 Happy Thursday and welcome back to On The Money. 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. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--Trump makes Fed chief economic punching bag: President Trump has turned his hand-picked Federal Reserve chairman into a political punching bag as dark clouds close in on the U.S. economy. Trump has blamed Fed Chairman Jerome Powell for a series of economic setbacks, pinning a stock market slide and impending layoffs at General Motors on the central bank's interest rate hikes. While the U.S. still enjoys unemployment near record lows and solid economic growth, economists and policymakers are bracing for a slowdown or recession due before the next presidential election. If those fears materialize, Trump has set Powell up to potentially take the fall as the Fed attempts to weave a careful path forward amid economic uncertainty. "He's finding an easily identifiable punching target," said Brandon Barford, partner at Beacon Policy Advisors, "and it's helping him deflect what could be challenging economic developments or circumstances from his own choices." I break down what's going on here. The split: - Trump and Powell, both Republicans, hold drastically different views on how the Fed should steer the U.S. economy through the end of the post-recession recovery. The central bank has been gradually raising interest rates since 2015 after slashing them to near-zero levels in 2008.
- Trump has been open about his preference for lower interest rates and has blasted the Fed for cutting off stimulus despite low unemployment and strong gross domestic product growth.
- Powell, like most Republicans, says it's crucial to raise rates and cut back stimulus to the strong economy before cheap money spurs rampant inflation or financial market bubbles.
- This week, Trump has ratcheted up the criticism after GM announced plans to lay off 15,000 workers and close up to four U.S. factories. Those plans reflected long-term declines in U.S. car sales and a rapidly changing auto industry, but Trump on Tuesday pinned blame on Powell.
The policy: - Powell and Trump have been on a collision course since the chairman took control of the Fed in February. The Fed has raised rates three times under Powell and is expected to do so again in December.
- The Fed is likely to raise rates three to five more times within the next year. Powell, though, indicated Wednesday that the bank could slow down that process despite his confidence in the economy.
LEADING THE DAY Schumer floats stopgap spending bill amid border wall fight: Senate Minority Leader Charles Schumer (D-N.Y.) on Thursday said that Congress should pass a stopgap spending bill for the Department of Homeland Security if President Trump won't agree to $1.6 billion for border security. Schumer said that Trump had "two good bipartisan options" to avoid a shutdown -- the Senate's DHS bill or a continuing resolution -- both of which, he predicted, would get more than the 60 votes needed to pass the Senate. "If the president doesn't want to agree to the bipartisan bill, we could avoid a shutdown by passing a continuing resolution for the Department of Homeland Security. We think it should be for the whole year. It would keep the government open and still provide another $1.3 billion for border security," Schumer said from the Senate floor. The Hill's Jordain Carney and Niv Elis update us here.
Pelosi threatens to demand Mueller protection language in spending bill: House Minority Leader Nancy Pelosi (D-Calif.) says Democrats will demand that protections for special counsel Robert Mueller be included in a must-pass spending bill if GOP leaders fail to bring the legislation to the floor. The Thursday threat comes on the heels of news that Michael Cohen, President Trump's former personal attorney, has entered into a plea agreement with Mueller and agreed to cooperate in the special counsel's sprawling Russia probe. Cohen pleaded guilty to lying last year to congressional panels investigating Russian interference in the election. "The Congress must immediately pass legislation to preserve the Special Counsel investigation, which is identical to bipartisan legislation passed by the Senate Judiciary Committee," Pelosi said in a statement. The Hill's Melanie Zanona tells us why here. Senate votes to advance Trump consumer bureau pick: The Senate voted Thursday to advance President Trump's controversial pick to lead the Consumer Financial Protection Bureau (CFPB) toward a final confirmation vote next week. Senators voted 50-49, along party lines, to end debate on Kathy Kraninger's nomination to be the next CFPB director, with no Democrats supporting her. Kraninger is likely to be confirmed next week after a contentious Senate floor debate over her selection. Kraninger is on track to get a five-year term leading the consumer watchdog agency with broad independence and power to police to financial sector. She's pledged to make the agency less costly and burdensome on the firms it oversees, but has shed little light on her agenda. I've got more about the intense partisan battle over her nomination here.
MARKET CHECK: CNBC: "Stocks closed lower on Thursday as hopes of a trade deal being struck between China and the U.S. dimmed." GOOD TO KNOW ODDS AND ENDS - Floyd Mayweather and DJ Khaled have settled federal charges related to their promotion of a cryptocurrency-backed investment offering, the SEC announced Thursday.
- Twitter shares fell sharply on Thursday, dropping more than 8 percent in early-day trading, on fears of a conservative boycott.
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