Principals

1. GOP ducks rate demand
2. Trump still in Israel’s camp
3. Trump’s China curbs
4. Tariff rebate pushback
5. WH crypto moves
6. Railroad merger

PDB: Senate confirms Bove

Meta, Microsoft report earnings … US to report second-quarter GDP … Tsunami waves reach Hawaii

Trump stands alone on rate demand

The Federal Reserve is expected to again leave interest rates untouched today despite President Donald Trump’s long-running campaign — and that’s no problem for quite a few of his Republican allies in Congress, Semafor’s Eleanor Mueller reports. Several GOP lawmakers told Semafor that their issues with interest rates center on the Fed’s regulations and the United States’ borrowing — not the Fed’s monetary policy decisions. “The thing that I’ve cautioned, including in talk with the president, is: Last time Jerome Powell lowered interest rates … the market responded by actually increasing market rates,” said Rep. Warren Davidson, R-Ohio, who floated a regulatory change instead. Make no mistake: This is Trump’s party, through and through. A healthy number of Republicans won’t agree with the reasoning behind his push for Powell to cut rates, but none of them will say openly that the president should stop pushing.

Trump avoids wider break with Netanyahu

Trump raised eyebrows when he broke with Israel Prime Minister Benjamin Netanyahu and said there appears to be “real starvation” among children in Gaza — but that might be the extent of the divide between the two, Semafor’s Shelby Talcott and Burgess Everett report. Trump remains “very firmly in Israel’s camp,” said Sen. Lindsey Graham, R-S.C. A White House official added that Trump’s “position has not evolved,” but the war has, and no one inside the administration seems to be taking the comments as a meaningful shift from his previous approach. He’s “not a cookie-cutter Republican,” one person close to Trump noted, and therefore isn’t “a cookie-cutter supporter of Israel.” The episode is a reminder of the challenge of defining Trump’s policy decisions, which don’t always fit inside one ideological box.

Trump may not issue new AI rule

The Trump administration is debating whether to scrap plans to replace a Biden-era rule rescinded in May that set up a global framework for export controls designed to prevent AI chips from flowing to China, Semafor’s Morgan Chalfant and Burgess Everett report. Such a move would be the latest sign of the administration easing off its tough-on-China approach as it searches for leverage in trade talks and looks to propel US dominance in AI. Trump’s earlier decision to approve the sale of Nvidia H20 chips to China drew bipartisan scrutiny, with Sen. John Kennedy, R-La., calling it a “huge mistake.” In a statement to Semafor, a Nvidia spokesperson said that the Trump administration’s “approach promotes American technology leadership and benefits our national and economic security” and that the US government “has full visibility over every H20 sale to China.”

Hawley rebate plan draws friendly fire

Sen. Josh Hawley, R-Mo., based his new bill to send $600 tariff rebate checks to Americans off of an idea from Trump. It’s still running into friendly fire from his fellow Republicans, Semafor’s Burgess Everett reports. Hawley told Semafor he faces long odds but argued the politics would be on Republicans’ side. “It probably would be the most popular thing that this Congress would do. Which means, of course, Republicans would be against it,” he said. In interviews on Tuesday, several GOP senators — including one who generally aligns with Hawley on tariffs — said they couldn’t support the proposal while the country is running $2 trillion deficits. “Oh, God, no, insane. Two reasons. No. 1, we have a $37 trillion debt … No. 2, it’s extraordinarily inflationary. It’s fiscal stimulus,” said Sen. Bernie Moreno, R-Ohio, arguing those checks would drive up prices for working-class people.

White House to preview crypto moves

The White House will tease its next moves to remake cryptocurrency regulation today when its working group on digital assets releases its long-awaited report. Already, Trump’s second administration has undone many of the crypto-related rules the Biden administration issued — and the report, six months in the making, is expected to plot agencies’ future steps, including on a crypto reserve. Another likely area of focus: crypto taxes. Sen. Cynthia Lummis, R-Wyo., who pushed for proposals like absolving bitcoin miners of reporting gains and losses in the GOP’s megabill, told Semafor the issue is “on people’s radar screens,” particularly after House Ways and Means Chair Jason Smith organized a hearing on it. Lummis and other Republican senators are asking whether they should include “taxonomy” provisions in their legislation overhauling crypto regulations.

— Eleanor Mueller

$85B deal to form largest US railroad

Union Pacific struck an $85 billion deal for Norfolk Southern — a combination that, if approved, would create the largest railroad in the US, Semafor’s Rohan Goswami reported. At $320 a share, it’s a roughly 25% premium on the 30-day average of Norfolk’s unaffected stock price, and comes after relatively quick negotiations between the two sides. The deal is one of the largest this decade, beating out Microsoft’s $69 billion acquisition of Activision Blizzard, and is expected to be greeted with an open mind by the federal agency that oversees railroad deals. Trump’s unpredictable antitrust cops will still make their feelings known; the deal will also likely face pushback from unions and railroad customers worried about increased shipping costs. But it’s worth remembering that a transcontinental railroad would fit neatly with Trump’s ambitions to reindustrialize the US.

Blindspot: Crockett and cuts

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: Rep. Jasmine Crockett, D-Texas, tried to shut down an Atlantic profile of her, according to the reporter who wrote it.

What the Right isn’t reading: The Trump administration cut more than half of the federal funding for gun violence prevention in the US, Reuters reported.

Beltway Newsletters

Punchbowl News: Texas Republicans could release their new congressional map as soon as today; one scenario has it add five new seats that President Trump would have carried by 10 or more points. At risk are Democratic Reps. Henry Cuellar, Vicente Gonzalez, Julie Johnson, Greg Casar, and Lloyd Doggett.

Playbook: Redrawing congressional maps alone won’t help the GOP hold the House in the midterms, said one Republican operative. “If we are relying on redistricting to hold the majorities, we have bigger issues.”

Axios: Trump has netted $1.2 billion in settlements “from 13 of the most powerful players in academia, law, media and tech.”

White House

• President Trump said he had been briefed on the shooting in Manhattan that left four people dead. “I trust our Law Enforcement Agencies to get to the bottom of why this crazed lunatic committed such a senseless act of violence,” he posted on Truth Social.
• The president suggested Rupert Murdoch wants to settle the suit Trump filed against his companies over a Wall Street Journal report on a bawdy greeting Trump sent Jeffrey Epstein (though Murdoch has not confirmed).

Congress

• The House Oversight Committee rejected a request from Ghislaine Maxwell for immunity in exchange for testimony about Jeffrey Epstein.
• The White House is lobbying Republicans to oppose a ban on congressional stock trading because “senators plan to offer a substitute: a bill that would extend the stock trading ban to POTUS & VP.” — Punchbowl

Outside the Beltway

• Shane Tamura, the man who killed four people in a Manhattan office building Monday, was a former high school football player who believed he was suffering from chronic traumatic encephalopathy and wanted his brain to be studied, per a note police found in his pocket. Authorities believe he may have been targeting the NFL, but took the wrong elevator.
• The Senate confirmed Emil Bove to a lifetime appointment as a federal judge for the Southern District of New York; he denied threatening lawyers involved in the corruption case against New York City Mayor Eric Adams, though a whistleblower disputes his account. — WaPo

Inside the Beltway

• The Environmental Protection Agency is officially moving forward with plans to kill a rule that gave it the authority to regulate greenhouse gas emissions.
• Defense Secretary Pete Hegseth has discussed running for elected office in Tennessee next year. — NBC

Business

• JPMorgan Chase could soon take over Apple’s credit card offering, making it the largest credit card issuer in the US. — WSJ

Economy

• US consumer confidence rose, with Americans’ expectations for the next six months jumping to the highest number since February.
• The International Monetary Fund raised its global growth forecast by 0.2 percentage points, as damage from President Trump’s tariffs so far has been milder than expected.

Courts

• The government is in possession of a copy of the surveillance video from Jeffrey Epstein’s jail cell that includes the “missing minute” cut from a previously released version. — CBS

Health

• Vinay Prasad, the FDA’s vaccine lead, is out following a pressure campaign from right-wing activist Laura Loomer.
• The Office of Management and Budget is seeking to throttle research funding to the National Institutes of Health for the rest of the year. — WSJ

National Security

• The National Security Agency’s top lawyer was fired after The Daily Wire wrote critically about her record working with Democrats. — NYT

Foreign Policy

• Prime Minister Keir Starmer says the UK will recognize Palestinian statehood unless Israel agrees to a ceasefire and allows the UN to offer aid, as famine engulfs the enclave. Additionally, foreign ministers from 15 countries — including Canada, Australia, and France — signed onto a statement expressing support for a two-state solution.
• Taiwan’s foreign ministry said President Lai Ching-te has not been blocked from the US and has no imminent plans to travel, following reports President Trump blocked him from a New York stopover.
• The breakaway region of Somaliland offered the US a critical minerals deal in exchange for diplomatic recognition.

Polls

• People’s lives are getting better: That’s the macro takeaway from new Gallup research. Across 142 countries, a median of 33% of adults rated their lives as “thriving.” Despite geopolitical conflict, climate change, and technological disruption, “some progress is being made,” Gallup wrote.

Technology

• Anthropic is trying to raise $5 billion in funding at a valuation of $170 billion, which would nearly triple its valuation in just four months.

Media

• Pop star Katy Perry was spotted having dinner with former Canadian Prime Minister Justin Trudeau. — TMZ
• The Freedom of the Press Foundation filed a complaint to investigate and potentially disbar FCC Chair Brendan Carr. — Status

Principals Team

Edited by Morgan Chalfant, deputy Washington editor

With help from Elana Schor, senior Washington editor

And Graph Massara, copy editor

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, David Weigel

Donald Trump and his grandson, Spencer Trump, as seen after the president returned to the White House from Scotland.