Jul 31, 2019

Axios PM

By Mike Allen
Mike Allen

🐪 Good afternoon. Today's PM — edited by Shane Savitsky — is 596 words, a 3 minute read.

  • 🇮🇷 Bulletin: The Trump administration sanctioned Iranian Foreign Minister Mohammad Javad Zarif, a key negotiator of the 2015 nuclear deal, saying he should not be treated as a "credible" interlocutor.

📺 Get ready for tonight ... The biggest lesson Joe Biden learned from the first debate is that there are no rules of engagement at these things, and he's ready to throw down, five senior campaign officials told Axios' Alexi McCammond. Her debate preview.

1 big thing: A historic Fed decision
Expand chart
Data: Federal Reserve Bank of St. Louis; Note: Data shows Fed's target rate until 2008, then the upper limit of the federal funds target range; Chart: Naema Ahmed/Axios

The Federal Reserve announced this afternoon that it would slash its benchmark interest rate by a quarter point, as expected, in an effort to extend the economic boom and boost weak inflation, reports Axios' Courtenay Brown.

  • Why it matters: It's the first cut in over a decade. While previous Fed regimes have cut rates when the economy was not in the throes of a recession, the decision will likely be seen a legacy-shaping milestone in Jerome Powell's tenure as Fed chairman.

The big picture: Bloomberg calls the decision an "event with the ability to shape the outlook for the global economy this year," capping off "what might be the busiest week for the world economy this year."

  • "Fed officials see tighter linkages than in the past between U.S. and global economies, prompting new questions over how high they can raise domestic rates above those in other advanced economies, which have lower or even negative rates," writes The Wall Street Journal (subscription).
  • Speaking to reporters at a press conference, Powell scaled back market-watchers' expectations that today's decision could kick off a series of cuts.
  • Stock prices fell throughout the presser, but regained some ground before markets closed. However, the Dow still finished down 333 points, while the S&P fell 1.19% and the Nasdaq dropped 1.1%.

What it means for you: An isolated rate cut won’t have the same impact on your everyday life as a consistent series of cuts would.

  • Tightening cycles — or a series of rate cuts — benefit borrowers, not savers.
  • Some borrowing rates (think: mortgages or car loans) may drop a tad, but so will the amount you get by keeping money in savings accounts. A handful of banks already chopped interest rates on their savings accounts ahead of the Fed's move.
  • Credit card rates likely will not fall, despite a record-high for their interest rates.
Bonus: Pic du jour

Photo: Christian Thompson/AP

Speaker Nancy Pelosi meets Hon. Sarah Adwoa Sarfo at Ghana's Parliament as part of a congressional delegation's visit to observe the 400th anniversary of the first enslaved Africans being shipped to the U.S.

  • Yesterday, she tweeted: "Today was deeply transformative. We saw the horrors of slavery & humbly walked through the 'Door of Return' w/a renewed sense of purpose to fight injustice & inequality everywhere."
2. What you missed
  1. The FEC is considering a ban on campaigns accepting unregulated "compromising" information, which would be another check to prevent candidates from receiving assistance from foreign governments. Details.
  2. 8.7 million people tuned into the opening night of the second Democratic presidential debate on CNN, a smaller audience than the 15.3 million who watched NBC's coverage of the first debate's first round. By the numbers.
  3. Accused sex trafficker Jeffrey Epstein "hoped to seed the human race with his DNA by impregnating women at his vast New Mexico ranch," writes the N.Y. Times in an afternoon clicker. Worthy of your time.
  4. The House Judiciary Committee and the Justice Department have jointly proposed a briefing schedule for Democrats' petition to release grand jury materials from the Mueller report. Go deeper.
3. 1 fun thing
Screenshot via YouTube

Netflix released the first trailer for "The Irishman," the streaming service's Martin Scorsese mob drama with a budget approaching an eye-popping $175 million, per The Wall Street Journal (subscription).

  • Why it matters: The film "costs as much as some all-ages action-adventure movies because of cutting-edge visual effects that allow stars including Robert De Niro, Al Pacino and Joe Pesci to appear at different ages."
Mike Allen