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Rates, Rebellion, and a Renovation on Hold
Buckle up, because Washington and Wall Street are both having a week, and nobody involved seems particularly relaxed about it.
The Federal Reserve is widely expected to raise interest rates by a quarter-point Wednesday, taking its benchmark range to 3.75% to 4% in its first hike since July 2023, and Chairman Kevin Warsh is walking straight into it. President Trump has been publicly demanding the lowest rates in the world, but stubborn inflation and a bond market already charging nearly 5% on the 10-year Treasury are pulling policy the other way. Three Fed officials dissented in July favoring a hike, and economists now expect at least one more increase by March. The real story may be what Warsh says afterward: markets are desperate to know whether this is a one-off move or the start of a new tightening cycle, and Warsh’s skepticism of the Fed’s usual forward guidance makes his press conference must-watch television. Source: The New York Times
Republican Rep. Thomas Massie of Kentucky has introduced eight articles of impeachment against Defense Secretary Pete Hegseth, accusing him of waging unauthorized hostilities against Iran and committing other abuses of office. Massie’s central charge is that Hegseth kept U.S. forces engaged in Iran for more than 90 days without congressional authorization, a violation of the War Powers framework, and he has also accused Hegseth of retaliating against critics and misusing military power abroad. Notably, this is a Republican targeting a Republican administration, and it comes as Massie, who lost his primary earlier this year, heads for the exits. The House now has to formally dispose of his privileged resolution, putting members on record just weeks before the midterms. Source: NPR
A federal judge has issued a preliminary injunction protecting David Streever after he received a government warning notice over a scathing email criticizing former acting ICE director Todd Lyons. Streever’s email called Lyons a “monstrous human being” and compared him to a Nazi; months later, Homeland Security Investigations officers tracked him down at home, at an airport, and at a hotel to deliver a notice warning he “may be in violation of federal law.” Judge Rudolph Contreras sided with Streever, ruling that the threat of investigation forced him to self-censor his political speech, and the government’s own filings never claimed the email amounted to a prosecutable threat. It’s a preliminary ruling, not a final verdict, but for now, angry criticism of a government official is still just angry criticism. Source: NPR
J.B. Hunt shares plunged more than 10% Wednesday after the trucking giant warned that third-quarter earnings will fall 5% to 10% from the second quarter. CFO Brad Delco pointed to roughly $25 million in new hiring-related costs, from recruiting to sign-on bonuses, plus at least a $10 million hit from wildly volatile diesel prices. Delco framed the pain as a timing issue tied to positioning the company for growth, and improving freight volumes could offset some of the damage. Still, after a run that had nearly doubled the stock over the past year, investors weren’t in a patient mood, and they took the elevator down instead of waiting for the freight volumes to arrive. Source: CNBC
European Commission President Ursula von der Leyen wants Canada to become the European Union’s first-ever “associate member,” a brand-new category of relationship that would deepen cooperation on defense, energy, technology, critical minerals, and economic security without making Canada a full EU member. Speaking to the European Parliament with Canadian Prime Minister Mark Carney in the room, von der Leyen called for urgently reimagining trans-Atlantic partnerships, and lawmakers responded with a standing ovation. The idea remains just that, an idea, since full details haven’t been negotiated and Canada has signaled it isn’t ready to accept all the obligations that typically come with EU market access. Still, the fact that Ottawa and Brussels are floating an entirely new kind of alliance says a lot about how both sides are hedging their bets right now. Source: The Wall Street Journal (no paywall)
The Kennedy Center’s board voted to immediately close its main building for a roughly two-year, $257 million renovation, just hours after a federal judge ruled again that Trump’s name cannot be placed on the national memorial without congressional approval. Officials cited real safety concerns, including a chunk of ceiling plaster that fell 60 feet into the Grand Foyer, but Trump has now said the renovation won’t move forward unless the naming fight ultimately breaks his way on appeal. Meanwhile, internal documents show the center is also fighting a serious financial squeeze, with ticket sales and fundraising down even as leadership insists Trump’s involvement could attract new donors. Between the safety issues, the litigation, and the money troubles, one of America’s most famous stages is now dark while its future gets argued out in court. Source: The Washington Post (no paywall)
From a Fed chair walking a monetary tightrope to a performing arts institution stuck in legal limbo, today’s Sixpack is proof that in 2026, nobody in Washington gets a quiet Wednesday.
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