The Latest: Federal Reserve defies Trump, hikes key interest rate for first time in 3 years

The Federal Reserve raised its benchmark interest rate Wednesday for the first time since 2023 to quell stubbornly high inflation, a move that could prompt a sharp response from the White House. The quarter-point increase lifts the Fed’s key rate to about 3.9% and, over time, could raise borrowing costs for mortgages, auto loans, and credit cards. The move comes as Americans are already struggling with high costs for groceries, gas, and housing. Affordability has taken on a leading role in the upcoming midterm elections, just seven weeks away.

For a third time, the U.S. House has voted to end the war in Iran, approving a war powers resolution that would halt President Donald Trump’s ability to continue military action without congressional approval. The roll call was similar to earlier efforts this summer. None of the resolutions have made it to the president’s desk, where Trump would almost certainly veto the measure.

Trump is in North Carolina on Wednesday to campaign with Republican Senate nominee Michael Whatley as the former national party chairman tries to shore up his campaign against Democratic former Gov. Roy Cooper.

Here's the Latest:

Trump says higher gas prices are ‘a very inexpensive price to pay’ for Iran war

The president, moments after saying that affordability was a word Democrats “made up,” acknowledged that gas prices are “a little higher” in the wake of the Iran war.

“It’s a very inexpensive price to pay for what we’ve done,” he said, adding a moment later that it would be “even if it was a lot more.”

He said things were going well for the U.S. economically before he launched the war in late February and “I could have sat back and enjoyed it,” but he told the crowd he felt it was the right thing to do.

US again denies visas for Palestinian delegation to attend UN General Assembly

For the second year in a row, the Trump administration has denied visas for a high-level Palestinian delegation to attend the United Nations General Assembly next week.

The State Department said Wednesday that Palestinian officials, including Palestinian Authority President Mahmoud Abbas, had failed to live up to their commitments under previous agreements to seek peace with Israel.

In a statement, the department said that the Palestinian Authority had continued to pursue legal action against Israel at the International Court of Justice and the International Criminal Court and had continued to pay stipends to the families of prisoners convicted of terrorist attacks against Israelis.

“As a consequence of their failure to reform, contrary to their commitments to the United States, and their ongoing activities that undermine the prospects for peace, the United States will extend sanctions that deny visas to PLO members and PA officials” in accordance with standing U.S. law, the department said.

Despite the visa denials, the Palestinians will still be represented at the UNGA by their diplomats who are already accredited to the United Nations.

Trump blames Cooper for a high-profile murder and Helene response

The president is amplifying a false claim about a grisly North Carolina murder as he attacks Cooper on crime.

Since Iryna Zarutska, a 23-year-old who fled Ukraine, was stabbed to death on a Charlotte train, Trump has blamed Cooper and Democrats in North Carolina for the crime.

The man charged with the crime, Decarlos Brown Jr., had served time in prison and been committed for schizophrenia. But contrary to Trump’s claim that “he was released by Cooper,” Brown served his sentence and was not freed early under any Cooper policy.

Trump also called Cooper a “disaster” after Hurricane Helene inflicted widespread damage in 2024. Trump started those claims immediately after the storm, during his last presidential campaign. Cooper rejected that characterization, citing work state and local governments were doing with the Federal Emergency Management Agency.

“This is a flat-out lie,” Cooper said.

In North Carolina, Trump casts midterm choice in dire terms

The president is prone to hyperbole and absolutes when he’s framing binary choices in elections, and he’s sticking to that as he speaks in North Carolina.

“If we lose, you’re going to lose your border, you’re going to lose your tax cuts, you’re going to lose your wealth and our country is going to go through hell,” he told supporters at a rally.

It’s an event for Republican Senate nominee Michael Whatley. Trump has praised Whatley and taken plenty of broadsides at Whatley’s opponent, Roy Cooper. But Trump is otherwise sticking to defending his own presidency and Republican majorities on Capitol Hill that have largely given him what he’s wanted.

Pence pushes Congress to reassert its tariff power as Trump targets Canada

As Trump wages a trade battle with Canada, his former vice president said Congress should reclaim power outlined in the Constitution over tariffs.

“We would do well in the years ahead to get back to have the Congress reclaim its authority over taxes, whether they’re tariffs on the border or revenue from the American people,” he said during an appearance at the Economic Club of Washington.

Pence has been a fierce critic of Trump’s unilateral tariffs. He was pressed at the event about the president’s moves against Canada and recalled that Trump was a strong negotiator during a trade deal in his first term.

Pence, who campaigned for the White House briefly for the 2024 election, dismissed the notion that he would run again in 2028.

“My wife would kill me,” he quipped at the prospect.

Trump says Fed raised rates to hurt him politically

In North Carolina for a midterm campaign rally, Trump blasted the Federal Reserve board for raising rates Wednesday and called the board “very hostile” to him, though he said he still has confidence in Fed Chairman Kevin Warsh.

“The board is very hostile. They’re very political. They’re doing the wrong thing. They’re a bunch of politicians,” Trump said, later adding, “They’re raising rates to make Trump do as bad as they can possibly do.”

Trump said several times in the span of minutes, “Interest rates are too high.”

He said he talked to Warsh, whom he nominated, ahead of the vote and told him, “You might as well vote with the board because it’s not going to matter.” But the president insisted he wants Warsh “to be independent.”

Asked whether he still has confidence in Warsh, Trump replied, “I do.”

Trump suggests EU allowing Canada as associate member could be a ‘hostile act’

The president threatened to respond to the proposed move by imposing more tariffs on the bloc.

Trump conditioned his threat Wednesday on the “intention” of European leaders, saying that, “If it’s a good intention, that’s fine. If it’s a bad intention, we’ll put very heavy tariffs on Europe.” He also suggested the U.S. could cut off trade with Europe in certain areas.

Trump called the prospect of Canada joining the EU “laughable” and called America’s neighbor a “terrible trade partner.”

House approves sweeping Russia sanctions bill

The broad package of sanctions targets Russian officials and key pillars of its economy as lawmakers look to deprive President Vladimir Putin of the financial resources needed to wage the war against Ukraine. The legislation now heads to Trump to be signed into law.

It represents the most ambitious effort to support Ukraine since Trump’s return to the White House and would break nearly two years of relative gridlock on the issue following a 2024 emergency aid package. Ukrainian President Volodymyr Zelenskyy has been pushing for the bill’s passage and made a direct appeal to senators shortly before they passed it last month.

The measure sanctions Russian officials, banks and a shadow fleet of tankers that keeps Russian energy moving. It also directs Trump to impose up to 100% tariffs on the top five importers of Russian oil or natural gas, with an exception for countries that import less than 15% of Russia’s natural gas exports and have taken significant steps to reduce those imports.

Attorney General Todd Blanche speaks at campaign event for Michael Whatley

The nation’s top law enforcement official made a very unusual appearance at an expressly political event in North Carolina that is meant to bolster the Republican Party’s Senate candidate.

Blanche’s appearance Wednesday came as he’s increasingly erased the longtime independence and distance from expressly political activity that the attorney general’s office has traditionally sought to preserve.

Blanche last week spoke at the GOP’s midterm convention in Dallas.

Republican Senate candidate Michael Whatley blames economy on Democrats

Trump’s handpicked North Carolina Senate hopeful is appearing in Gastonia, outside of Charlotte, with Trump. And the former national GOP chairman is telling supporters that whatever economic pain they’re feeling isn’t the president’s fault.

“When it comes to our economy, and we talk about affordability, we talk about high prices, we talk about the ditch that Roy Cooper and Joe Biden put America in with the economy,” Whatley said.

Cooper, Whatley’s Democratic opponent, was governor from 2017 to 2025. He and Biden have been out of office almost 20 months.

Whatley has tried to thread a needle in his campaign, acknowledging that voters are paying more for gas, groceries, housing, healthcare and other consumer goods. But as a close Trump ally, he has little choice but to maintain his support for Trump’s tariffs and his Iran war that have played a part in inflation.

Park Service awards contracts to work on East Potomac golf course, Democrats say

The Trump administration quietly awarded contracts to begin work on Trump’s planned takeover of the East Potomac golf course in Washington, according to Democrats on the House Natural Resources Committee.

Rep. Jared Huffman of California, the panel’s top Democrat, revealed during a committee hearing Wednesday that the National Park Service hired a civil engineering firm to start work on the historic public golf course, with no public announcement.

Huffman accused Trump of “systematically moving” to turn the federal site “into another gilded private golf club for the mega-rich.”

A contract approved last week authorizes nearly $400,000 to a Massachusetts-based company for environmental and historic preservation compliance work. A projected construction contract is worth up to $49 million, with work to begin next year.

AI researcher says Congress has about a year to act

Dr. Geoffrey Hinton, the 2024 recipient of the Nobel Prize in physics who is often know as the “godfather of AI,” says Congress doesn’t have long to craft a response to the technological advancements.

“Maybe a year,” he told reporters after briefing lawmakers Tuesday on Capitol Hill. “But not much more than a year.”

Sen. Bernie Sanders, I-Vt., who convened the briefing, said it was “basically insane … that we’ve allowed the development of a dangerous technology that could escape human control.”

Trump says US interest rates should be “1% or less” after Federal Reserve hikes rates

The president posted on social media that the world should feel obligated to charge lower interest rates on the U.S. national debt.

He didn’t mention the Federal Reserve in his post, but the U.S. central bank hiked its benchmark rate on Wednesday to reduce inflation. Trump has long maintained that rates should be lower even though most economists have warned that drastic cuts could worsen inflation.

“Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR,” Trump said. “We are ‘carrying’ almost every country in the World, and that cannot go on any longer.”

Rates are elevated because of rising U.S. national debt and higher energy prices because of the Iran war. The interest rate on the 10-year U.S. Treasury note was above 5% in Wednesday afternoon trading.

El-Sayed meets with Senate Democrats in Washington

Senate Democratic Leader Chuck Schumer is meeting Wednesday with Abdul El-Sayed, the Democrat running for Senate in Michigan.

El-Sayed is in Washington talking with Senate Democrats after he defeated Democratic Rep. Haley Stevens, who Schumer had backed, in a primary last month. Schumer has pledged to help the Democrat even as he has run on an anti-establishment platform.

After meeting with several Democratic senators, El-Sayed said that the party is united and “we’re having really productive conversations about what it takes to win” his race against Republican Mike Rogers.

He said the party needs solidarity because “we really can take the majority back, and that path runs through Michigan,” El-Sayed said.

Turkey tells Iran’s major airline to suspend flights to the country following US sanctions

Turkish officials told Mahan Air to suspend flights Wednesday to its neighboring country, according to a person briefed on the matter, a week after the U.S. Treasury issued new penalties targeting the remaining facets of Tehran’s already beleaguered aviation ecosystem.

The person, who spoke on the condition of anonymity to discuss details not yet made public, said the decision is also a direct result of recent travels by Treasury officials to Ankara and the larger region to reinforce America’s economic campaign against Iran.

There was no official announcement from Ankara as of Wednesday afternoon, but the Turkish aviation news website, AirportHaber, had reported the details earlier.

House votes to name T. Rex as the country’s national fossil dinosaur

The legislation also names the American mastodon as the national fossil mammal of the United States.

Indiana Republican Rep. Erin Houchin said he hopes the measure inspires young people and encourages them to “put down their phones, go outside and go dig.”

The bill was approved unanimously, without a formal roll call, after a brief debate. It would next go to the Senate.

Top Democrat places hold on Trump administration’s plan to sell $2.8B in heavy munitions to Israel

The top Democrat on the House Foreign Affairs Committee says he is going to block a proposed sale of $2.8 billion in heavy weaponry to Israel over concerns that the munitions would not be used in accordance with U.S. and international law.

Rep. Gregory Meeks, D-NY, the ranking member of the committee, said he would withhold approval for the sale because of “grave, unresolved concerns about how these munitions could be used in densely populated areas of Gaza and Lebanon.”

Meeks’ objections, along with any other potential ones, will not likely affect the sale, which was informally notified to lawmakers on Tuesday, because once it is formally notified to Congress, Secretary of State Marco Rubio can bypass the normal process by making an emergency determination that the transaction is in the national security interest.

The $2.8 billion package includes 40,000 powerful 2,000-pound bombs, according to two U.S. officials and a person familiar with the plan.

Kamala Harris to campaign with Abdul El-Sayed in Michigan next week

The former vice president’s appearance with the Senate nominee comes as the Democrats push to unify voters in a battleground state that could determine which party controls Congress. The two will attend a roundtable discussion about Black maternal mortality on Tuesday, according to El-Sayed’s spokesperson.

Harris and El-Sayed have spoken multiple times since she endorsed El-Sayed after his primary victory, but this is the first time they’ll appear publicly together.

Michigan’s bitter primary highlighted divisions among Democratic voters, notably on U.S. support for Israel. El-Sayed, running on a progressive platform, beat Rep. Haley Stevens, who was backed by the American Israel Public Affairs Committee, by about 1 percentage point.

Some other top-ranking Democrats have joined the unification effort. Former Transportation Secretary Pete Buttigieg urged a crowd of hundreds in Detroit last month to vote for Democratic candidates down the ballot.

White House chief of staff Susie Wiles says she is cancer-free

Wiles said in a post on the social platform X on Wednesday that her pathology results came back clear.

Wiles, 69, announced in March that she had been diagnosed with early-stage breast cancer and that she would remain in her position while seeking treatment.

She is a longtime Trump ally who rose from his campaign co-chair to become his closest adviser and counsel.

FBI, Coast Guard board 2 U.S-bound oil tankers following indications of cyberattacks

The FBI and Coast Guard boarded two oil tankers bound for the United States to investigate following indications that cyberattacks had compromised the ships’ networks, officials said Wednesday.

The FBI said in a statement that investigators on Aug. 21 and Aug. 24 responded to reported network breaches of two foreign-flagged commercial oil tankers, and that a multi-agency team of cyber experts boarded both vessels in the Gulf of America to assess potential harm to the ships’ operational and information technology systems.

“Currently, there are no reports of operational disruptions, vessel instability, physical danger to crews, or environmental impacts,” the statement said, adding that the crews of both ships had cooperated with the investigations.

The FBI statement did not identify a potential culprit of the breaches.

Fed chair stays mum on Trump wanting rate cuts, instead of rate hikes

Warsh declined to say what message he sent Trump after the central bank raised its benchmark interest rate to curb inflation.

Trump has repeatedly called for rate cuts and attacked Warsh’s predecessor, Jerome Powell, on social media for not lowering rates. Higher rates generally lower inflationary pressures, while lower rates can foster more growth and rising price levels.

“I’ve got nothing for you on a discussion with the president,” Warsh told reporters at a news conference.

Fed chair portrays rate hikes as an optimistic sign for US economy

Warsh said the economy appears resilient and the labor market is strengthening, which is why Fed officials felt comfortable raising the benchmark interest rate to combat elevated levels of inflation.

The Federal Reserve chair said he “would be hard pressed to describe broad financial conditions as restrictive,” so officials agreed a rate hike would not hurt the economy as the Fed tries to return inflation to its 2% target.

Fed officials separately estimated median inflation of 3.7% this year.

“Given that resilience and the potential for even greater performance, an attitude of optimism is exactly what I heard,” in the two-day meeting among Fed officials, Warsh said.

Fed hikes key rate for first time in 3 years despite Trump demands for a cut

The rate hike is a surprising turnaround for Fed Chair Kevin Warsh, who was appointed by Trump and took over the top job in May. Warsh often suggested last year when under consideration by Trump that the Fed could reduce its key rate, echoing the president’s call for lower borrowing costs.

And in April, when Warsh’s nomination was under consideration by the Senate Banking Committee, Trump said in a television interview that he would be disappointed if Warsh didn’t cut rates. On the same day, however, Warsh told the committee he did not promise Trump he would cut rates and said he would be “an independent actor” as Fed chair.

Yet the ongoing disruptions from the Iran war, which have pushed up average gas prices more than 7% from just a month ago, threaten to spread through the economy and keep broader inflation stubbornly high.

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