On The Money: Fed holds rates steady as economy strengthens | Trump requests $4.5 billion more for border crisis | Dems seek unity on spending bills | Moore looks to save Fed bid

Happy Wednesday 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.

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THE BIG DEAL–Fed holds steady on rates as economy strengthens: The Federal Reserve on Wednesday announced it would keep interest rates unchanged as inflation remains low despite a burst of economic activity during the first quarter of 2019.

The central bank’s Federal Open Markets Committee (FOMC), which sets monetary policy, was widely expected to hold the federal funds rate at a 2.25 to 2.5 percent range. The lack of action keeps in place a pause on interest rate hikes initiated by the central bank in January.

Top Fed officials, including Chairman Jerome Powell, have said throughout the year that the bank will be “patient” with rate adjustments as the U.S. economy remains strong despite concerns of a global slowdown.{mosads}

“In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” the FOMC said in a Wednesday statement. I break down their decision here.

The background: The Fed raised interest rates seven times over the past two years in a bid to stave off inflation as the economy expanded.

• Unemployment remains close to record lows at 3.8 percent as of March, and the economy added an average of 180,000 jobs in the first three months of 2019.
• U.S. gross domestic product also grew at an annual rate of 3.2 percent in the first three months of the year, according to federal data released last week. And the Commerce Department on Monday said consumer spending in March rose at the highest rate in close to a decade.
• Even so, inflation has lingered well below its target range of 2 percent, with core consumer goods prices only rising 1.6 percent in the past 12 months.

The rationale: Powell said that declining inflation was “not expected” but is likely due to “transitory” factors such as notable drops in asset management fees, apparel prices and airfare. He added that the decline would not change the Fed’s expectation that inflation will move toward the 2 percent target.

• “We think our monetary policy stance is in a good place and we are going to be patient,” Powell said Thursday. “We don’t feel like the data is pushing us in either direction.”

The backlash: The Fed chairman has had to walk a fine line as he has faced criticism from President Trump and Wall Street over his stewardship of interest rates and the nation’s economy.

Trump criticized the Fed on Tuesday, a day before the announcement, in a pair of tweets bashing the bank for hiking rates despite low inflation. He also slammed the Fed for gradually selling off billions of dollars in bonds purchased during the financial crisis, reversing efforts to stimulate the economy.

“Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening,” Trump tweeted, referring to the central bank’s efforts to cut its debt holdings. The Fed’s moves to sell bonds purchased during the crisis has the effect of pulling money out of the economy, potentially tightening financial conditions.

LEADING THE DAY

Dems put infighting aside to push ahead with spending bills: Democrats dove headfirst into 2020 spending bills this week, setting aside weeks of infighting to promote their appropriations agenda.

House panels on Wednesday advanced a $108.1 billion Military Construction-Veterans Affairs bill and a $3.9 billion legislative branch measure, a day after a separate subcommittee approved a $189.8 billion spending bill for the departments of Labor, Education, and Health and Human Services.

Democrats say they are aiming to pass all 12 spending bills by the end of June. The turnaround follows months of intraparty fighting, in which progressives and moderates failed to reach agreement on both a budget resolution and a bill to increase spending caps. The Hill’s Niv Elis explains why.

Key House Democrats are also pushing back against Trump’s request for an additional $4.5 billion in money for the border crisis, citing issues with how the money would be spent.

The request includes $3.3 billion for humanitarian assistance, which the administration said would be used to increase shelters and care for unaccompanied minors, in addition to processing arrivals. About $1.1 billion would go toward other border operations like expanding the number of detention beds and providing more investigation resources.

• Rep. Lucille Roybal-Allard (Calif.), the top House Democrat on Homeland Security spending, accused Immigration and Customs Enforcement (ICE) of being too focused on adding detention beds, a major sticking point for Democrats who see detaining undocumented immigrants who have not committed other crimes is a waste of resources.
• Rep. Rosa DeLauro (D-Conn.), who heads the appropriations subcommittee in charge of Health and Human Services, objected to the administration’s request for $2.9 billion for the Office of Refugee Resettlement. She said it was not the health agency’s job to enforce immigration policy, and that she would ensure there are conditions attached to make sure the refugee office is fulfilling its core mission.

Moore seeks to save nomination from ‘scorched-earth’ attacks: Stephen Moore on Wednesday sought to salvage his shot at a Federal Reserve Board nomination by touting his economic record and condemning his critics for “scorched-earth battle tactics.”

In a Wednesday opinion piece for The Hill, Moore defended his fitness for the Fed seat and insisted he would bring a sorely needed “prosperity-maximizing philosophy” to the central bank.

His defense comes as the shot at confirmation is slipping away amid growing backlash from GOP senators over his track record of making controversial remarks. I’ve got more on the fallout here.

GOOD TO KNOW

• New York Gov. Andrew Cuomo (D) said Wednesday that he’s asked state agencies to investigate tax-preparation services such as TurboTax and H&R Block following ProPublica reports, which alleged that the companies hid their free tax-filing options.
• A Trump ally on Capitol Hill is calling for the doubling of the federal gas tax and airline fees in order to pay for the $2 trillion infrastructure package being negotiated by President Trump and Democratic leaders.
• But Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday said that proposals to pay for infrastructure improvements by rolling back 2017 tax cuts were off the table, according to The Washington Post.
• The U.S. economy added 275,000 private sector jobs in April, according to a report released Wednesday, signaling continued strength in the labor market.

ODDS AND ENDS

• More than 1,000 Google employees participated in a sit-in on Wednesday protesting the company’s alleged retaliation against workers who have spoken up critically against the tech giant, a Google employee told The Hill.
• Former U.S. Ambassador to the United Nations Nikki Haley has officially joined Boeing’s board of directors.