The Economy

With an improving economy, the Fed hikes interest rates for the 1st time since 2006: The Fed has ended the zero-rate era, voting to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent.  Chair Janet Yellen said the move “would be followed by “gradual” tightening as officials watch for evidence of higher inflation.” Christopher Condon, Bloomberg [More]

U.S. stocks closed sharply lower Friday in following Federal Reserve’s rate hike Wednesday: The major U.S. averages wiped out gains for the week. Trade volume Friday was the second-highest of the year. The Dow Jones industrial average had its worst day since Sept. 1, closing nearly 370 points lower as dwelling accelerated into the close. Evelyn Cheng, CNN [More]

Bond investors abandon ship – biggest bonds-funds outflow since June 2013: “Ahead of the first interest-rate hike in nearly a decade,… the week … saw the biggest outflow from bond funds since June 2013, to the tune of $13.1 billion…Not surprisingly, investors pulled the most cash out of illiquid and low-quality assets, such as junk bonds. “Bond carnage” is how the bank titled the report.” Barbara Kollmeyer, MarketWatch [More]

The divergence amongst the world’s major central banks: While the Fed recently raised short-term interest rates and the Bank of England is preparing to raise rates, the ECB and the Bank of Japan are buying bonds in huge quantities to stimulate their sluggish economies and fight deflation risks. Wall Street Journal [More]

The end of the 40-year-old ban on crude oil exports will likely help U.S. in the global energy arena: “The U.S. is on the verge of ending the restriction, after congressional negotiators late Tuesday included removing the ban in a deal on a $1.15 trillion spending bill, along with such provisions as the extension of tax breaks on solar and wind energy.” Patti Domm, CNBC [More]

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Foreign Affairs/National Security

UN Security Council adopts resolution outlining a peace process in Syria: Reaching a rare agreement on the issue, the council endorsed a resolution that would begin talks between the Syrian government and opposition in early January, as well as a ceasefire. However, the resolution does not outline President Bashar Assad’s role. BBC News [More]

US-led air assaults against ISIS fighters kill at least 180: The airstrikes kicked off the most intense fighting that northern Iraq has seen this year, demonstrating ISIS’ resilience and “the challenges that Iraqi forces and their U.S. backers will face as they seek to reclaim Mosul and other areas under Islamic State control in Iraq and Syria.” Missy Ryan and Loveday Morris [More]

Russia unveils new military hardware from space to use in attacks on Syria: “Moscow claimed it has positioned 10 satellites—representing more than 10 percent of Russia’s space arsenal—over Syria to map terrain, spot targets and gather other intelligence, and relay radio signals between far-flung ground, air, and sea forces.” Ad Astra, The Daily Beast [More]

Defense Secretary conducted some official business on a personal email account:  Ash “Carter continued the practice … for at least two months after it was publicly revealed in March that Hillary Clinton had exclusively used a personal email account as secretary of state …” Michael Schmidt, New York Times [More]

Zakaria: The phrase ‘Radical Islam’ has nothing to do with defeating terrorism: “Fighting [ISIS] is not the same as fighting radical Islam…Even if the Islamic State were defeated tomorrow, would that stop the next lone-wolf jihadist in New York or Paris or London? The San Bernardino killers appear to have been radicalized when the terrorist group barely existed. In fact, the enemy is radical Islam, an ideology that has spread over the past four decades …The fight against it must at its core be against the ideology itself. And that can be done only by Muslims — they alone can purge their faith of this extremism.” Fareed Zakaria, Op-Ed, Washington Post [More]

Friedman: Paris Climate Accord is a major success: “We still have a chance to meet what scientists say is our key challenge: to avoid the worst impacts of global warming that we cannot possibly manage and to manage those impacts that we can no longer avoid. That is a big, big deal…Hat’s off, because this keeps alive the hope of capping the earth’s warming to 2 degrees Celsius, or 3.6 Fahrenheit, above the level that existed at the dawn of the Industrial Revolution…We’re already almost halfway to passing that redline.” Thomas Friedman, Op-Ed, New York Times [More]

Our fight against ISIS begins online: “Whatever consensus the administration and Congress reach in terms of prosecuting the fight against the Islamic State on the ground, our battle online — disabling the group’s ability to freely propagandize, recruit and plan attacks and disrupting the group’s online terror propaganda and the technology it uses to communicate —may be the most decisive. The evidence of the power of the Internet to radicalize and encourage violence is clear: 30,000 people, an estimated 250 from the United States alone, have joined the group in Iraq and Syria from countries around the world since June 2014.” Mark Wallace, Op-Ed [More]

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Domestic Affairs

Congress clears omnibus spending bill and avoids government shutdown: The bipartisan compromise contains $1.1 trillion in spending and about $680 billion in tax cuts for businesses and low income workers: “Both the fossil fuel and alternative energy industries can count themselves as winners, following a trade of the decades-long ban on crude oil exports for an extension of wind and solar tax credits. Syrian refugees, 9/11 first responders and the District of Columbia’s elementary and middle school sets are among the other winners. Obamacare, banks and even portrait artists look to be among the losers.” Bernie Becker, Politico [More]

Congress’ half-trillion dollar spending binge: Budget austerity takes a backseat to  unpaid-for tax cuts, “[T]he GOP-led Congress is going on a $680 billion spending spree – none of which will be paid for by budget cuts or other tax offsets. And all of which will be added to the national debt … ‘There’s something from everybody’s wish list” Rachael Bade, Politico [More]

The 1st criminal charges in San Bernardino shooting: Just hours after President Obama spoke about terrorism, federal prosecutors arrested Enrique Martinez, 24, a friend and former neighbor of Syed Rizwan Farook, who allegedly provided “material support – including himself, a firearm, and explosives – for crimes of terrorism.” Marina Koren, The Atlantic  [More]

“Pharma Bro” Martin Shkreli arrested for securities fraud: Shkreli became a symbol for drug company greed and corporate excess after it was revealed that he raised the price of a life-saving drug from $13.50 to $750…. He is now accused of running his company like a Ponzi scheme…” Christie Smythe and Keri Geiger, Bloomberg [More]

Obama doubles clemency numbers for drug offenders: In an effort to reduce prison crowding and give relief to drug offenders who were given lengthy sentences on drug charges during the “war on drugs,” Obama commuted the sentences of 95 drug offenders, doubled his clemency numbers since July. Ryan Reilly, The Huffington Post [More]

Bergdahl will face a military trial on charge of desertion and misbehavior before the enemy: The US Army decided  to reject the preliminary hearing recommendation that suggested Sgt. Bergdahl face a special court-martial, a move that means he could be sentenced to life in prison if found guilty. Eugene Scott, CNN [More]

NYC and LA give different responses to same terror threat: A terror threat on Tuesday that ultimately proved to be a hoax kept more than 600,000 children in Los Angeles from going to school. However, a similar threat in New York City didn’t prevent another 1.1 million kids in New York from attending classes as officials called deemed the threat as an amateurish hoax. Adam Chandler, The Atlantic [More]

Freddie Gray mistrial – An examination of the meaning of justice:  After a mistrial in the case of the first of six officers charged in the death of Freddie Gray, a man who died in police custody, protesters chanting “No Justice, No Peace” filled the streets. Charles Blow attempts to uncover the meaning of justice in these types of questionable cases. “Is justice a charge, a trial and a fair presentation of fact? Is it a favorable verdict? Is it system-altering legislation and an adjustment in patterns and practices?..It seems to me that justice looks different depending on your vantage point…Justice can be defined only relative to your stake in it.” Charles Blow, Op-Ed, New York Times [More]

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Polls

Poll finds national security now a top concern for 2016: 40% people think national security and terrorism should be the government’s top priority, and more than 60% put it in the top two, up from 39% 8 months ago. Janet Hook, Wall Street Journal/NBC News poll, Wall Street Journal [More]

Despite criticism, Trump now has his biggest lead over the GOP field: Following his proposal to temporarily bar Muslims from entering the country, Donald Trump’s support stands at 38%, up 6 points since November. Ted Cruz in 2nd place with 15%, doubling his support since last month. Marco Rubio and Ben Carson are tied for 3rd, with 12% each. Carson saw his support cut roughly in half recently. Dan Balz and Scott Clement, Washington Post [More]

Clinton maintains lead heading into NH debate, but with a trustworthiness deficit: Hillary Clinton leads Bernie Sanders by 31% (Clinton 59, Sanders 28) in the latest ABC News/Washington Post poll. Despite this lead, 44% say Sanders is more honest and trustworthy, vs. 38 percent who pick Clinton. She’s particularly vulnerable in this area among whites (Sanders +26) and political independents (Sanders +25). Gregory Holyk, ABC News [More]

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2016 Campaign

Trump wins praise from Putin : Vladimir Putin recently described Trump as “a very outstanding man, unquestionably talented” and “the absolute leader of the presidential race”. He also praised Trump’s plan to build a deeper relationship with Russia. Trump has said that he would ‘probably get along very well’ with Putin.” David Jackson, USA Today [More]

The crowd behind the Donald Trump phenomenon: “For the most part, people were…here to be part of something larger than themselves: part of the Trump Crowd, … a phenomenon … that has become more raucous and sporadically violent as this primary season of fear and anger has progressed.” Stephanie McCrummen, Washington Post [More]

DNC penalizes Sanders campaign for improper access of Clinton voter data: After a Sanders staffer viewed confidential voter information the DNC shut off the Sanders campaign’s access to the strategically crucial list of likely Democratic voters. The campaign will not be able to access the data until it provides an explanation and assures that all Clinton is destroyed.” Rosalind Helderman, Anne Gearan and John Wagner, Washington Post [More]

Cruz and Rubio spar over granting undocumented immigrants a path to citizenship : At the GOP presidential debate, during an exchange with Marco Rubio, Ted Cruz came out against ever providing any form of legal status to the 12 million people presumed to be living illegally and embraced a policy of “self-deportation.” This contradicted statements he made in 2013 and provided an opening to Rubio’s campaign who will use this to portray Cruz as a inauthentic political opportunist.  Eli Stokols, Politico [More]

Rubio’s financiers push him to win an early primary:  ”Every Republican nominee in modern times has won Iowa or New Hampshire … But … Rubio’s strategy has pointed toward a test of whether a candidate who finishes no better than second in either could still manage to stay alive.” Jeremy Peters, New York Times [More]  

GOP’s rift on foreign policy in the Middle East: The clash between Marco Rubio and Ted Cruz over Syria’s Bashar Assad shows the deep disagreement over how to deal with Middle East dictators. Trump reminded the audience that he was against the invasion of Iraq in 2003.  “Cruz, playing the role of foreign policy realist, said that President Barack Obama had left America less secure by pushing for the ouster of Arab dictators, including Assad, whom Obama insists must leave power. … [Rubio]’s full-throated support for human rights and democracy echoes, to many Republican ears, Bush’s grandiose, transform-the-Middle-East philosophy.” Michael Crowley, Politico [More]

Window for independent bid by Trump remains wide open: “Trump could campaign…well into March before deciding to ditch the GOP and mount an independent bid … [T]he obstacles standing in his way are few, so long as he’s willing to spend seven-figures to secure a place on the ballot.” Ben Schreckinger, Politico [More]

New attack on Hispanic voting rights: “Tactics to suppress minority voting are flourishing – especially in states where Hispanic voters are reshaping the electorate..If Hispanics were to start registering and voting in the same percentages that Anglos do in Texas, and continued to prefer Democrats over Republicans in the same proportions that they do now in presidential elections, Democrats would be able to shave the 16-point deficit they saw there in 2012 to 6 points by 2024.” Jim Rutenberg, New York Times [More]

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Notable Books & Film

Under the Gun premieres Jan. 24th at Sundance: “Searing and powerful with never-before-seen footage of the shooting in Aurora, Under the Gun gives a human face to a crisis that is costing us in blood and scarring the conscience of a nation…Gabby Giffords and Mark Kelly are among several families impacted by both mass shootings and daily gun violence that the film follows.” [More]

John Heilemann (TCG Speaker) & Mark Halperin (TCG Speaker) launching Showtime series called The Circus: The real time documentary series will debut in January before the Iowa caucuses and run through election day. Hadas Gold, Politico [More]