Washington, DC

1. Arms sale holdup
2. Prices keep rising
3. How does Iran end?
4. Testing NATO
5. Most-favored pushback
6. AI’s IPO stall

President Trump said on social media he’s banning MSNOW, CNN and Politico from the White House “effective immediately.”

Shaheen holds up $2.8B arms sale to Israel

Sen. Jeanne Shaheen, D-N.H., the top Democrat on the Senate Foreign Relations Committee, has blocked an arms sale to Israel since July and continues to withhold consent for advancing the $2.8 billion transaction, Semafor’s Burgess Everett and Eleanor Mueller scoop. Shaheen has asked the Trump administration how Israeli Prime Minister Benjamin Netanyahu plans to use the weapons, a person familiar with the matter said. She has unanswered questions about how the bombs would be used in Syria, Lebanon, and Gaza — as well as to intensify the war with Iran. Shaheen’s move is also the latest example of Democrats bucking Netanyahu’s government, as US voters increasingly hold negative views of it. In April, 40 members of the Senate Democratic Caucus voted to stop an arms sale to Israel.

Everything is more expensive than a week ago

Rising oil prices and the Federal Reserve’s rate hikes have left American households paying more for almost everything than they were a week ago — and the trend is likely to continue through the midterm elections. Analysts expect the ongoing Iran war to continue to raise gas and diesel prices, but it’s an open question how high they will go. “We simply don’t know how to model the endgame,” said JP Morgan’s Natasha Kaneva in a note to investors this week. Kaneva pointed to “red lines” crossed — scenarios analysts had assumed would force the US to draw down the conflict — like oil rising above $100 or Treasury yields crossing 5%. Futures markets put the odds of the Fed raising interest rates at their next meeting at 58%. The central bank’s next meeting is the week before Election Day.

Trump at a crossroads on Iran

A new Fox News poll found 71% of Americans believe Trump does not have a plan to end the war in Iran. They might be right. In an interview with Axios, the president acknowledged he’s at a crossroads: “I have a big decision coming up. Do I want to go in and annihilate them or do I not? It’s a big decision. Anything could happen with me,” Trump said. The US has pulled back on sustained strikes on Iran, instead launching an economic pressure campaign in August that’s damaged Iran’s economy but hasn’t brought the regime to heel. The US has also resisted recent requests by Saudi Arabia to join the fight against the Iran-backed Houthis in Yemen, who knocked a critical Saudi pipeline offline in attacks last week. With Tehran dug in and the conflict expanding, the question — how it ends — remains unanswered.

Russia threat rises as US mulls Europe troop cuts

NATO defense chiefs meet in Copenhagen today under threat of a massive shift in US military presence in Europe. The Pentagon is considering pulling some 25,000 US troops from Europe, NBC News reported, despite growing Russian aggression. In recent weeks, Moscow has been implicated in plots that threatened to escalate tensions with the West — instances that have “put security agencies on edge,” The Washington Post reported. The Trump administration’s renewed efforts to end the Ukraine conflict have yet to bear fruit; administration officials are now weighing an offer of business deals with Russia to entice it to stop the fighting, The New York Times reported. Trump will have new tools to pressure Moscow once he signs the sanctions package Congress approved this week. Washington will watch closely to see how Trump — who at times has spoken affectionately of Russia’s Vladimir Putin — uses them.

Health wonks question who saves in Trump drug program

President Trump took a victory lap on his administration’s work on drug pricing today, announcing all 50 states will participate in the “most-favored-nation” program, saying “this one thing alone should win us the midterms.” But health policy experts question whether the changes will directly save consumers money, and for how long. The White House estimates federal and state governments will save $64.3 billion from most-favored-nation pricing, but experts say that won’t necessarily change the price Medicaid beneficiaries pay for their medicines. “It’s worth being super-explicit: If you are a Medicaid patient, these drugs are already cheap. GENEROUS is not going to make medicines more affordable,” said Brian Reid, principal at health consultancy Reid Strategic, referring to the Centers for Medicare and Medicaid Services program. “The best-case scenario is that there is a small benefit to the Medicaid programs themselves.”

— David Lim

The real reason not to IPO

There’s a groundswell of people in Silicon Valley and Washington claiming the AI doomer narrative sweeping the nation is part of some carefully coordinated “psyop.” I don’t buy that. Public markets tend to get spooked by companies that don’t know whether their products can be trusted not to destroy humanity, let alone complete an accounting audit. AI companies need gobs of money to pay for massive amounts of compute needed to build out enough inference capacity. But there’s still plenty of cash out there willing to help pay for the data center and compute buildout. The bigger issue for the labs right now is having the space and time to build the biggest, most powerful LLMs and work out all the regulatory, safety, communications and technological issues — without the public stock markets distracting them.

White House

• President Trump is considering making 17,600 acres of public land available for data centers. —The Washington Sun
• Ousted members of the Board of Peace asked a federal judge to block Trump from etching his name into the headquarters of the institution, which he attempted to dismantle early last year. —Politico

Congress

• Republican senators are criticizing Defense Secretary Pete Hegseth’s pick for Army Secretary, department spokesman Sean Parnell. —The Washington Sun
• Democrats are calling for an investigation into public comments supporting a rule change allowing greater private equity and crypto involvement in 401(k)s after a Bloomberg report showed some commenters were dead people.

Campaigns

• Rep. Alexandria Ocasio-Cortez, D-NY, is donating to fellow New York Democrats, raising speculation about her plans to run for higher office. —NYT
• Texas Republican Bo French’s social media post deriding Asian students at University of Texas has been a fundraising boon for his Democratic opponent in the state’s railroad commission race. —The Washington Sun
• Sen. John Cornyn, R-Texas, said he won’t vote for French, whose “racist comments” are dragging down the Republican Party.
• Attorney General Todd Blanche’s participation in campaign events breaks with historical norms. —NYT

Courts

• An appeals court may reopen Missouri’s redistricting battle. —Politico

Foreign Policy

• The US military almost boarded a Chinese vessel based on intelligence produced by a false AI report. —CNN
• FBI Director Kash Patel temporarily suspended some cooperation with the bureau’s counterpart in Canada after the nation’s public broadcaster reminded its journalists of a longstanding policy to cite experts in describing 9/11 as terrorism. —NYT
• The White House continues to offer sweeteners to Russia that officials hope will entice Vladimir Putin, the country’s leader, to end the war in Ukraine. —NYT
• More troops have died in Iran than the Pentagon has disclosed publicly. —WaPo

Business

• Warren Buffett is stepping down as chairman of Berkshire Hathaway after six decades.

Energy

• War in Iran is expected to make winter more expensive for some Americans, including in Maine where heating oil prices are up 74% over last year.

Economy

• Federal Reserve officials knew, or should have known, up to a year in advance that Silicon Valley Bank was vulnerable to a massive run. —Bloomberg

Outside the Beltway

• Gov. Gavin Newsom, D-Calif., signed an executive order mandating a “kill switch” for new AI models.

— US Secretary of Homeland Security Markwayne Mullin in a CNN interview.