Overnight Finance: Banks close in on Dodd-Frank relief | Inflation reaches threshold for Fed rate hikes | Rubio undercuts GOP tax message | Closing arguments in AT&T trial

View in your browser     Happy Monday and welcome back to Overnight Finance, which spent White House Correspondents Dinner weekend binging on The Great British Baking Show. 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: Banks are close to winning long-sought relief from strict regulations imposed after the 2008 financial crisis.  Congress is near the passage of a bipartisan deal to exempt dozens of banks from parts of the Dodd-Frank Act of 2010.  Federal agencies controlled by President Trump's appointees are sprinting toward significant rollbacks of key Dodd-Frank rules meant to insulate banks from a disabling financial crisis. And the acting director of the Consumer Financial Protection Bureau (CFPB) is dismantling the aggressive regulatory and enforcement practices that enraged Republicans and banks while pleasing Democrats and financial sector skeptics. Advocates for banks and credit unions are beaming as Washington starts to pick apart Dodd-Frank, following years of pressure and wishful thinking. "This is the beginning of a complete change in attitude among the policymakers of Washington," said Wayne Abernathy, an executive vice president for the American Bankers Association (ABA), the top lobbying group for U.S. banks. "These are just the hors d'oeuvres. This is setting the stage for a lot more important things to come." I've got more on those efforts and how they'd reshape banking law right here.   Why it matters: Republicans have struggled in vain for almost a decade to loosen much of Dodd-Frank. The financial sector opposed the law from its inception for significantly expanding the federal power to supervise and penalize banks and lenders. Democrats successfully defended the law, a pillar of former President Obama's economic legacy, during his tenure. Republicans railed against the new rules but were powerless to repeal the regulations in the face of Obama's veto. Trump's stunning 2016 victory, which came after he pledged to "dismantle" Dodd-Frank, changed that. Republican control of the White House and Congress made the law vulnerable for the first time since its passage. Dodd-Frank's critics spent much of 2017 laying the groundwork for its undoing. Trump filled his Cabinet with financial sector veterans devoted to reining in the law, while the House and Senate worked on bills to reshape it.   Reactions: "Leverage in and of itself shouldn't determine the risk profile for the bank. In a particular situation, it shouldn't control the determination of risk but rather be one of the factors to goes into evaluating." -- Bob Kurucza, a partner at Goodwin covering federal banking and securities law. "I can't tell you exactly where the next step is, but it will be soon, and very soon, that this legislation will be moving forward." -- James Ballentine, ABA executive vice president of government relations.  "The Fed is shooting in the dark and they are going to hit some innocent bystanders," -- Karen Petrou, managing partner of Federal Financial Analytics.   What comes next: Currently, House Financial Services Chairman Jeb Hensarling (R-Texas) wants the Senate to consider other roll back provisions and has delayed acting on their bill. But House Majority Leader Kevin McCarthy (R-Calif.) said Monday that the lower chamber is "within a month" of sending the Senate bill to Trump's desk. He controls the House floor, so his projections hold weight. But it's also in McCarthy's best interest to be optimistic, so we'll keep a close eye on it.   ON TAP TOMORROW  Deadline for President Trump to grant exemptions from the steel and aluminum tariffs.     LEADING THE DAY Inflation reaches key threshold for Fed rate hikes: Inflation for the first time in several years has increased to the Federal Reserve's annual target, the Commerce Department reported Monday, reaching a key threshold for the future of U.S. interest rates. The personal consumption expenditures (PCE) index, the Fed's inflation barometer, increased 2 percent in the 12-month period ending in March, according to data released Monday. Consumer prices stayed flat in the month of March itself, while consumer prices minus volatile food and energy rose 0.2 percent. Consumer spending overall rose 0.4 percent in March after decreasing 0.2 percent in February. Personal income increased 0.3 percent in March, the same rate from February. Wages and salaries increased 0.2 percent in March after increasing 0.4 percent in February. With inflation reaching the Fed's preferred level in March, the bank could increase interest rates further than its current projections. I'll tell you why that matters right here.   Rubio blows hole in GOP tax-cut messaging: Sen. Marco Rubio (R-Fla.) told The Economist in a recent interview that "there's no evidence whatsoever" that the corporate tax cut Republicans passed last year is overwhelmingly benefiting workers. "There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers," Rubio said in the interview, published late last week. "In fact they bought back shares, a few gave out bonuses; there's no evidence whatsoever that the money's been massively poured back into the American worker."  The comments are being highlighted by Democrats -- including Senate Minority Leader Charles Schumer's (D-N.Y.) office -- who view the remarks as bolstering their case against the tax law. Democrats have been hammering Republicans over the increase in stock buybacks that has occurred since the tax law passed. Republicans, though, have generally focused on the companies that have announced bonuses, wage increases and new capital investments. The Hill's Naomi Jagoda digs in here.   Closing arguments made in AT&T-Time Warner merger trial: The two sides in the trial over the AT&T-Time Warner merger squared off in court for the final time on Monday, offering closing arguments in the landmark antitrust case. The Justice Department said that the proposed AT&T-Time Warner merger would remake the television industry, giving the combined company the ability to use popular Time Warner content to hurt rival pay-TV providers. Both sides mainly summarized the points they made over the past six weeks of trial. Judge Richard Leon pledged to issue a ruling by June 12 in order to beat a June 21 merger deadline that the companies are facing. The Hill's Harper Neidig takes us inside the courtroom here.   MARKET CHECK: Stocks took a tumble Monday, with all three major indexes ending up with losses. The Dow Jones Industrial Average shaved off 148 points (0.61 percent), while the S&P 500 and Nasdaq dropped 0.82 percent and 0.75 percent each.   GOOD TO KNOW Sen. Jon Tester (D-Mont.), might be one of the only vulnerable incumbents getting support from the American Bankers Association and Sen. Elizabeth Warren (D-Mass.). ABA released an advertisement last week featuring bankers from his state praising Tester for his work on Dodd-Frank rollbacks. Warren sent out a fundraising email for Tester today defending him in response to Trump's threats against the Montanan. The president is targeting Tester after the senator revealed stunning allegations about Adm. Ronny Jackson, the president's pick to be VA secretary. Jackson withdrew his name from consideration last week. The New York Times checks in on our old pal, former Consumer Financial Protection Bureau director Richard Cordray, as he pursues the Democratic nomination for governor of Ohio against Dennis Kucinich. This is loaded with eyebrow-raising passages about both candidates. Politico looks at why Mick Mulvaney's tenure atop the CFPB hasn't been as "explosive" as expected. Chinese conglomerate HNA Group Co. is set to drop its pursuit of SkyBridge Capital, the investment firm founded by Anthony Scaramucci, amid resistance from the Committee on Foreign Investment in the U.S (CFIUS), according to The Wall Street Journal.   ODDS AND ENDS President Trump on Monday asked African nations to support a joint North American bid to host the 2026 World Cup, despite FIFA's warning against political influence last week.     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.         Did a friend forward you this email? 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News Alert: Impeachment looms large in White House midterm plans

View in your browser     Impeachment looms large in White House midterm plans President Trump wants to step up efforts to protect Republican control of the House in hopes of avoiding an impeachment debate and congressional investigations if Democrats seize the chamber, according to GOP sources. “It is super important to the White House and really the whole White House is very focused on it,” said a source familiar with strategy talks about protecting the House majority. Read the full story here           Did a friend forward you this email? Sign up for News Alerts     Forward News Alerts     You Might Like       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Defense: Netanyahu argues against Iran deal ahead of Trump deadline | Trump floats locations for Korea talks | Deadly day in Afghanistan

View in your browser     Happy Monday and welcome to Overnight Defense. I'm Rebecca Kheel, and here's your nightly guide to the latest developments at the Pentagon, on Capitol Hill and beyond.   THE TOPLINE: There's just about two weeks to go before President Trump has to decide whether to continue waiving sanctions on Iran or essentially withdraw the United States from the nuclear deal. And Israeli Prime Minister Benjamin Netanyahu made his case Monday for why Trump should withdraw. In a dramatic presentation at Israel's Defense Ministry in Tel Aviv, Netanyahu presented evidence of what he said was Iran lying about its desire to obtain nuclear weapons and then hiding that evidence to ensure it retains knowledge of how to build them. "This is a terrible deal. It should never have been concluded, and in a few days time, President Trump will decide, will make his decision on what to do with the nuclear deal," Netanyahu said during a speech he delivered in English. "I'm sure he'll do the right thing. The right thing for the United States, the right thing for Israel and the right thing for the peace of the world."   The accusations: Netanyahu's presentation detailed what he said was a trove of 100,000 documents obtained by Israeli intelligence on Iran's nuclear program. The documents, Netanyahu said, provide conclusive evidence that the goal of Iran's nuclear program was to obtain a weapon, contrary to statements from Iranian officials saying the nuclear program was peaceful. "Iran lied. Big time," Netanyahu said. The documents that Netanyahu displayed Monday detail "Project Amad" and included a supposed "mission statement" to "design, produce and test five warheads, each with 10 kiloton TNT yield for integration in a missile." Iran lied further, Netanyahu said, when it did not tell the IAEA about the program in 2015, contrary to requirements of the nuclear deal. After signing the nuclear deal in 2015, Iran "intensified its efforts" to hide the documents so that it could preserve its nuclear know-how, Netanyahu added.   Is this new?: Experts say no -- that the nuclear program Netanyahu detailed has been known and was the reason the deal was negotiated in the first place. International Atomic Energy Agency (IAEA) said in 2011 that it had credible evidence showing Iran was doing nuclear weapons work under a structured program through 2003 and that work may have continued past that. The IAEA then made a final judgment in 2015 as the nuclear deal was being adopted that reiterated its 2011 findings. As such, supporters of the deal said Netanyahu's presentation only reinforced its necessity. "There is no new information and the concern that Mr. Netanyahu emphasized that Iran retains residual technical knowledge that is useful in constructing a weapon is exactly the reason the [Iran deal] should be upheld -- to deny Iran the fissile material necessary to execute that knowledge," Thomas Countryman, a former Obama administration State Department official and current Diplomacy Works Advisory Council member, said in a statement.   Why it still matters: Netanyahu's speech appears to have been aimed at an audience of one -- Trump. And in that regard, the speech may have been a success. Asked about the speech at his own press conference with the Nigerian president, Trump said that what Netanyahu had described was "just not an acceptable situation." "I'm not telling you what I'm doing, but a lot of people think they know," Trump said of his decision on the Iran deal. "That doesn't mean I wouldn't negotiate a new agreement. We'll see what happens, but I think if anything what's happening today and what's happened over the last little while and what we've learned has really shown that I've been 100 percent right."     NORTH KOREA UPDATE: The flurry of diplomatic developments on the Korean peninsula picked up over the weekend and into Monday. Among the developments was Trump confirming two sites under consideration for his summit with North Korean leader Kim Jong Un: the demilitarization zone that separates the two Koreas and Singapore. Here are some of the other North Korea headlines you may have missed:   Trump doesn't think Iran deal will affect Korea talks: Trump said Monday that pulling out of the Iran nuclear deal would not hurt upcoming talks with North Korea. "I think it sends the right message," Trump said when asked if his approach to the deal with Tehran sends the wrong message to Pyongyang. "You know, in seven years, that deal will have expired and Iran is free to go ahead and create nuclear weapons," he added. "Seven years is tomorrow. That's not acceptable." Trump spoke during a press conference with Nigerian President Muhammadu Buhari at the White House.   North makes more promises to give up nukes, shut down testing facility: South Korean officials said over the weekend that North Korea agreed to give up its nuclear weapons if the United States agrees not to invade. The promise was apparently made during Kim's summit with South Korean President Moon Jae-in. "I know the Americans are inherently disposed against us, but when they talk with us, they will see that I am not the kind of person who would shoot nuclear weapons to the south, over the Pacific or at the United States," Kim said, as detailed by South Korean spokesman Yoon Young-chan. The South Koreans also said Kim plans to shutter the Punggye-ri nuclear test site in May and disclose the process to experts and journalists from South Korea and the United States.   Trump for Nobel Peace Prize?: South Korean President Moon became the latest to suggest Trump might deserve a Nobel Peace Prize if peace on the Korean peninsula is achieved. "President Trump should win the Nobel Peace Prize. What we need is only peace," Moon told South Korean officials.   DEADLY DAY IN AFGHANISTAN: One U.S. service member was killed and another injured during a combat operation in eastern Afghanistan on Monday, the U.S. military said. Several Afghan security forces were also killed or injured, according to a statement from U.S. Forces-Afghanistan. "My thoughts and those of U.S. Forces-Afghanistan are with the families and friends of our fallen and wounded service members," Gen. John Nicholson, commander of U.S. forces in Afghanistan, said in a statement. "Their valiancy in battle, and that of the brave Afghan partners they fought alongside, will endure in our hearts and history." The wounded U.S. service member is in stable condition and was taken to Bagram Airfield's hospital for treatment, according to the statement. The identity of the service member who died is being withheld until 24 hours after next of kin is notified. The statement does not specify where in eastern Afghanistan the operation was, nor what the goal was.   Other attacks: Monday was a particularly bloody day in Afghanistan, with a series of attacks in Kabul that killed dozens of people, including journalists and emergency workers who rushed to the scene after the first bombing. ISIS took responsibility for the attacks. Separately, a suicide bomber rammed an explosives-laden van into a convoy of foreign forces near a mosque near Kandahar, killing 11 children. Eight Romanian soldiers who are part of the NATO-led Resolute Support mission were injured.   Context: The United States has about 14,000 troops in Afghanistan on a dual mission of training, advising and assisting Afghan troops in their fight against the Taliban and conducting counterterrorism operations against groups such as ISIS and al Qaeda. That's an increase of about 3,000 that Trump sent there after announcing his Afghanistan strategy last summer meant to reverse the tide of a deteriorating security situation. Attacks like Monday's show the security situation in Afghanistan remains precarious.   ON TAP FOR TOMORROW Army Secretary Mark Esper will speak about "Army Vision and Modernization Priorities at 10 a.m. at the Atlantic Council. https://bit.ly/2raOUg5   ICYMI: -- The Hill: US shuts down ground operations command in Iraq -- The Hill: Historic Korean summit sets high bar for Trump -- The Hill: Trump: Didn't discuss 's---hole' comments with Nigerian president -- The Hill: White House pushes back on reports of Jackson's ouster as Trump's physician -- Military Times: Lawsuit calls acting VA Secretary Wilkie's appointment illegal, demands immediate removal     Please send tips and comments to Rebecca Kheel, rkheel@thehill.com, and Ellen Mitchell, emitchell@thehill.com. Follow us on Twitter: @thehill, @Rebecca_H_K, @EllenMitchell23         Did a friend forward you this email? Sign up for Defense Newsletters     Forward Defense Newsletters       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.