RATE HIKE LIKELY: The Federal Reserve is expected to lift the benchmark interest rate for the first time in three years today, when the central bank announces its decision at 2 p.m., capping off a two-day meeting.
A rate hike is not guaranteed, since Federal Reserve Chair Kevin Warsh does not provide signals, as past chairs have, about future actions the Fed may take. But at a speech in Jackson Hole, Wyo., two weeks ago, Warsh argued the Fed still had work to do to bring inflation down and stabilize prices, stressing the importance of listening to market signals.
Investors have taken his speech, along with the latest economic indicators, as signs that the Fed will move forward with a quarter-point rate hike, putting the target range at 3.75 percent to 4 percent. FedWatch put the chances of a rate hike at 94.5 percent, as of Tuesday afternoon, with a 5.5 percent shot of no change.
The forthcoming decision, less than two months ahead of the midterm elections, would put Warsh at odds with Trump, who backed Warsh for the position with the explicit expectation that he would cut interest rates.
Trump on Sunday reiterated his desire for lower rates, saying, “The United States is so strong we should be paying the lowest interest rate in the world.”
Gas prices and affordability issues have been top of mind for voters, as the war in Iran continues, straining access to global oil supplies.
Meanwhile, inflation has remained stubbornly elevated, at 3.4 percent in August and July and 3.5 percent in June. Before the war, in January and February, inflation was 2.4 percent — much closer to the Fed’s 2 percent target range.
▪ The Hill: Warsh under pressure as Fed considers rate hike.
▪ The Hill: Benchmark bond yield reaches highest level in nearly 20 years.
OPEN OR CLOSED: A federal judge blocked an effort by Trump’s handpicked board at the Kennedy Center to restore the president’s name to the facade of the venue — just as the board voted to close the center’s main building for renovations.
Shortly after the vote, Trump, who is also chair of the board, issued an ultimatum on Truth Social, saying the construction on the building “cannot begin until such time as the D.C. Circuit rules on the Board’s approved name,” referring to the addition of his own name to the performing arts center named for former President John F. Kennedy.
“If the ruling is a negative one, which it should not be, and is not overturned by the U.S. Supreme Court, the Reconstruction and the Renovation of The Kennedy Center will not take place,” Trump wrote.
“The attorneys from the DOJ [Department of Justice] will ask for an expedited appeal,” he continued. “In the meantime, 17 Million Dollars, raised by President Trump, has been put into The Kennedy Center account to keep it afloat.”
Despite the board’s vote to close the center for renovations, it’s unclear whether the closure will proceed, since a judge issued a preliminary injunction in May barring a previous effort to close the center.
▪ The Hill: Trump disses ‘hostile and conflicted’ judge who blocked renaming.
▪ The Washington Post: Read the text of the proposal to close the center.
DOUBLE DEFECTION: Democratic Reps. Jared Golden (Maine) and Marie Gluesenkamp Perez (Wash.) crossed party lines for the second time Tuesday to advance a key Russia sanctions bill.
The legislation, named for the late Sen. Lindsey Graham (R-S.C.), would grant the president the authority to levy tariffs on countries that purchase Russian energy and extend existing sanctions on Iran. Although the measure passed overwhelmingly in the Senate, it has proven contentious in the House, given the new tariff authority it gives to Trump.
The rule vote, which sets up a final vote on a bill, appeared headed for defeat as a few GOP holdouts refused to support it, but Golden and Gluesenkamp Perez provided key support that helped the rule narrowly pass 214-211. This marks the second time this month the two members broke with their party on a rule vote, a highly unusual move that has enraged some colleagues.
The Hill's Mike Lillis reports frustrations were already trickling out among House Democrats. A special party meeting after the two members defected the first time yielded no disciplinary action, but the latest move is sure to renew the conversation.
▪ The Hill: Crypto bill falls short in early Senate huddle.
▪ The Hill: House passes Iran war powers resolution for third time.
IN THE HOTSEAT: Democrats pressed FBI Director Kash Patel with questions on topics ranging from the FBI's role in upcoming elections to whether he's personally benefitted from his role during an at-times contentious hearing Tuesday.
Patel testified before the Senate Judiciary Committee as part of regular oversight. Chief among many Democratic members' concern was whether Patel would interfere in the midterms if Trump asked him to.
“The FBI will follow the law. If there’s a reason to go there because there’s been a violation of law, we will. Otherwise, we won’t,” Patel said in response to a question from Sen. Richard Blumenthal (D-Conn.).
Sen. Peter Welch (D-Vt.) pressed Patel on Trump's comments that the only way Democrats could win the midterms is if they cheat. Patel responded that the president has the right to express his opinions, a response that didn't satisfy Welch and other Democrats.
And in a more colorful exchange, GOP Sen. John Kennedy (La.) grilled Patel over a recent FBI policy change ending longtime bans on selecting new trainees who have engaged in prostitution or bestiality. Read more about that exchange here.
▪ The Hill: Takeaways as Senate Dems press Patel on elections, journalist subpoenas.
▪ The Hill: Treasury Secretary Scott Bessent grilled on AI, bond market.
