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 will travel to 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 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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House nears vote on Russia sanctions bill named after late Sen. Lindsey Graham

The House will soon vote on a broad package of sanctions targeting Russian officials and key pillars of its economy as lawmakers look to deprive Russian President Vladimir Putin of the financial resources needed to wage the war against Ukraine.

The bill is named after Graham, the late South Carolina senator who spent more than a year working on it.

If the House passes it on Wednesday, it would then go to President Donald Trump to be signed into law.

The bill represents the most ambitious effort to support Ukraine since Trump returned to the White House.

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Fencing goes up around the main Kennedy Center building

The fencing went up Wednesday, a day after the Trump-aligned board voted to close most of the performing arts center for repairs.

That vote came after a federal judge blocked the institution from returning Trump’s name to the building.

The Republican president had said in a social media post that the closure was necessary for safety repairs. But he said the repairs, which Congress has allocated $257 million to cover, would proceed only if the board was permitted to move forward with plans to add his name to the building.

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Saphier hearing has ended

The Senate health committee hearing adjourned after Saphier was questioned about vaccine safety and whether she would follow the law or potentially unlawful orders from administration officials.

Saphier said she would follow the law.

Carney received a standing ovation at the European Parliament

Canada has retaliated against U.S. tariffs and rejected trade terms that Carney says would weaken its sovereignty. The EU has taken a different course, reaching a trade agreement with the Trump administration that set a 15% U.S. tariff ceiling on the vast majority of EU exports even as Europe eliminated tariffs on U.S. industrial goods.

That contrast has loomed over Carney’s push for closer European ties. In a closely watched speech at the World Economic Forum in Davos in January, he urged middle powers to work together to increase their leverage in an era of great-power rivalry.

“When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what is offered,” Carney said. “It is the performance of sovereignty while accepting subordination.”

Carney’s Davos speech drew a personal rebuke from Trump, and von der Leyen’s overture to America’s neighbor could raise the temperature again.

European Commission president wants Canada to become the EU’s 1st associate member

Ursula von der Leyen made the striking overture as Trump’s threats drive Ottawa closer to Europe.

Trump’s tariffs and repeated talk of making Canada the 51st state have soured the relationship between the North American neighbors. Canada is seeking to reduce its dependence on the United States, the destination for roughly 70% of its exports, and Prime Minister Mark Carney has called for a “unique alliance” with the EU.

In her annual State of the European Union address on Wednesday, von der Leyen said Canada and the EU would build on their existing free trade agreement, known as CETA, with a broader “Alliance for the Future” aimed at creating “a common prosperity and economic security space,” rooted in shared democratic values.

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Mamdani says he won’t protest Netanyahu at UN

New York City Mayor Zohran Mamdani says he’ll skip any possible protests of Israeli Prime Minister Benjamin Netanyahu at the U.N. General Assembly next week.

The Democrat told reporters “I do not have any plans to attend any protests at the U.N. General Assembly” when asked about Netanyahu’s incoming visit, instead saying he is focused on security and getting the city ready to host world leaders.

Mamdani has been a fierce critic of Netanyahu and Israel’s military actions in Gaza, saying during his campaign that he would direct the city’s police to arrest the prime minister under the International Criminal Court’s warrant over his role in the war in Gaza. Mamdani later acknowledged that the city lacks such authority.

Netanyahu is expected to arrive late on Sept. 23, address the General Assembly the next day and fly back to Israel that night, according to Israel’s U.N. envoy.

Trump administration still plans signs outside of Smithsonian museum

Trump signed an executive order in July calling for signs outside the Smithsonian’s National Museum of American History warning of what it argues are exhibits that present history inaccurately.

Though none have appeared, Interior Secretary Doug Burgum recently told Sen. Jeff Merkley they’re still happening.

“The purpose of these signs is straightforward: Americans should enter the NMAH with relevant information about curators’ interpretation of history and their stated goal of changing the viewpoints of visitors to the museum,” Burgum wrote in a Sept. 3 letter to Merkley. The Atlantic first reported Burgum’s letter.

The Smithsonian is in the midst of a leadership change after Lonnie Bunch announced plans this month to step down as secretary. In an interview with the AP last week, Anthea Hartig, the American history museum’s director, expressed faith in the institution’s ability to do its work.

“I wake up every day confident in Americans’ ability to embrace the complexities of their past,” she said.

House Democrats vow to ‘end this national nightmare’ in midterm pitch to voters

Standing on the Capitol steps before lawmakers head home to campaign, House Democratic Leader Hakeem Jeffries assailed the “do nothing” Republican majority and promised Democrats will do better.

“Donald Trump and MAGA Republicans promised to bring down grocery prices on Day One. They promised to stop endless wars in the Middle East,” Jeffries said. “But Republicans have done nothing to make life more affordable for the American people.”

He said the Democrats’ message is simple: “We hear you… And we are committed to making life better for you.”

Jeffries also warned that it’s time for the corruption to end: “House Democrats are going to hold the crooks accountable.”

Saphier is confronted about her stance on vaccines

Sen. Cassidy asked Saphier what her message would be to parents on vaccines, in light of Trump’s comments on the causes of autism. Trump and Secretary Kennedy have repeatedly suggested a link between childhood vaccines, such as the MMR vaccine, and the development of autism, even tough studies by the CDC and others have ruled that out.

“I don’t know what causes autism, but I have not seen reputable evidence that would suggest that vaccines cause autism.” Saphier told Cassidy, “I can tell you that I do not believe the MMR vaccine to be lethal. I believe the MMR vaccine is our greatest tool for combatting measles.”

If confirmed, Saphier will be in the difficult position of navigating Kennedy’s efforts to scale back vaccine guidance at a time when the U.S. is enduring its worst year for measles in decades.

White House readies for Chinese leader Xi Jinping’s visit next week

The military honor guard and members of “The President’s Own” U.S. Marine band have been practicing on the Pennsylvania Avenue side of the White House for Xi’s Sept. 24th state visit.

Trump also has said the helipad he had built on the South Lawn is ready. The black and white granite landing pad mimics the official seal of the President of the United States. Trump had wanted it finished in time for Xi’s visit.

Work on columns and the doors of the North Portico was completed recently.

Xi will also be the guest of honor at a White House state dinner that evening.

Saphier focuses on illness prevention in her opening statement

“We spend too much time and resources treating chronic disease after it takes hold, and not enough time helping Americans reduce their risk before illness begins,” Saphier said. “We should treat illness when it occurs, but we also need to do a far better job of helping people stay healthy in the first place.”

Saphier gets bipartisan warnings as her confirmation hearing begins

At the start of the Senate health committee hearing, chair Sen. Bill Cassidy noted the “serious health issues” facing the country, highlighting the measles deaths.

“That is going to be a terrible legacy for this administration,” said Cassidy, R-LA, telling Saphier and other nominees that he hoped they would restore the public’s confidence in public health.

Sen. Tammy Baldwin, D-WI, said HHS Secretary Robert F. Kennedy Jr.’s “career spreading vaccine conspiracy theories” has contributed to the outbreak.

“We need leaders who will stand up for science,” Baldwin said.

Dr. Nicole Saphier, Trump’s 3rd surgeon general pick, faces Senate grilling

A radiologist and former Fox News contributor is facing lawmakers as Trump’s third nominee for surgeon general.

The position known as the nation’s doctor has been vacant throughout Trump’s second term. The confirmation of entrepreneur and wellness influencer Dr. Casey Means stalled over her background and vaccine views. Trump withdrew the nomination of Fox News medical contributor Janette Nesheiwat after her academic credentials were questioned.

Dr. Nicole Saphier is director of breast imaging at Memorial Sloan Kettering Monmouth, according to her profile on the New York-based institution’s website, which says she earned her medical degree from Ross University School of Medicine in Barbados.

Senators are likely to question her views on vaccines and her ownership of DropRx, which produces controversial, unregulated tinctures — concentrated liquid extracts promoting focus and calm — that contain ingredients, including kava kava root, described by the FDA as potentially causing severe liver injury.

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Wall Street is edging higher as it waits to hear from the Federal Reserve

The market’s main event is coming later in the day, when traders expect the Fed will announce the first hike to interest rates in three years. They’re counting on the central bank to try to cool the inflationary pressures caused by the global energy crisis driven by Trump’s war on Iran.

U.S. data released last week shows inflation remains stubbornly high, and a gallon of gasoline in the U.S. rose again overnight, hitting $4.37 on average, according to motor club AAA. A week ago, gasoline averaged $4.22 a gallon. Diesel, which topped $6 a gallon on Friday, is now $6.31 a gallon on average, up from $5.94 a week earlier.

The stock market also is under pressure from higher U.S. Treasury yields, which have risen as the government finances the growing U.S. national debt.

Tune in: House approves bill requiring AM radios in cars

The House overwhelmingly passed the AM Radio for Every Vehicle Act, which would require the Transportation Secretary to issue a rule require the devices as standard equipment in new vehicles sold in the U.S.