(Bloomberg) -- It’s a huge day for Donald Trump’s economic agenda.
Trump is set to name Jerome Powell to head the Federal Reserve, and the president will be counting on him to keep the U.S. economy growing so Republicans can reap the political benefits of tax cuts they plan to detail today.
Powell, who’s already on the Fed board, is viewed as a status quo pick who’s likely to continue the gradual interest-rate increases embraced by current Chair Janet Yellen. Yet the challenges are myriad. Chief among them: Raise rates too quickly and risk stalling the third-longest U.S. expansion and hurting a stock market rally for which Trump often takes credit.
The Fed pick comes on the same day that House Republicans unveil their long-awaited tax overhaul legislation, which represents Trump’s last chance for a major legislative victory in his first year.
To pass it by Christmas, as the president has urged Congress to do, lawmakers must clear a series of hurdles with no real margin for error. If they succeed it would fall to Powell — assuming the Senate confirms him — to deliver on Trump’s promised robust growth.
Tax tensions already | The forthcoming legislation would impose a tax of as much as 12 percent on multinational companies’ accumulated offshore earnings — a rate that’s higher than either Trump or House Speaker Paul Ryan have proposed. And it would phase out the estate tax more slowly than either of them would prefer. Individual rate cuts wouldn't be extended to top earners, which won’t please conservatives who want across-the-board cuts.
Sexual harassment storm | U.K. Prime Minister Theresa May is likely to name a young up-and-coming Conservative to replace her defense minister, Michael Fallon, who was seen previously as a potential leadership contender. Now he’s the first casualty of the sexual-harassment scandal engulfing Westminster. If any more dominoes fall, May’s premiership could be on the line.
NYC attack | Uzbek national Sayfullo Saipov was charged with providing material support to Islamic State after his arrest for running over and killing eight people in Manhattan on Tuesday. Trump said he should get the death penalty for the deadliest terror attack in New York City since 9-11 and blamed Democrats for backing the visa program that allowed the suspect to enter the U.S. — drawing criticism that he was politicizing the attack.
Bahrain’s bailout | The island kingdom of Bahrain is asking Saudi Arabia, the U.A.E. and Kuwait for aid to shore up its foreign-exchange reserves to avert a currency devaluation that could reverberate across the Gulf region. As Alaa Shahine and Zainab Fattah report, the three countries responded by requesting more fiscal reforms in return for the funds, but the smart money is still on a bailout.
China-North Korea thaw | After years of tensions over North Korean leader Kim Jong Un’s nuclear weapons and Chinese President Xi Jinping’s support for UN sanctions, the two neighbors exchanged pleasantries. Kim congratulated Xi on securing a second term as leader. Xi responded with a thank you note, advocating stable ties. The thaw came as a high-level North Korean defector told lawmakers in Washington the U.S. should speak with Kim, not plan for military action.
And finally… Sweden appears to enjoy ribbing Trump on climate change. In June its foreign minister called Trump’s move to quit the Paris climate accord a “decision to leave humanity’s last chance of securing our children’s future on this planet.” Now the government is paying for a former U.S. Interior Department official and prominent critic of the president’s policy to attend next week’s UN climate conference in Germany. John Clement says he plans to speak about, among other things, the U.S. “war on science and fact.”
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