The Fed just raised interest rates for the first time since 2023. Warsh said inflation has been too high for too long. The White House called it an unfortunate decision.

The Fed just raised interest rates for the first time since 2023. The White House called it an unfortunate decision. Warsh called it necessary. Here is Wednesday.

The Fed just raised interest rates for the first time since 2023. The White House called it unfortunate. Warsh said inflation has been too high for too long. Both of those statements came out of the same building on the same afternoon.

The Federal Reserve voted 12-0 to raise its benchmark interest rate by 25 basis points, a quarter of one percentage point, to a range of 3.75%-4%, its first increase since July 2023. Warsh said inflation has been "too high... for too long" and that "Today, the FOMC decided that this standard has not been satisfied," referring to the standard of sufficient confidence that inflation is moving toward the Fed's 2% target. The updated projections point to the possibility of one more rate increase this year. The White House sharply criticized the decision, calling it "unfortunate."

The unanimous 12-0 vote is the most significant detail in today's announcement. The three members who voted for a hike at the July meeting and were overruled are now on the winning side of a unanimous decision. The committee that had been divided is now aligned. At Jackson Hole, Warsh said he was committed to a discipline, not a decision. Today the discipline produced a decision: oil at $110, diesel at a record $6.06, sticky PCE, and a Canada trade war arriving simultaneously into an already elevated inflation environment gave the committee what it needed. The White House criticizing the Fed chair it appointed for raising rates is the specific institutional tension of a president who wanted a dovish Fed and got a disciplined one. Stocks fell following the announcement. The next FOMC meeting is November 4, one day after the midterm elections.

The US government just acknowledged for the first time that Space Force has deployed weapons in orbit. China warned against an arms race. Russia warned space must be free of weapons.

The Trump administration acknowledged for the first time that the US Space Force, the military branch responsible for space operations established in 2019, has deployed weapons in orbit. China's Foreign Ministry said: "We urge the US side to stop expanding its military capabilities and preparing for war in outer space." The Kremlin's Dmitry Peskov said "space must be free of any weapon."

The Outer Space Treaty of 1967, which the US, Soviet Union, and United Kingdom signed as its original parties, prohibits placing weapons of mass destruction in orbit but does not ban conventional weapons in space. The US acknowledgment today is an acknowledgment that conventional weapons exist in orbit, which is different from a weapons of mass destruction violation, and which represents a significant escalation of the militarization of space that has been developing for years without public confirmation. The specific nature of the weapons deployed, their targets, their operating parameters, and the strategic doctrine governing their use have not been disclosed. China's warning against an arms race is being issued by a country that has been developing and testing anti-satellite weapons for years. Russia's call for space free of weapons comes from a country that demonstrated a destructive anti-satellite weapon in 2021. All three countries are objecting to each other's behavior in the same domain they are all militarizing. Today the US simply became the first to say publicly that it has already placed the weapons there.

The House voted to end the Iran war for the third time. Seven Republicans joined Democrats. The White House will veto it again.

The US House of Representatives voted to end the war on Iran for the third time, with seven House Republicans joining Democrats to back the resolution under the War Powers Resolution, the 1973 law allowing Congress to require the president to withdraw US forces from hostilities it has not authorized. Separately, Republican Congressman Thomas Massie introduced articles of impeachment against Defense Secretary Pete Hegseth.

The House has now voted three times to end a war the president has not formally declared and the Senate has not formally authorized. The War Powers Resolution gives Congress the mechanism to force withdrawal but not the votes to override a presidential veto, which is what the White House has done twice and will do again. The seven Republicans who joined Democrats are the most significant data point in the vote: they are members of the president's own party in a chamber his party controls, voting to end a war the president is fighting, 58 days before a midterm election. Their names and districts describe the specific political calculus of Republicans in competitive seats who are reading the same poll numbers, $110 oil and a $6 diesel record and a 58-day countdown, that everyone else is reading. The House has spoken three times. The president has overridden it three times. The fourth vote will arrive when the same conditions produce it.

FEMA pays coastal homeowners to abandon their homes. Repairing them is not something the policy allows.

NPR found that many coastal homeowners enrolled in the National Flood Insurance Program, the federal program providing flood coverage that private insurers largely will not offer in high-risk areas, have no financial choice but to let their homes collapse and walk away. Federal policy effectively pays them to leave rather than to repair and adapt.

The National Flood Insurance Program was created in 1968 because private insurers were declining to cover flood prone properties, leaving homeowners in coastal and riverine areas without protection. The program now insures more than five million properties. The problem NPR identified is structural: the program pays claims when homes flood but does not require or incentivize mitigation, and in many cases the insurance payouts are lower than the cost of repairing to a standard that would survive future floods. The rational economic choice for many homeowners is to collect the insurance payment, not repair, and either sell or abandon the property. This is not a failure of individual homeowners. It is the predictable output of a federal insurance program designed in 1968 for a flood risk environment that no longer exists. Three major storms have threatened Hawaii in three weeks. Coastal erosion opened a sinkhole under 31 Malibu homes. The insurance program paying people to leave is the federal policy response to a physical reality it was never designed to absorb.

The House passed Russia sanctions named for the late Lindsey Graham. He died earlier this year. The bill now goes to Trump.

The House passed the Lindsey Graham Russia sanctions bill, named for the late South Carolina Republican senator who died earlier this year, sending it to Trump's desk. The legislation gives the president authority to impose tariffs on top importers of Russian oil and natural gas, including China and India.

Lindsey Graham spent the last years of his Senate career as one of the most vocal advocates for holding Russia accountable for its invasion of Ukraine, a position that put him at odds with parts of his own party and in alignment with the Democratic foreign policy establishment. The Russia sanctions bill bearing his name gives Trump the authority, not the obligation, to impose tariffs on countries buying Russian energy. That distinction is the most important word in the bill. Trump can use it or not use it. If he uses it against China and India, the countries buying the most Russian oil and gas, the geopolitical and economic consequences are enormous: China is the US's largest trading relationship and India is a critical Indo-Pacific partner. If he does not use it, the bill is an authority sitting unused on the president's desk while the war it was designed to pressure continues. Graham advocated for this authority his entire career. Whether it gets used is now someone else's decision.

Canada and the European Union are falling in love. The US trade war is the matchmaker.

For decades, the EU and Canada each had strong bonds with the United States in trade, diplomacy, and military cooperation. The Trump administration's tariff wars and demands on allies have shaken that status quo. Now Canada and the EU are looking at each other and thinking they might feel a spark, with NPR reporting their relationship may soon achieve a new special status.

The EU-Canada relationship already has a foundation: the Comprehensive Economic and Trade Agreement, or CETA, which has been in force since 2017 and reduced most tariffs between the two economies. What is new is the political energy behind deepening that relationship. Canada just absorbed 50% US tariffs and retaliated with $20 billion of its own. The EU has been negotiating with the US on tariffs for most of the year. Both have concluded that the transatlantic relationship they built their foreign policy around for 80 years is no longer reliable in its current form. The romance between Canada and the EU is the specific kind of alliance that emerges when two parties find their common reference point has become unpredictable. The US trade war did not intend to accelerate EU-Canada integration. It did anyway. The global trading order is reorganizing around the gap the US left when it started charging for relationships it used to offer for free.

The DOJ just charged Russian agents with plotting attacks inside the United States. The indictment calls them one arm of a global network.

The Justice Department charged Russian agents with plotting attacks on US soil and internationally, with the indictment describing the defendants as belonging to a network that "is one arm of the Russian Federation's apparatus used to carry out external attacks worldwide."

This brief covered Germany's accusation Tuesday that Russia planted a military-grade explosive drone at a NATO logistics airport on August 4. It covered Russia's firing on a Danish military helicopter and the drone sent into Lithuanian airspace Monday. Today's DOJ indictment of Russian agents plotting attacks inside the United States arrives into the same week of documented Russian external operations and describes their common institutional origin: a single coordinated apparatus that the indictment places under the Russian state. The DOJ indictment is a legal instrument that names individuals and charges specific acts. It is also a public statement about the scale and coordination of Russia's external attack program at a moment when the US is negotiating Ukraine peace through Kushner and Witkoff, conducting active hostilities against Iran, and absorbing Russian hybrid operations across NATO's eastern flank. All of those things are happening simultaneously. The indictment is one more thread in the same week's pattern.

An English village just voted to secede from the UK over plans to place an asylum center next door. It did not work. But it tried.

An English village voted to secede from the United Kingdom after the government announced plans to place an asylum seeker center nearby.

The vote cannot legally succeed. The UK's constitutional framework does not allow individual villages to leave the country, and no local vote on the question would have any legal force. What the vote represents is the most dramatic available symbolic act of protest by a community that feels it has no meaningful mechanism to block a decision made in Westminster. The asylum seeker center was not placed in this village because the village wanted it. It was placed there because the government chose it, presumably based on factors including available space, existing infrastructure, and cost, without the community having a formal veto. The village's response was to vote on secession, a legally meaningless but symbolically total rejection of the relationship between the community and the government that governs it. England has produced a specific political energy around immigration and local identity that the Brexit vote expressed at a national scale and that local communities are now expressing at the smallest possible scale. One village. One vote. No legal effect. Noted.

The thread underneath Wednesday

The Fed raised interest rates 25 basis points in a unanimous 12-0 vote, the first hike since July 2023, Warsh saying inflation has been too high for too long and the White House calling the decision unfortunate, the discipline he announced at Jackson Hole producing a decision that the president's own administration criticized. The US acknowledged for the first time that Space Force has deployed weapons in orbit as China warned against an arms race and Russia urged space free of weapons, all three countries making competing calls for restraint in a domain all three are militarizing. The House voted to end the Iran war for a third time with seven Republicans joining Democrats, the White House will veto it again, and the next FOMC meeting is one day after the midterm elections. FEMA's flood insurance program pays coastal homeowners to abandon rather than repair their homes, the federal policy response to a climate risk the program was designed in 1968 to address. The House passed Russia sanctions named for the late Lindsey Graham, giving Trump the authority but not the obligation to penalize countries buying Russian energy. Canada and the EU are moving toward a new special relationship, the US trade war accelerating an EU-Canada integration that 80 years of transatlantic alliance had not produced. The DOJ charged Russian agents with plotting attacks inside the United States as part of a network the indictment calls one arm of the Russian state's global external attack apparatus. An English village voted to secede from the UK over an asylum center, a legally meaningless but symbolically complete rejection of the relationship between a community and its government. Belarus released 25 political prisoners in exchange for lifting of US sanctions on two companies. A building housing 100 people in Gaza collapsed and killed at least 20 after being destabilized by Israeli strikes. Thomas Massie introduced impeachment articles against Pete Hegseth. The South Korea-Central Asia summit opened in Seoul around what the host called the Silk Road spirit meeting modern supply chains.

Eight sections, 58 days until the midterms. The next FOMC meeting is November 4, one day after the election. See you tomorrow.

What to watch tomorrow: Watch whether Trump signs or vetoes the Lindsey Graham Russia sanctions bill, because the authority it grants is significant and whether he uses it against China and India determines whether the bill reshapes the energy trade or sits unused. Watch any market response to the Fed hike overnight and tomorrow morning, because stocks fell following the announcement and the "one more increase possible this year" signal from updated projections is a second market-moving statement in the same release. Watch whether the EU-Canada relationship produces any formal new agreement announcement this week, because the political energy NPR described is arriving at a moment when both parties have something concrete to gain from formalizing it. And watch whether the DOJ indictment of Russian agents produces any diplomatic response from Moscow, because an indictment naming Russian state actors in an external attack network arrives the same week Russia struck a Ukrainian train in Boris Johnson's travel window and sent a drone into Lithuania. See you tomorrow.

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