Updated Oct 31, 2018

4. Top operatives expect a split Congress

Illustration: Axios Visuals

With less than a week until Election Day, top operators in both parties tell me the events of the past week have helped lock in the split decision they have long seen coming: The House flips to Dems (probably decisively), and Republicans hold the Senate (and perhaps gain two seats).

What they're saying: Democrats who had grown skittish about taking the House say they're resting easier. "The panic has abated," said a well-known Democrat on a secret mission in one of the key states.

Some top Republicans tell me they worry that their candidates will pay a price following the anti-Semitic murders in Pittsburgh and the arrest of a rabid Trump supporter for the mail bombs.

  • "World looks crazy, and we are in charge of it," said an official closely involved in the House fight.
  • "Hard to imagine a worse week at a worse time. What it means is hard to know exactly, but certainly not helping us win close races."
  • And why might the news have a split effect for Senate and House? "I think red state voters see the president leading the nation in a crisis, where the suburban voters blame him for the tone," a veteran GOP adviser said.

The one thing worrying Democrats ... A longtime Democratic operative said this is what to watch for on Tuesday:

  • "Super low turnout: Democrats win. Our core voters are going to vote. They hate Trump. They are dying to vote. Look at the Upshot/Siena polls. In every race where they do a turnout model, when they do voters 'certain to vote,' our candidates win. By a lot."
  • "Super high turnout: Democrats win. In addition to owning the most intense voters, we also own the least intense voters. Largely young people."
  • "But medium turnout: That scares me. The GOP owns the voters who aren’t quite as intense as our voters, but who are show-up-often voters."

Be smart ... One reason the cake may already be baked: As many as 40% of votes have been cast in early voting.

  • Disclaimer: This represents the consensus view of the top Democrats and Republicans most involved in the 2018 campaigns — all of whom were involved in 2016. This is the age of disruption: New shocks await, I guarantee.

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Scoop: Top NSC official reassigned to Energy Department amid "Anonymous" fallout

Photo: Mark Wilson/Getty Images

Deputy national security adviser Victoria Coates will be reassigned as a senior adviser to Energy Secretary Dan Brouillette, the National Security Council said Thursday — and a senior White House official said that the administration "rejects" the rumors that she is "Anonymous."

Why it matters: Coates has battled claims that she is the still-unknown Trump administration official that penned a New York Times op-ed and book critical of President Trump.

The Fed may be setting the table for 2020 rate cuts

Illustration: Sarah Grillo/Axios

The Fed looks to be laying the groundwork to lower U.S. interest rates this year, just as they did in April 2019 before cutting rates in July, September and October.

Why it matters: A Fed rate cut makes taking on debt more attractive for U.S. consumers and businesses, helping to juice the economy, but also puts the central bank in a weaker position to fight off a potential recession.

Morgan Stanley to buy E*Trade in a $13 billion deal

Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Morgan Stanley is planning to buy E*Trade Financial Corp. in a $13 billion all-stock deal, the Wall Street Journal reports, with plans to acquire the company known for helping everyday Americans manage their money.

Why it matters: The deal, which would be the largest by a major American bank since the financial crisis, signals Morgan Stanley‘s desire to bulk up in wealth management.