Good Wednesday evening. In this edition: U.S. and Iran sign deal to end war and reopen strait; Trump delays DNI confirmation hearing to install Pulte; and Fed holds rates steady as Warsh takes over central bank.
Plus, Georgia maps and primaries.
Iran War
The U.S. and Iran officially signed the memorandum of understanding, ending the months-long war that had wrought chaos in the Middle East and snarled shipping through the Strait of Hormuz, driving up global energy prices.
The signing took place remotely late Wednesday afternoon, according to U.S. officials, a surprise after both parties said it would occur Friday in Switzerland.
Earlier in the day, a senior administration official read the deal to reporters, saying it would reopen the strait, create a $300 billion reconstruction fund for Iran, and lift sanctions on the country's oil exports.
Talks over curbing the country's nuclear program, which the president has often cited as his primary goal for starting the war in February, will take place over the next 60 days.
President Trump told reporters this morning that the deal was "not final" and warned the U.S. could resume bombing if Tehran does not "behave."
The president also adamantly denied that the U.S. would provide money for Iran's reconstruction fund.
"That's a false story that got picked up incorrectly," he said. "We are not investing ten cents."
President Trump said other countries were free to invest in the fund if they wanted, but that any investment would depend on Tehran's behavior.
"I would say they won't be doing it for a while until they find out the behavior. It's a behavior thing," he told reporters, adding that Gulf nations might contribute.
Reaction to the details of the agreement, which had been shrouded in secrecy since it was first announced Sunday, was mixed on Capitol Hill.
Democrats blasted the deal as leaving the U.S. worse off than it was before the war, while Republicans were divided, with most of their concerns focused on the sanctions relief.
Sen. Lindsey Graham (R-SC), an Iran hawk, said he believed the memorandum of understanding would be "beneficial" to the U.S. by halting the fighting and allowing the strait to reopen.
"Whether or not the United States can reach an acceptable, verifiable deal with Iran regarding its nuclear program and other issues is yet to be determined, but I see little downside to trying," he wrote on social media.
Sen. Bill Cassidy (R-LA), who lost his reelection bid last month, excoriated the deal, saying former President Ronald Reagan is "rolling over in his grave."
"Iran's nuclear ambitions were not curbed, and they have learned that threatening the Strait of Hormuz works and will undoubtedly leverage it in the future," he said in a statement.
"Now, Iran gets to build brand-new infrastructure under this deal. Before the war, the strait was open, Iran was being crushed by sanctions, and 13 service members were still alive. Now, 13 Americans are dead, families have paid billions at the pump, sanctions will be lifted, and the bombing has stopped. This is the worst foreign policy blunder in decades."
President Trump hailed the deal as far superior to the one secured during the Obama administration that he canceled during his first term and said he was worried about "economic catastrophe" if the war continued.
"The one president I did not want to be was the late great Herbert Hoover," he said, referring to the president who presided over the stock market crash at the beginning of the Great Depression.
The next 60 days will be crucial, and President Trump repeatedly threatened to "bomb the hell out of" Iran if the country does not abide by the conditions set out in the preliminary deal or if negotiations fail to produce a long-term agreement.
"I don't think they're going to veer from the agreement," he told reporters. "What else am I going to do? Am I going to say I'm going to take you to court? Let me take you to court. Let me sue you. No, we're going to bomb the hell out of them if they violate the agreement."
President Trump forced the Senate to postpone Jay Clayton's confirmation hearing to become director of national intelligence and said he would move forward with his plan to install Bill Pulte as acting director, throwing another wrench into congressional Republicans' plans to reauthorize a key surveillance authority.
Section 702 of the Foreign Intelligence Surveillance Act (FISA) — which allows the government to conduct warrantless surveillance of foreign targets abroad — expired last week after Democrats revolted over his decision to name Mr. Pulte, a housing regulator with no intelligence experience, as acting DNI.
Republicans urged the president to nominate a permanent director to help get a bipartisan three-year reauthorization bill through, and the president last week named Mr. Clayton, who currently serves as the top federal prosecutor in New York.
Lawmakers in both parties welcomed Mr. Clayton's nomination, and Senate Republicans moved quickly to schedule his confirmation hearing, with the goal of getting him confirmed before the end of the week, when Mr. Pulte was set to take over in an acting capacity.
Hours before the hearing, President Trump pulled the plug and added a new demand, saying he would not sign a FISA bill until lawmakers pass the SAVE America Act, his controversial voter ID bill that lacks enough support to pass Congress.
"I will not approve FISA without THE SAVE AMERICA ACT going along with it. Not complicated, actually, the Republicans fell into a trap," the president wrote on social media.
"Regarding the approval of our Great Patriot, Jay Clayton, we are cancelling the Senate Hearing RE: DNI today, and will not be going forward until Jamie McDonald is approved to be U.S. Attorney. In the meantime, Bill Pulte will remain as the Acting Director of National Intelligence."
Senate Majority Leader John Thune (R-SD) expressed bewilderment at the move, and Sen. Tom Cotton (R-AR), the chair of the Intelligence Committee, initially planned to proceed with the hearing before ultimately relenting.
"It's regrettable that the president has directed Jay Clayton not to appear at his confirmation hearing today," Sen. Cotton wrote on social media.
"Mr. Clayton is a patriot and a highly qualified nominee, as the president has said repeatedly. While today's hearing is now unfortunately postponed, I look forward to proceeding with his confirmation in the near future."
Asked how long Mr. Pulte would stay in the DNI role, the president said, "As long as it takes to get everybody else approved," referring to Jamie McDonald, his former personal lawyer whom he has nominated to succeed Mr. Clayton in the Southern District of New York.
"They were doing a rush act, and we didn't get anything for it," he told reporters at the G7 summit. "Look, he's a very legitimate guy, he's very smart."
Sen. Mark Warner (D-VA), the top Democrat on the Intelligence Committee who has praised Mr. Clayton, blasted the president's abrupt reversal.
"What we're witnessing is an extraordinary display of dysfunction from a president who seems determined to turn America's national security into a political bargaining chip," he said in a statement. "National security cannot be governed by social media post."
Senate Minority Leader Chuck Schumer (D-NY) accused the president of taking the country's national security "hostage to serve his own personal interests."
"He is the one standing in the way of FISA," Sen. Schumer said. "It was already clear that Trump was the one blocking FISA, but the fact that he withdrew Jay Clayton should erase anyone's doubts. Trump wants FISA to stay expired."
The Federal Reserve held interest rates steady but signaled that a rate hike is on the horizon amid fears over rising inflation.
The decision leaves the target range for the benchmark lending rate between 3.5% and 3.75%, where it has been since December.
It was the first meeting of the Federal Open Market Committee (FOMC) since Kevin Warsh succeeded Jerome Powell as chair of the central bank.
It was also the first policy meeting since last June that did not feature any dissents.
President Trump had undertaken an unprecedented pressure campaign on the Fed and Mr. Powell to try to get interest rates lowered since taking office, even launching a criminal probe of Mr. Powell and seeking to fire Lisa Cook as a Fed governor.
But central bankers, even with the president's newly installed chairman at the helm, are now forecasting one or more quarter-point increases by the end of the year.
The meeting followed inflation hitting a three-year high in May, in large part because of the spike in energy costs resulting from the Iran war.
The consumer price index (CPI), a broad metric for the cost of goods and services, rose 0.5% last month, for a year-over-year reading of 4.2%.
"Core" inflation, which strips out the more volatile food and energy indexes, also accelerated 0.2% on the month, putting the annual rate at 2.9%.
Mr. Warsh said the FOMC recognizes that inflation has been running well ahead of the Fed's 2% goal and that high prices are a "burden" for the American people.
"But the recent past need not be prologue," he told reporters. "I am pleased to report that members of the FOMC are unambiguous and unanimous: This committee will deliver price stability."
President Trump expressed disappointment with the decision but took a much softer tone than he did when Mr. Powell was at the helm of the central bank.
When asked about the possibility of rate hikes later this year, the president said "it could happen."
"It's just hard to believe,"he added. "It just keeps the country down. It's so unusual. But we have a very good guy over there now, so I'm guided by what he wants."
Georgia lawmakersannounced they will not redraw the state's congressional maps ahead of the midterms, saying they did not have enough time to make the changes during the current special legislative session. Gov. Brian Kemp (R-GA) called lawmakers into a special session after the Supreme Court's major ruling this spring that significantly weakened the Voting Rights Act. "When the House learned that it was placed on the call for a special session, we knew it was not the right path forward for our state at this time," House Speaker Jon Burns (R) said at a press conference. "We believe that it is important to do things the Georgia way — responsibly, transparently, and with ample opportunity for public input." State Republicans suggested they could revisit the issue before the 2028 election cycle.
Rep. Mike Collins (R-GA), backed by President Trump, won the Republican U.S. Senate nomination in Georgia, defeating former football coach Derek Dooley in Tuesday's runoff election. He will face Sen. Jon Ossoff (D-GA) in the November general election. Despite Georgia's Republican lean, the party has not won a Senate race in the state since President Trump was first elected in 2016. Elsewhere in the state, Rick Jackson, a healthcare-industry billionaire, won the GOP nomination for governor, defeating Lt. Gov. Burt Jones, who was endorsed by both President Trump and outgoing Gov. Kemp.
Janeese Lewis George is leading in the Democratic primary to succeed Muriel Bowser (D) as mayor of Washington, DC. She holds a double-digit lead over fellow front-runner Kenyan McDuffie, though the Associated Press has not yet projected a winner. Ms. Lewis George is a self-described democratic socialist whose election would mark a sharp shift from the more moderate policies associated with Mayor Bowser.
For your radar…
The Obama Presidential Center holds its dedication ceremony on Thursday in Chicago. Former President Barack Obama and first lady Michelle Obama speak about the center along with former Presidents Bill Clinton and George W. Bush. Watch LIVE on C-SPAN starting at 10:30am ET.
