Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, senior editor Joe Sobczyk looks at a consequential few days in Trump’s presidency. Sign up here and follow us at @bpolitics. Email our editors here.

Run of Success

President Donald Trump managed to intervene in Middle East conflict and emerge just days later with a truce.

It was a seemingly improbable outcome that quelled — at least for now — a military confrontation between Israel and Iran that many feared would spread across the region and beyond.

Trump also — for now — silenced the hardcore MAGA isolationists who decried involving the US in yet another overseas fight as well as Democrats who accused him of dragging the country into war without authorization from Congress. And he did it while avoiding a politically and economically toxic spike in energy prices.

Trump before departing for NATO summit. Photographer: Francis Chung/Politico

That success preceded his arrival in the Netherlands today for a NATO summit meeting that represents another win: an agreement by other members of the alliance to spend more on defense (memorialized by a fawning message from NATO Secretary General Mark Rutte that Trump promptly posted on Truth Social).

But all that comes with a more than a few caveats.

While Trump claimed in a social media post today that it was his “great honor to Destroy All Nuclear Facilities,” it’s not at all clear that is what happened. A full assessment of damage to Iran’s nuclear sites will take time, particularly for the heavily fortified underground Fordow enrichment plant. There also is a question about the status of Iran’s cache of near-bomb-grade uranium.

Yet to be determined is whether Iran will re-enter negotiations on curbing its nuclear program or bide its time while quietly rebuilding.

Meanwhile, the truce between Israel and Iran remains fragile. Longstanding enmity in the Middle East is not going to melt away overnight, and many chapters in that history are still to be written. Israel’s military chief said today that “the campaign against Iran is not over.”

On NATO as well, there is an undercurrent of uncertainty. Russia continues waging war against Ukraine, with attacks today killing at least 26 civilians, and Trump is again casting doubt on his commitment to NATO’s mutual defense pact.

That uncertainty extends to his tariff regime as the wait for deals with trading partners drags on.

Trump congratulated himself today for having “made PEACE abroad,” but his scorecard is incomplete. — Joe Sobczyk

Don’t Miss

Federal Reserve Chair Jerome Powell told lawmakers the central bank is in no rush to lower interest rates as officials wait for more clarity on the economic impact of Trump’s tariffs.

The European Union plans to impose retaliatory tariffs on US imports, including on Boeing aircraft, if Trump puts a baseline levy on the bloc’s goods as many expect.

US consumer confidence unexpectedly declined in June, underscoring lingering anxiety about the potential impacts on the economy and job market from higher US import duties.

The White House has begun hiring more staff at the National Security Council, reversing course weeks after Trump significantly cut the size of the council and as the US confronts a host of foreign-policy crises.

Trump is ratcheting up pressure on Republican holdouts on his multi-trillion dollar tax bill amid entrenched GOP divisions that put a self-imposed July 4 deadline at risk.

A Senate proposal to sell millions of acres of public land to help pay for the massive package of tax cuts and spending has been blocked by the Senate’s rule keeper.

A federal appeals court ordered the Trump administration to return a Salvadoran man who was deported from the US in early May as a result of an “inadvertent” and “improper” government error.

Nearly two dozen US states sued the Trump administration to stop it from using what they say is a spending loophole to cut billions of dollars in federal grants without congressional approval.

Blowback to Trump’s idea of tariffs on imported semiconductors is proving to be broad and deep, stretching from auto companies and boat makers to the technology industry and crypto enthusiasts.

Federal student loan borrowers are missing payments at the highest rate on record with almost one-third of them — or 5.8 million people — delinquent on their loans.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Republican Representative Michael McCaul of Texas, a member of the House Foreign Affairs Committee, about the truce between Israel and Iran.

On the program at 5 p.m., they talk with Democratic Representative Seth Moulton of Massachusetts, about the conflict between Iran and Israel and Trump’s intervention.

On the Odd Lots podcast, Bloomberg’s Tracy Alloway and Joe Weisenthal talk with Eva Dou, the author of House of Huawei: The Secret History of China’s Most Powerful Company, about how Huawei became so strong, its links to the Chinese government, and how it emerged as a possible rival to Nvidia. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

Americans express more confidence in NATO than their European allies — despite the skepticism of their own president. As leaders gather in The Hague this week, a Morning Consult poll shows majorities in Europe now see the alliance as “no longer strong or reliable in light of current politics.” That verdict appears squarely aimed at Trump: Net European sentiment toward the US has fallen more than 25 points since Election Day, fueled by security concerns and Trump's tariffs. — Gregory Korte

What’s Next

Trump and other leaders of NATO countries conclude their meeting in The Hague tomorrow.

New home sales in May will be reported tomorrow.

Durable goods orders for May will be released Thursday.

Pending home sales in May also will be reported Thursday.

The Fed’s preferred inflation gauge for May, the core PCE deflator, is set for release Friday.

The University of Michigan’s final reading of consumer sentiment in June is scheduled for release Friday.

The 90-pause for Trump’s reciprocal tariffs on most counties is scheduled to end on July 8.

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