 points to close at 25,709.27 on the week's first day of trading with industrial titans Boeing and 3M contributing the most to the blue-chip index. The S&P 500 gained 1.18 percent to close at 2,779.60 after strong performance in telecommunications, technology and financials stocks. "The Nasdaq composite, meanwhile, climbed 1.15 percent to finish at 7,421.46." GOOD TO KNOW - The Hill's Naomi Jagoda tells us how accountants and lawyers are pouring over the pages of the new tax law and are starting to think about how companies can maximize their tax savings.
- Credit union advocates met with President Trump on Monday to rally White House support behind a bill to loosen Dodd-Frank Act financial rules.
- Democrats are arguing that they can win the debate over the tax law President Trump signed in December, pointing to a new poll conducted by GBA Strategies for the liberal Not One Penny coalition.
- Companies are scrambling to distance themselves from the NRA after the Florida shooting that left 17 dead.
- The Securities and Exchange Commission plans to target potentially misleading titles that stockbrokers use when they advise retail investors, according to the Wall Street Journal.
- Supreme Court Justice Neil Gorsuch is silent as the court wrestles with a key case for unions.
- A federal court today dismissed a challenge to President Trump's order calling for two regulations to be eliminated for each new one proposed.
- And also on the reg front, the White House today quietly released a report showing some benefits from regulations.
ODDS AND ENDS: - A federal judge ruled Monday that former drug company CEO Martin Shkreli will be held responsible for $10.4 million worth of financial losses related to his time as head of Turing Pharmaceuticals.
- The Kuwaiti embassy will hold a large National Day celebration at President Trump's hotel in downtown Washington tonight, the second straight year it's hosting the event at the Pennsylvania Ave. property. (I mean the other one, guys.)
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