Not Funny

 

Bad-to-Worse

Trump’s Bad-to-Worse Options on Epstein

There are no good solutions — but some are better than others.

By Ankush Khardori

The Trump administration has been flailing as it struggles to contain the fallout from its handling of the so-called Epstein files. Is there a way out?

Even on an overseas trip, President Donald Trump couldn’t escape persistent queries from the press about his relationship with the late convicted sex offender Jeffrey Epstein. Some of those answers — like Trump’s statement on Tuesday that he cut ties with Epstein because the predator hired young women away from Trump’s Mar-a-Lago spa — raise more questions.

Lawmakers on both sides of the aisle aren’t letting go either. Speaker Mike Johnson shut the chamber down in an effort to halt a minor revolt among his members and avoid uncomfortable votes on Epstein-related measures, but that may only have prolonged the GOP’s discomfort until September, when the House returns.

Public polls indicate that roughly 60 percent of the American public disapprove of Trump’s handling of the situation. A paltry 16 percent approve, according to a Washington Post poll released this week.

Meanwhile, the administration’s latest gambit — engaging with Ghislaine Maxwell — is getting messier. Maxwell, the only person convicted in the underlying scheme since Epstein died, has started making demands as a condition for giving testimony before the House Oversight Committee. (This is what happens when you give a criminal like Maxwell leverage: They try to use it.) The committee has declined to give Maxwell congressional immunity, but negotiations over the terms of a deposition are apparently ongoing.

The Justice Department and House Republicans could have avoided the embarrassment of publicly negotiating with a convicted child sex trafficker and confirmed liar, but Maxwell’s involvement is now dangling until who knows when. Deputy Attorney General Todd Blanche, who apparently thought it was a good idea to spend two days interviewing her, has promised to “share additional information about what we learned at the appropriate time.”

The whole thing has unfolded like a lesson in how to mismanage a political crisis. Making matters worse, Trump does not appear to have any good options for moving on from this controversy, in large part because of the legal complexities that surround the case.

Below are a few of the potential paths forward, from staying the course to releasing everything to a few options in between. All have conspicuous downsides for the administration, the public or both, but it’s worth going through them.

Status Quo

Right now, the administration has two open lines of pursuit as it seeks to mollify critics who want more insight into the Epstein files: (1) unsealing grand jury transcripts from the criminal prosecutions, and (2) working with Maxwell as a potential government cooperator to obtain new information or leads that might shed further light on Epstein and Maxwell’s deeds and the involvement (or lack thereof) of other people.

Neither of these efforts is likely to prove particularly fruitful or satisfying to the public writ large.

The grand jury transcripts likely represent just a sliver of the information in the government’s possession. That is because when prosecutors present testimony to a grand jury in order to obtain an indictment, they focus on the particular defendants and co-conspirators at issue and the evidence that they are likely to introduce at trial. If there was no evidence presented at trial about other particular individuals or subjects, it is fair to assume that they were not the subject of much grand jury testimony.

Indeed, in court filings on Tuesday night, the Justice Department disclosed that there were only two witnesses who testified in the grand jury proceedings, an FBI agent and NYPD detective. It is routine for federal prosecutors when charging criminal cases to present grand jury testimony from only one or more of the government agents who worked on the investigation; but as a result, the odds are low that they would have provided materially more information to the grand jury than was presented in the indictment or introduced as evidence in the trial.

As for Maxwell, she is a particularly bad candidate to serve as a government cooperator, and it is unlikely that the Justice Department’s engagement with her will generate credible information that the government can credibly rely or act upon.

Maxwell is in prison on a 20-year sentence on heinous charges. At trial, the government presented evidence from victims who testified — in the government’s own words in a sentencing submission just three years ago — that Maxwell and Epstein “worked together to identify girls, groom them, and then entice them to travel and transport them to Epstein’s properties” and that the “girls — some of whom were as young as 14 years old — were then sexually abused.”

On top of that, the DOJ already discredited Maxwell as someone who would speak honestly and charged her with two counts of perjury (later dropped after the trafficking conviction). Prosecutors said that Maxwell was willing to “brazenly lie under oath about her conduct.”

The conduct at issue is also so old — going back more than three decades — that it would be difficult to corroborate Maxwell’s claims. Over time, witnesses’ memories fade and documents become harder to track down.

And of course, Maxwell has an obvious incentive to lie or shade the truth — both by pointing the finger at others and downplaying Epstein’s connection to people who are politically aligned with the Trump administration, or Trump himself. Trump, as we now know from the Wall Street Journal’s reporting, was told in May that his name was in the files, though he has not been accused of any wrongdoing in the matter.

As a political matter, the exercise also seems highly risky. Maxwell is angling for a pardon or reduction in her sentence. If that were to happen — if the Trump administration were to provide Maxwell with an early release or pardon her altogether — some people could interpret this as confirmation of the very government-backed conspiracy that the administration has been trying to refute, that powerful child sex predators work with and protect one another. Indeed, according to one poll released this week, only 4 percent of respondents — that is not a typo — said that Trump should pardon Maxwell.

It is also always possible — perhaps even likely — that the controversy will eventually blow over at some point or be overtaken by some other all-consuming political story. That may not, however, undo whatever political damage has been done in the meantime.

Legislation

The bipartisan odd couple of Reps. Thomas Massie (R-Ky.) and Ro Khanna (D-Calif.) have proposed a measure that would effectively force the government to publicly release virtually all of the unclassified material in the government’s possession, with redactions for victim-related information, as well as internal DOJ communications. Similar measures could emerge in the coming weeks.

If Trump for some reason decided to endorse the bill, it would surely pass. But on the merits, it is not a good idea to dump all of this material in the public domain.

The government does not typically release raw investigative material from criminal cases — and with good reason. The government acquired mountains of information in the course of its investigation, including a large amount of material gathered from electronic devices. The government’s investigative material would also include FBI summaries of witness interviews that could include false leads and derogatory information that the government was unable to corroborate.

Releasing all of this material might offer some short-term relief in the sense that the Epstein files would finally be out. But in fact, it would simply prolong this drama and provide more fodder for more baseless conspiracy theories, potentially for years to come and with no end in sight.

Self-Disclosure

The Trump administration could also choose to voluntarily release the same material at issue in the Massie-Khanna legislation. That would be unwise for the reasons noted above.

On top of that, the Trump administration’s haphazard efforts in recent weeks have probably burned its public credibility on this topic among a sizable contingent of Americans. After spending years cultivating and promoting theories about an elaborate and wide-ranging child sex trafficking conspiracy, some of America’s most senior law enforcement officials have struggled to debunk their own nonsense while also appearing to suppress information about what they found.

There will be many people who do not trust the output if the administration tries to self-disclose and who will believe that government officials are withholding information about political and financial elites, including perhaps Trump himself.

Firings

Perhaps Trump could try one of his time-tested tactics: Firing people or otherwise forcing them out of their positions.

The most obvious candidates for the chopping block would be Attorney General Pam Bondi, FBI Deputy Director Kash Patel and FBI Deputy Director Dan Bongino.

It is far from clear what dismissing Bondi would accomplish. Yes, she made some conspicuous missteps — like orchestrating a botched “Phase 1” release of material to conservative influencers at the White House back in February — but the next attorney general would face even more pressure on the issue and confront the same political minefield that Bondi has attempted to navigate.

Patel and Bongino are in a slightly different category because they were instrumental in advancing Epstein conspiracy theories prior to Trump’s election. But at this point — even assuming that Trump were inclined to remove one or both of them, which is far from clear — it seems unlikely that removing them would solve the administration’s problems.

By now, the situation has spiraled way beyond those two men.

A Blue-Ribbon Commission

What about establishing a bipartisan commission, akin to the one that investigated the terrorist attacks on Sept. 11, 2001? They could review the material in the DOJ’s possession and report to the public on what is — and isn’t — in there.

The notion of convening a blue-ribbon panel of respected Washington figures is a political cliché, of course, but in this case, it may be a tempting idea, particularly given the fact that both the Republican and Democratic Parties arguably lack the widespread public credibility that would be necessary to do something similar on their own within Congress.

Problems, however, would quickly arise. For one thing, the effort would prolong things even further, at least until the commission completes its work.

As we saw with the Jan. 6 committee, there would also likely be serious disputes about who should sit on the committee. Should one or more prominent Epstein conspiracy theorists participate in order to lend some credence to the findings among skeptics, or would that fatally undermine the ability of the commission to do its job?

A Major Press Conference

Perhaps the best of the bad options is for the most senior law enforcement officials — Bondi, Patel or both — to give a press conference in which they provide a credible and confidently delivered readout of the government’s investigative work and answer all of the questions posed by the media. Stay for as many hours as it takes.

But for this to work, Bondi and Patel would have to fall on their swords.

They would need to explain in detail exactly what they did in recent months to review the investigation, and they would need to describe with greater precision what is in the government’s possession and what it does and doesn’t reveal about the broader conspiracies alleged by skeptics. They would need to firmly and definitively explain that the conspiracy theories that they cultivated are wrong.

Crucially, they would also need admit that they were wrong to promote and indulge those conspiracy theories themselves. And at this point, they would need to disclose — even if it’s in generalized form — what the Wall Street Journal has reported is in the government’s possession that concerns Trump himself.

The overriding problem with this proposal, apart from Bondi and Patel’s willingness to do this, is that the public can no longer trust them on this subject. They have burned their credibility on the issue across the political spectrum, and people will be justifiably skeptical about whether they are receiving a complete and accurate account.

There is at least one clear takeaway from all of this and from the absence of any clear path forward for the administration: Trump officials never should have promoted or endorsed the Epstein conspiracy theories in the first place, despite whatever political or electoral upside they thought it provided.

Doing so was reckless and irresponsible, and it fell far below the professional standards that should apply to our most senior law enforcement officials. In hindsight — if not in real-time itself — their promotional efforts appeared craven, self-interested and highly distasteful.

Lest we forgot, there were actual victims here. They should not be political pawns, and they should not have become the subject of a years-long, ongoing political campaign that has, among other things, extended and re-publicized the horror of what they experienced.

Still, the original and most significant political liabilities were created by Trump.

No one forced Trump to associate with a creep like Epstein for years. No one forced him to tell New York magazine for a story in 2002 that Epstein was a “terrific guy,” and that “It is even said that he likes beautiful women as much as I do, and many of them are on the younger side.” And no one forced him to endorse the release of the Epstein files as he was campaigning for reelection in a way that riled up members of his base but also lent further support to conspiracy theorists and grifters.

On top of that, no one forced Trump to select a vice president and senior law enforcement officials with their own baggage on this topic and whose comments over the years have practically been playing on a news media loop for the last few weeks. It is not surprising that the sort of people who behaved this way would now struggle to hold the public’s confidence on this subject or to portray themselves as credible, sober-minded and responsible public officials.

These were all choices that Trump made himself. No amount of baseless finger-pointing or blame-shifting — at Democrats, the media or anyone else — can change that.

Love a weak dollar

Why investors love a weak dollar (for now)

“You make a hell of a lot more money with a weaker dollar,” said President Trump.

By Sam Sutton and Victoria Guida

This story first appeared in Morning Money: Capital Risk, a reimagined Friday edition of our essential Morning Money newsletter. Designed to bring sharper insight into how political and policy developments are moving markets, affecting risk and rippling through the economy, Capital Risk offers urgent reporting tailored to what risk-minded professionals need to know now. If you like this reporting, sign up for Morning Money today.

The dollar has fallen by about 8 percent since Donald Trump took office. Setting aside whatever that may say about investor confidence in U.S. trade policies or fiscal deficits, it has been pretty great for stocks.

“It’s truly a sugar rush,” said Mark Hackett, chief market strategist at Nationwide.

If you’re a multinational business, “you love a weaker dollar,” he said. “Not only does it [help] you compete globally, but you also get this immediate sugar rush from translating foreign earnings back into your income statement.”

Put another way, if U.S. companies simply maintained prices on products they sell abroad, the greenback’s decline has enabled them to repatriate the proceeds of foreign sales made with local currencies into more dollars than they would have had the same transaction occurred before Trump’s inauguration.

That’s music to the ears of Trump, who has said he wants “not a weak dollar, but a weaker dollar.” That’s why he and his administration aren’t leaning against this trend.

“You make a hell of a lot more money with a weaker dollar,” he told reporters recently. “When you have a strong dollar, you can’t sell anything. It’s only good for inflation, and it’s good psychologically. It makes you feel good.”

As Trump suggests, companies that generate a lot of foreign revenue — including tech powerhouses that help drive the stock market’s overall performance — are seeing real gains from these currency moves. The 100 largest companies listed on the tech-heavy Nasdaq exchange generate about 45 percent of their revenue abroad, according to Goldman Sachs. For companies on the S&P 500, non-U.S. sales represent a hefty 28 percent of revenue.

Last week, Netflix Chief Financial Officer Spencer Neumann told analysts that the softer dollar was a factor in the streaming service’s decision to raise its full-year earnings forecast. Mark Zuckerberg’s Meta has also lifted its third-quarter projections thanks in part to a currency-related boost.

“It’s particularly good for service exporters,” said Kenneth Rogoff, a Harvard professor and former chief economist at the International Monetary Fund who has written extensively about the dollar. “In some sense, that’s what Big Tech is.”

In other words, the president is getting the Secret Deodorant currency he’s always desired: soft enough for companies to bank profits overseas, strong enough to preserve its status as a primary currency for central bank reserves and cross-border transactions.

But policies out of Washington might not be able to sustain this equilibrium.

If the same factors that influenced the dollar’s recent decline — such as the often confusing direction of U.S. policy — fester, the result could be more inflation as consumer purchasing power degrades.

Uncertainty about trade arrangements, after all, is far from over; despite Trump’s recent trade agreements with the European Union and Japan, he still has an itchy trigger finger when it comes to raising taxes on allies like India. And ever-increasing tariffs could encourage the drift of capital to other markets, boosting U.S. export prospects but weakening the dollar further.

If prices start to surge, it could force the Federal Reserve to keep rates higher for longer. Investors “are missing not even the long-term, but medium-term cost of tariffs, which are going to come sooner than they are pricing it,” said Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center.

On the flip side, if bigger profit margins push up domestic stocks — particularly tech giants that are spending heavily on powerful artificial intelligence capabilities — it could reinforce investor notions that the U.S. economy and financial markets will continue to dominate, Steve Englander, head of global G10 FX research and North American macro strategy at Standard Chartered Bank, told POLITICO. That’s good for the dollar and could potentially reverse some of the sugar high.

Notably, the Treasury Department isn’t endorsing a weak dollar, though they don’t mind the downward drift. Joseph Lavorgna, who serves as counselor to Treasury Secretary Scott Bessent, said the dollar is still strong despite having dropped relative to other currencies, particularly the euro.

“The real broad trade-weighted dollar was very high, and it has weakened off of near-record levels,” he said.

He said preserving the country’s reserve currency status, and Treasury securities’ central role in global markets, is key to the department’s approach. Otherwise, “the ultimate goal is just to produce a strong economy that lifts wages across the board with inflation moderating.”

In the meantime, if a slightly weaker dollar continues to help earnings and share prices for blue chip U.S. companies? The administration will take it.

Goes after Susan Collins

Trump goes after Susan Collins for her voting record

Collins, a target for Democrats in 2026, voted against key Trump legislative items.

Aaron Pellish

President Donald Trump is going after Republican Sen. Susan Collins despite hopes among some in the party that she will run again next year and help the GOP hold the Senate.

Trump, who has privately discussed finding someone to run for her seat, attacked the Maine senator’s voting record in a post on Truth Social.

The senator has voted against two of Trump’s signature legislative achievements this year — the domestic policy megabill and the measure to claw back $9 billion in foreign aid and public media funding.

“Republicans, when in doubt, vote the exact opposite of Senator Susan Collins,” Trump said. “Generally speaking, you can’t go wrong.”

Democrats have targeted Maine seat as one of a small number of opportunities to pick up a Senate seat in 2026. The party has won all of the state’s electoral votes in every presidential election since Collins was elected in 1996.

Collins, who chairs the Senate Appropriations Committee, has yet to announce whether or not she will run for reelection.

Blocks FBI funding bill

Van Hollen blocks FBI funding bill from floor debate over Trump headquarters dispute

The Maryland Democrat said Republicans worry the president will “throw a fit” if they meddle in his headquarters decision.

By Katherine Tully-McManus and Jennifer Scholtes

The simmering dispute over the FBI’s future headquarters derailed Senate efforts Thursday night to launch floor debate on the legislation that funds the agency, as well as the departments of Commerce and Justice, NASA and science programs.

Sen. Chris Van Hollen objected Thursday night to including the bill in a larger package of funding measures. The Maryland Democrat demanded that the Senate agree to adopt language that would require the FBI to meet a specific security threshold for its headquarters, as the Trump administration keeps the agency in downtown Washington instead of relocating it to the suburban Maryland campus previously selected after a yearslong competition.

But Sen. Jerry Moran (R-Kansas), who chairs the funding panel that handles the bill, shot down that request on the Senate floor Thursday night, after the dispute over the FBI headquarters already snagged committee action on the bill.

Tearing up as he spoke on the floor, Moran said he knows “no path forward” that would allow Van Hollen’s amendment. “Our appropriations process is fragile,” he said.

If Van Hollen, who serves as the ranking member on the Commerce-Justice-Science Subcommittee, hadn’t objected, his amendment would have been teed up for a vote. But Van Hollen didn’t want to take the risk that the language would not have been adopted.

“That is a simple request that I would have thought all of us could stand behind,” Van Hollen said, “making sure that the new headquarters of the men and women of the FBI meets the security requirements that we and they have set out.”

Senate appropriators already killed another amendment Van Hollen proposed in committee, which would have barred the Trump administration from dipping into a $1.4 billion construction account for anything besides relocating the FBI to the previously selected site. After the proposal was initially adopted, the committee later voted to strike the language because so many Republicans were threatening to tank the underlying bill if it rebuked Trump on the headquarters decision.

“We did it because the president of the United States was going to throw a fit if that provision stayed on, that’s why people reversed the position,” Van Hollen said on the Senate floor Thursday night. “And we shouldn’t make our decisions out of fear about what somebody in the White House is going to do, because that distorts the entire process here in the United States Senate.”

Moran’s Thursday evening request was to tie together four bills to fund the government for the fiscal year that begins Oct. 1. Those bills would collectively fund the departments of Veterans Affairs and Agriculture, as well as military construction projects, the operations of Congress and the FDA. The Kansas Republican touted that those four measures had made it through the full Senate Appropriations Committee with bipartisan support and “in some instances, unanimously.”

39 percent tariff.

Trump to Swiss: Happy holidays! Now pay a 39 percent tariff.

Washington adds insult to injury by imposing sky-high measures — and then congratulating the Alpine republic on its national holiday.

By Douglas Busvine

Congratulations on your national day. Here’s a massive tariff.

That was the one-two punch delivered by the United States, after it hit Switzerland on Thursday with the highest tariff on any European nation.

Following up on Friday, U.S. Secretary of State Marco Rubio issued a statement praising the “strong and steady relationship” between the two nations.

“Our cooperation spans trade, finance, and security areas where Swiss leadership and reliability continue to make a global impact,” Rubio went on. “We wish the Swiss people a successful and meaningful celebration and look forward to continued collaboration in the years ahead.”

Normally on Aug. 1, the country of 9 million commemorates the founding of the Swiss Confederation in the year 1291. As on July 4 in the U.S., people celebrate with fireworks and parades.

The Swiss might not be in the mood this year, though, after coming off far worse than the EU, which struck a last-minute deal with President Donald Trump to lock in a 15 percent baseline tariff. The U.K. meanwhile pays 10 percent.

Although U.S. Treasury Secretary Scott Bessent visited Switzerland for trade talks in May, they were with Chinese officials. That has left the Alpine nation, and its big financial and pharmaceuticals sectors, out in the cold.

The Federal Council, the country’s collective government, expressed “great regret that, despite the progress made in bilateral talks and Switzerland’s very constructive stance from the outset, the U.S. intends to impose unilateral additional tariffs on imports from Switzerland.”

“Switzerland has been and remains in contact with the relevant U.S. authorities. It continues to seek a negotiated solution with the U.S. that accords with Swiss law and its obligations under international law,” it said on X.

The new Swiss tariff is even higher than the 31 percent that Trump first announced on “Liberation Day” back in April. It is due to take effect on Aug. 7, leaving just a week to negotiate a less-bad deal.

Gets heated

GOP’s summer town hall push gets heated

Rep. Bryan Steil faced a hostile crowd.

Meredith Lee Hill

House Republicans are beginning to face rowdy town halls as they try to sell President Donald Trump’s sweeping tax and spending law.

Rep. Bryan Steil of Wisconsin had a hostile crowd Thursday night, with jeers and boos from the audience, according to local media reports. Democratic organizers in particular spoke out against Steil. Attendees pressed him on topics spanning from Trump’s tariffs to immigration.

“It’s completely fine that we disagree,” Steil said, according to the Milwaukee Journal Sentinel, and urged attendees to “help us engage in a more productive dialogue.”

NRCC Chair Richard Hudson discouraged GOP members from holding in-person town halls earlier this year amid backlash to the Trump administration’s DOGE cuts and Republican plans to cut Medicaid spending. But Hudson and the NRCC recently started advising members to aggressively sell Trump’s big domestic policy law to constituents over August recess — though they didn’t explicitly mention town halls.

Rep. Mike Flood of Nebraska is holding a town hall in his district on Monday. In an interview this week, he predicted it could be another unruly crowd if it’s “along the lines” of his last in-person town hall, which included heated encounters with constituents over the GOP megabill and Trump.

Asked if he expected questions on the GOP’s Medicaid spending cuts in the megabill, Flood said: “I do.”

Cuts UCLA research funds.. Why????

Trump administration cuts UCLA research funds

The head of the storied California university said it had been notified by the federal government that “certain research funding” is being suspended.

By Zach Montellaro

The Trump administration is cutting research funding from UCLA, the university’s leader announced, the latest prestigious university to be targeted in President Donald Trump’s war on higher education.

In a letter to the campus community Thursday night, university Chancellor Julio Frenk said the school had been notified that the National Science Foundation and the National Institutes of Health, along with other agencies, are “suspending certain research funding” to the school.

“This is not only a loss to the researchers who rely on critical grants,” Frenk wrote. “It is a loss for Americans across the nation whose work, health, and future depend on the groundbreaking work we do.”

Frenk’s letter said “hundreds of grants may be lost” but did not provide further details on the scope, but the Los Angeles Times reported that it accounted for about $200 million in funding. POLITICO has not independently confirmed that number, and spokespeople for UCLA and the U.S. Education Department did not immediately respond to a request for comment.

UCLA is the latest university to come under fire from the Trump administration, which purports it is targeting elite colleges and universities in an effort to root out antisemitism in higher education.

The Trump administration has been locked in conflicts with several universities over similar cuts — including most notably Harvard. There are interlocking legal battles to stop the Trump administration’s efforts to block foreign students from attending the university and to restore the flow of billions of dollars worth of federal grants.

Several major universities have agreed to significant settlements with the administration in order to get their funding restored, including Columbia University and Brown University earlier this week. Frenk wrote that the university is “actively evaluating our best course of action.”

In his letter, Frenk — who is Jewish and recounted that his paternal grandparents and father left Germany in the 1930s to escape that “climate of antisemitism and hate” — says the administration “claims antisemitism and bias as the reasons” for the cuts to UCLA.

“This far-reaching penalty of defunding life-saving research does nothing to address any alleged discrimination,” he wrote.

The funding cut to UCLA comes just three days after the university agreed to a $6.5 million settlement in a lawsuit with Jewish students and a professor, who alleged that the university did not do enough to protect them from harassment and discrimination by pro-Palestinian protesters last year.

On that same day, the Department of Justice alleged that UCLA had violated federal civil rights law in its response to the encampments on campus.

“We share the goal of eradicating antisemitism across society. Antisemitism has no place on our campus, nor does any form of discrimination,” Frenk wrote Thursday. “We recognize that we can improve, and I am committed to doing so.”

Through the beginning of his second term, Trump and other administration officials have used the power of the federal government to target his perceived critics and enemies. In addition to the targeting of major universities, his administration has launched investigations into former government officials from past administrations and attacked law firms that have represented clients the president dislikes.

Isn't as good

The job market isn't as good as we thought. There might be an upside for Trump.

Emerging signs of an economic slowdown could help spur the Federal Reserve to cut rates to ease off the economy as soon as September.

By Victoria Guida

The odds that President Donald Trump will get an interest rate cut soon just went up. But not for the reasons he wants.

The U.S. economy added 73,000 jobs in July, according to new data from the Labor Department, a weaker number than economists were forecasting. Revisions also point to a much weaker job market during the second quarter of the year than previously reported, suggesting elevated rates and the president’s trade war are beginning to take a toll.

Those emerging signs of an economic slowdown could help spur Federal Reserve Chair Jerome Powell to cut rates to ease off the economy as soon as September.

The government now estimates that employment only increased by 33,000 total over the months of May and June, 258,000 fewer jobs than previously estimated. Those are massive revisions that the Labor Department acknowledged were “larger than normal.”

The jobs report follows data earlier this week showing that spending by households and businesses slowed during April, May and June. Taken together, the data paints a picture of a slowing economy.

“What’s more concerning is that with negative impact of tariffs only just starting to be felt, the coming months are likely to see even clearer evidence of a labor market slowdown,” said Seema Shah, chief global strategist adt Principal Asset Management.

Trump has been relentlessly pressing Powell to lower rates, arguing that it would lower interest costs for the government and bring down mortgage rates. Powell, however, has been navigating a complex matrix of economic effects from the president’s tariffs as well as general policy uncertainty. Fed officials are closely tracking whether import taxes reignite inflation — there are early signs they have begun to push up prices — and the extent to which they are slowing the economy.

The Fed is not equipped to deal with both those risks simultaneously but has kept rates elevated as a defensive posture against tariff-induced inflation, which had otherwise mostly cooled back to 2 percent.

There are signs that sentiment within the Fed is beginning to shift. Two board members, Christopher Waller and Michelle Bowman, dissented against a decision to keep rates unchanged Wednesday, both citing downside risks to the labor market.

The latest employment report suggests those risks are looking more well-founded. Investors now see a 75 percent probability of a September rate cut, according to CME Group.

Still, hiring is slowing down alongside Trump’s immigration crackdown, which has kept the jobless rate low even as the labor market has weakened. Unemployment ticked up to a still-healthy 4.2 percent in July.

The central bank’s rate-setting committee will get more inflation and employment data before it meets again in September.

“The burden of proof has shifted and continued labor weakness could force the Fed’s hand despite inflation concerns,” said Alexandra Wilson-Elizondo, global co-CIO of multi-asset solutions at Goldman Sachs Asset Management.

Administration firings

Trump administration firings mount as staffers’ loyalty is called into question

The MAGA activist predicts ‘hundreds’ more pink slips.

By Eli Stokols, Adam Wren, Ben Johansen and Myah Ward

President Donald Trump’s second term White House has been marked by far less palace intrigue and personnel drama at the senior staff and Cabinet level than his first.

And yet, the firings are piling up.

More than a dozen high ranking officials across the administration have been forced to leave their jobs or had their nominations or promotions derailed in the first six months of Trump’s return to Washington. Nearly all of the ousters have come after individuals were targeted by outside allies who convinced the president that they weren’t sufficiently loyal. And in many of those cases, the axe came down after officials found themselves in the crosshairs of right-wing activist Laura Loomer.

In an interview with POLITICO, Loomer said she is now fielding tips from administration officials about colleagues they want exiled amid what she called “a serious vetting crisis,” predicting there are “hundreds” more she expects to purge.

“I’m happy to take people’s tips about disloyal appointees, disloyal staffers and Biden holdovers,” Loomer said. “And I guess you could say that my tip line has come to serve as a form of therapy for Trump administration officials who want to expose their colleagues who should not be in the positions that they’re in.”

Loomer has emerged as a blunt enforcer of allegiance to Trump.

“Donald Trump has always valued loyalty,” said one presidential ally outside the White House granted anonymity to speak candidly about the approach to personnel. “But what you’re seeing now is on another level — there’s zero tolerance for anything else.”

The purges have rippled through the Pentagon, the White House national security council and several other executive branch agencies. To a large degree, the firings align with the approach taken by the Department of Government Efficiency to slash the federal bureaucracy — or with eradicating diversity, equity and inclusion efforts that were a point of emphasis for the last administration. The at times ruthless firings also reflect the ethos of Trump’s sharp-elbowed personnel director, Sergio Gor, who has blocked several individuals whose MAGA credentials were at all suspect. Gor did not respond to a request for comment.

White House press secretary Karoline Leavitt defended the administration’s staffing decisions: “President Trump has put together the best Cabinet and staff in history, and the historic achievements over the past six months prove it,” she said.

In certain cases, firings based on accusations of leaking also laid bare the strain of paranoia that’s long been a feature inside Trump-run organizations.

Trump is famous for asking friends and outside allies for their opinions about his own staff. So much so that, during his first term, former chief of staff John Kelly tried to limit access to the Oval Office in an effort to exert some control over who was influencing the president. It backfired.

Trump often refers to his current chief of staff, Susie Wiles, during Cabinet meetings as “the most powerful woman in the world.” The now familiar riff almost always elicits chuckles in the room. But Wiles’ power comes from not attempting to rein in the president’s impulses or restrict his circle in any way.

“I know this from working for John Kelly, it’s just impossible to control Trump this way. He has lots of different telephones,” said Kevin Carroll, a former CIA officer and lawyer representing intelligence officials fired by the Trump administration. “He’s just on some random cell phone…and it could be with Laura Loomer.”

One of his clients, Terry Adirim, the former top doctor at the CIA, has alleged that Loomer played a key role in her dismissal. Adirim was terminated by the Trump administration earlier this year after some of the president’s supporters criticized her for her role in the mandatory Covid vaccination of members of the military.

This week, the White House requested that Congress delay a hearing for Brian Quintenz to head the Commodity Futures Trading Commission after cryptocurrency billionaires Tyler and Cameron Winklevoss urged Trump to dump Quintenz in a conversation last weekend.

Also this week, Trump ordered the removal of the FDA’s top vaccine regulator, Vinay Prasad, after just three months on the job. He did that despite opposition from Health and Human Services Secretary Robert F. Kennedy Jr. and FDA Commissioner Marty Makary — and after hearing from Loomer.

Loomer engineered a public backlash to Prasad that began with her labeling him on her website a “progressive leftist saboteur undermining President Trump’s FDA.” Other conservative voices, like former GOP Sen. Rick Santorum and The Wall Street Journal editorial board, piled onto the criticism of Prasad and his approach to rare disease therapies — a concern that Sen. Ron Johnson (R-Wis.) raised with the White House on Monday, a day before Prasad was fired.

Also on Tuesday, Trump removed the National Security Administration’s top lawyer, April Doss, after Loomer shared the conservative magazine Daily Caller’s investigation into Doss, which called her a “transparently partisan activist.”

Carroll said Loomer’s influence created a “dangerous situation” with “somebody outside the government, no national security experience, who’s got hire and fire authority over some of these really, really important jobs.”

In the White House, administration officials appear willing to overlook the disruption associated with frequent staff changes. And Loomer says she has strong relationships in the West Wing.

“It is not only appropriate, but critical for the Administration to recruit the most qualified and experienced staffers who are totally aligned with President Trump’s agenda to Make America Great Again,” White House spokesperson Kush Desai said.

Desai added that the administration’s record of “peace deals to trade deals” show that Trump “has assembled the best and brightest talent to put Americans and America First.”

Loomer has reportedly visited Trump at the White House on multiple occasions. Her Oval Office meetings have more than once preceded presidential decisions to cut people loose.

“I have people in the West Wing,” Loomer said, adding that she gets along with Wiles “very well.” “I have people in pretty much every single agency within the federal government like me, every main agency coming to me with concerns.”

Army Secretary Dan Driscoll on Wednesday directed the U.S. Military Academy to terminate an agreement with Jen Easterly, the onetime head of the nation’s cyber defense agency under former President Joe Biden. It came hours after Loomer posted on X, tagging Defense Secretary Pete Hegseth, that Easterly’s West Point hiring was “horrendous.”

While an Army spokesperson told POLITICO this was part of “crafting a deliberate approach to ensure that our future officers are best prepared to meet the demands of the modern battlefield,” Pentagon chief spokesperson Sean Parnell later posted on X that “we are not turning cadets into censorship activities.”

Easterly wrote on LinkedIn the day after the termination that her job at the academy was “a casualty of casually manufactured outrage that drowned out the quiet labor of truth and the steady pulse of integrity.”

In May, Trump pulled the nomination of former Fox News contributor Janette Nesheiwat to be surgeon general after Loomer encouraged the president to go in a different direction.

“@DoctorJanette is not ideologically aligned with Donald Trump or his admin’s health initiatives,” she posted on X. “How can she be confirmed in front of the US Senate on Thursday? She can’t.”

The next day, her nomination was yanked.

Six officials on the National Security Council, including senior director for intelligence Brian Walsh and senior director for international organizations Maggie Dougherty, were all fired by Trump in April, a day after Loomer reportedly met with Trump. She later took credit for the firings, writing on X: “You know how you know the NSC officials I reported to President Trump are disloyal people who have played a role in sabotaging Donald Trump?”

Former national security adviser Mike Waltz also felt the wrath of Loomer, who persuaded Trump to dump his staff. In reality, according to two people familiar with the matter and granted anonymity to discuss it, Waltz’s departure stemmed more from his alienation of Wiles and others inside the White House because of his often brash behavior and attempts to push policy, especially in the Middle East, in a more hawkish direction.

Loomer acknowledges she has made some enemies with her approach.

“Professional jealousy is a terrible disease, and there are many people in the White House who have been infected,” Loomer said. “I think it’s just human nature to dislike people who maybe pose a threat to your job because they’re better at your job than you are.”

Among other people who were fired shortly after Loomer’s intervention was Adam Schleifer, an assistant U.S. attorney in Los Angeles; and Maurene Comey, a prosecutor in the Manhattan U.S. Attorney’s office who had handled some of its highest-profile cases, including those against Jeffrey Epstein and Ghislaine Maxwell.

Loomer’s outsized influence with the president came under heightened scrutiny in April after she reportedly encouraged him to oust Gen. Timothy Haugh, the head of the National Security Agency and U.S. Cyber Command, and his deputy, Wendy Noble, who were largely seen by lawmakers on both sides as uncontroversial and nonpartisan.

Haugh received minimal pushback during his confirmation hearing. But reportedly after Loomer told Trump Haugh was chosen by Gen. Mark Milley, the former head of the Joint Chiefs of Staff with whom Trump has repeatedly butted heads, the president abruptly fired him with little public explanation. This move was widely condemned by Democratic lawmakers and cybersecurity experts, with many accusing Trump of undermining the nation’s cybersecurity.