Politics

LOS ANGELES (AP) — A proposal that would require California to verify proof of citizenship when a person registers to vote — and require voters to provide identification at polling places — will appear on the November ballot, state officials announced Friday.

The announcement comes amid a national debate over election security and what type of requirements voters should face to show they are qualified to cast a ballot. In Congress, Republicans are pushing a strict proof-of-citizenship proposal for residents to vote, encouraged by President Donald Trump.

The California plan — also backed by Republicans — is being pitched as a common sense idea to strengthen confidence in voting in a vast state with more than 23 million people registered to cast a ballot. State officials said its backers submitted sufficient petition signatures to qualify for the November ballot.

“We already show ID for everyday activities like flying, opening a bank account and picking up prescription medications. Thirty-six other states and many countries around the world already use voter ID,” said state Sen. Tony Strickland, a Republican from Huntington Beach.

“Californians deserve secure, transparent elections,” added Strickland, a proponent of the proposal.

If approved in November in the heavily Democratic state, other provisions would require those who vote through popular mail-in ballots would have to give the last four digits of a government-issued ID, such as a Social Security number.

California is among 14 states and the District of Columbia that do not require voters to show some form of identification at the polls or to register to vote.

While California at times has faced questions from critics about the legitimacy of its vote tallies, research shows voter fraud in the country is rare. Voting by noncitizens has occurred, but reviews of state cases have shown it to be uncommon and typically a mistake rather than an intentional effort to sway an election.

Most California residents vote by mail, and in the pursuit of accuracy, thoroughness and counting every vote, the nation’s most populous state has gained a reputation for tallies that can drag on for weeks — and sometimes longer.

The effort to tighten restrictions on voter registration and mail ballots will come in a critical election year, when Californians will be picking their next governor and with control of Congress on the line.

Opponents argued that such requirements make it more difficult for people to vote, especially the elderly, those with disabilities and those without driver’s licenses.

The president continues to claim that he was not the loser in the 2020 presidential election — and has long falsely said the election was marred by widespread fraud. Trump’s claims were rejected by dozens of judges, including several he appointed. His own attorney general and an exhaustive review by The Associated Press found no evidence of widespread fraud that could have changed the results. Multiple reviews, audits and recounts in the battleground states where Trump disputed his loss confirmed Democrat Joe Biden’s victory, including several overseen by Republican lawmakers.

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Associated Press writer Trân Nguyễn contributed from Sacramento, California.

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By David Shepardson and Kanishka Singh

WASHINGTON, April 24 (Reuters) – U.S. President Donald Trump’s administration is considering using the Defense Production Act as the legal basis to bail out Spirit Airlines, a source told Reuters.

CBS News first reported the potential plan on Friday, citing U.S. officials familiar with the discussions.

The source said the government could invoke Title 3 of the Defense Production Act that allows the U.S. government to invest in industrial capacity to ensure supply chains for national defense.

The Trump administration “continues exploring possible options to ensure the airline remains in operation for its passengers and employees,” White House spokesman Kush Desai said.

He added reporting about the mechanism or structure of the financing should be regarded as speculation.

The Defense Production Act is an emergency authority that allows the U.S. government to require private companies to prioritize federal contracts and boost output of critical goods. It also permits loans to private firms for national defense purposes, a measure that may offer support to the airline.

Trump said on Thursday his administration was looking at buying the embattled airline at the “right price.”

“When the price of oil goes down, we would sell it for a profit,” he told reporters at the White House.

The Florida-based budget carrier is running short on time. A lawyer for Spirit said on Thursday it needs new financing or access to its cash by the end of next week, and a court hearing is set for next week as lawyers for the company and creditors aim to reach agreement on a bankruptcy exit plan.

The Trump administration has made a financing offer to help the airline exit bankruptcy that was being reviewed by its major creditors, an outside lawyer for Spirit said on Thursday.

A lawyer for Spirit creditors said on Thursday they had reviewed a term sheet of the government’s offer that sources say includes $500 million in financing and a condition the government receive warrants equal to 90% of Spirit’s equity.

The senior debtor-in-possession financing would help Spirit exit its second bankruptcy restructuring since 2025.

(Reporting by David Shepardson, Kanishka Singh and Christian Martinez; Editing by Bhargav Acharya and Chris Reese)

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By Jennifer Rigby and Bhanvi Satija

BARCELONA, April 24 (Reuters) – Leading medical journal The Lancet will decline a request to provide evidence for a U.S. Senate inquiry into the origins of the COVID-19 pandemic, its editor-in-chief Richard Horton told Reuters in an interview on Friday.

“We have received a request to go and give evidence at a Senate inquiry, which we’re not going to do,” Horton told Reuters at the Reuters Pharma event in Barcelona.

Horton said that the journal would not engage “with an administration that has attacked some of the foremost scientists of our age”, citing the treatment by President Donald Trump’s administration of a former top U.S. health official, Anthony Fauci, who led the country’s COVID-19 response.

He has faced threats since then as well as the ire of Trump and fellow Republicans. Trump cancelled Fauci’s federal security protection last year. 

Horton wrote in February that the Lancet had been asked in December 2025 to provide all records relating to coronaviruses from 2018 to 2022, including emails, notes and studies. The journal Science was asked the same thing, according to a story on its website.

Horton was referring to an inquiry by U.S. Senator Rand Paul, who has been looking into U.S. funding provided to a virology lab in Wuhan, China, the city where the Covid-19 pandemic began in 2020. Paul chairs the Homeland Security and Governmental Affairs Committee.

Paul’s office did not immediately respond to a request for comment.

“They’re still perseverating over Wuhan and what took place there in the latter part of 2019,” Horton said.

The World Health Organization and most scientists say a spillover from nature is the most likely cause for the pandemic. Investigations have been hampered by a lack of data from China, but U.S. intelligence services said last year that a lab leak was probably the cause.

(Reporting by Jennifer Rigby and Bhanvi Satija in Barcelona; Editing by David Gregorio)

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By Aditya Soni and Mrinmay Dey

April 24 (Reuters) – The Democratic governor of Maine, Janet Mills, on Friday vetoed a bill that would have made it the first U.S. state to impose a moratorium on large new data centers, even as local ‌opposition to the electricity-hungry facilities grows.

The decision reflects the difficult trade-off facing political leaders, who must weigh the impact of data centers on the environment and household energy bills against the millions of dollars in investment and tax revenue they can bring.

If signed into law, the bill would have frozen approvals until October 2027 for data centers requiring more than 20 megawatts ​of power while a state-appointed council analyzed ⁠their impact on the local grid, electricity bills, air and water.

Mills, in a letter to the Maine legislature, said she supports a temporary moratorium on data center projects – and would have signed the bill if it had included an exemption for a data center project underway in the town of Jay that is key to jobs and tax revenue.

“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates. But the final version of this bill fails to allow for a specific project in the Town of Jay that enjoys strong local support from its host community and region,” Mills said in a statement.

The Androscoggin paper mill in the town shut down in 2023 after a boiler explosion, leading to hundreds of job losses.

Work to develop a $550 million data center, which reuses ​existing infrastructure that would not have had a major impact on the electric ​grid or energy bills, is expected to create more than 800 construction jobs and at least 100 high-paying permanent jobs, and would contribute property tax revenue to the town of Jay, Mills said.

Mills also said that she plans to issue an executive order establishing a council to examine the impact of data centers in Maine and has signed a bill to prohibit data center projects from Maine’s business development tax incentive programs.

MAINE WAS A TEST CASE

American tech giants have pledged to spend more than $600 billion on artificial intelligence data centers this year as part of a spending spree that has boosted the U.S. economy and is considered the biggest since the telecom boom of the late 1990s.

But mounting opposition to that buildout has led more than a dozen U.S. states to weigh legislation that would halt or restrain development of the facilities, even as the Trump administration pressures states to stay out of AI regulation.

To ease worries about rising electricity bills, Washington last month got big technology companies to sign a ​voluntary pledge at ​the White House ⁠that they would bear the cost of new electricity generation to power their data centers.

Two Democratic lawmakers – Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez – have also introduced legislation to halt all construction on data centers until Congress passes AI ⁠safety legislation.

Maine lawmakers passed the bill against data centers last week, sponsored by Democratic state representative Melanie Sachs. The state was seen as a test case of whether such measures could be adopted in other places.

Limiting data center development would have, however, added to the economic pressure in a rural state already grappling with mill closures that have eroded one of its key industries.

Sachs said Mills’ decision to veto the bill was “simply wrong”.

“While a veto might protect the proposed data center project in Jay, it poses significant potential consequences for all ratepayers, our electric grid, our environment and our shared energy future,” Sachs said.

Virginia, one of the world’s largest data center hubs, is among the U.S. states considering similar legislation.

(Reporting by Aditya Soni in Bengaluru, Chris Thomas and Mrinmay Dey in Mexico City; Editing by Pooja Desai)

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LOCK HAVEN, Pa. (AP) — Josh Shapiro may be heavily favored to win reelection as Pennsylvania governor, but that doesn’t mean there isn’t a lot on the line for him this year.

Shapiro, who is just beginning to hit the campaign trail, wants voters to give Democrats control of the state legislature for the first time in decades. And he’s pushing his favored candidates in competitive congressional primaries, an attempt to mold his party’s slate in the midterm elections that will determine control of Washington.

All of this means that, much like other potential Democratic presidential candidates, Shapiro is testing his political capital in ways that could shape his future and the party’s.

Illinois Gov. JB Pritzker successfully boosted his favored candidate in his state’s U.S. Senate primary. Maryland Gov. Wes Moore failed to convince lawmakers to redraw the state’s congressional map, while California Gov. Gavin Newsom achieved redistricting through a voter referendum last year.

Shapiro brushed off questions — and Republican criticism — about burnishing his credentials for a White House run.

“The only thing I am focused on is beating my opponent for governor and helping other Democrats get elected here and sending a clear message to Donald Trump that the chaos, cruelty and corruption that he’s been engaged in is not something that we support here in Pennsylvania,” Shapiro told The Associated Press after speaking to Democrats at a packed coffee shop in small-town Lock Haven.

Shapiro has never said whether he’s interested in running for president. But he does say he wants a voice in his party’s future. Democrats need to figure out how to “get stuff done” to make people’s lives better, he said, and he wants to be “part of that conversation.”

Stacy Garrity, the Republican state treasurer who is running for governor, said Shapiro can’t hide his ambition — and it’s bad for the state.

“We all know that he’s more interested in Pennsylvania Avenue than helping Pennsylvania families,” she said in an interview. “He thinks if he can hand Pennsylvania on a platter to the Democratic Party, then maybe they take a harder look at him.”

They just might.

Pennsylvania is a hard state to succeed in politically, and Democrats around the country are taking note of Shapiro because of that, said Paul Begala, a Democratic campaign strategist, commentator and senior aide to Bill Clinton when he was president.

The election gives Shapiro an opportunity to demonstrate strength.

“Right now, Democrats, the thing they want the most is a winner, and a very close second is a fighter,” Begala said. “This election is an opportunity for him to show that.”

Ahead of this year’s campaign, Shapiro put his stamp on the Pennsylvania Democratic Party by getting committee people to elect his hand-picked chair and plunging more than $900,000 so far this election cycle into the organization’s accounts.

He’s on track to break his own state fundraising record and tells voters that Pennsylvania is the “center of the political universe” in the fight for control of the U.S. House.

Democrats want to flip four House seats in Pennsylvania. Shapiro’s endorsed candidates include Paige Cognetti, mayor of Scranton; Bob Brooks, president of the state firefighters’ union; and Janelle Stelson, a former television news personality who narrowly lost two years ago.

Shapiro already cut an ad for Brooks, who is running in a hotly contested four-way primary for the chance to challenge freshman Republican U.S. Rep. Ryan Mackenzie.

Shapiro’s endorsements haven’t scared off Democratic rivals.

Ryan Crosswell, a former federal prosecutor running against Brooks, issued a campaign memo that — in a veiled reference to the governor — said Crosswell has “no party machine behind him, no power broker network, no favors to call in.”

For his part, Shapiro said: “I’m just focused on trying to elevate good people. Hopefully they’ll all win.”

Republicans, meanwhile, have their own surrogates.

Garrity said the White House asked her for a list of people she wants to visit in Pennsylvania.

Trump, Vice President JD Vance and a number of Cabinet secretaries have already visited the state’s contested congressional districts. Earlier this month, House Speaker Mike Johnson made a fundraising swing through Pennsylvania.

“We know the majority runs through Pennsylvania and the speaker is focused on doing everything he can to help those members defend their seats,” said Greg Steele, a spokesperson for Johnson’s political operation.

It’s quite likely Johnson will be back: Pennsylvania was his last campaign stop before the 2024 election.

Trump and Vance could return, too, and in the meantime, the president is keeping an eye on Pennsylvania. On Tuesday night, he took to social media to take credit for a decision by owners of two coal-fired power plants not to close in what he called a “BIG WIN for the Great Commonwealth of Pennsylvania, which I love.”

As he begins to campaign, Shapiro is proving himself to be a draw even in Pennsylvania’s out-of-the-way areas. Earlier this month, he helped pack a ballroom for Centre County Democrats and the coffee shop for Clinton County Democrats.

“I saw brand-new people, I saw people who have not been engaged in the party in years,” Bre Brannan, Clinton County’s Democratic Party chair, said. The crowd included Republicans and independents, too, she said.

With a Democratic “trifecta,” Shapiro tells audiences he could get more done, citing legislation Republicans have stalled. That includes raising Pennsylvania’s rock-bottom minimum wage and expanding legal protections for LGBT residents. He also has a housing affordability plan he’s pushing this year.

Consolidating control of the state Legislature would be no small feat. Democrats hold a one-seat majority in the state House and haven’t held the state Senate majority in over three decades.

Few Democrats in the party’s 2028 presidential sights have an opportunity to demonstrate political strength and party-building aptitude in swing states.

The opportunity could help Shapiro prove his mettle when the presidential campaign season cranks up and would-be candidates go in search of institutional support, endorsements and donor commitments.

Pouring money into down-ballot races and flipping seats may not help Shapiro with the average voter. But activists, donors and other elected officials care a great deal about that, strategists say.

Success would strengthen Shapiro’s hand at a time when candidates are trying to win the “perception campaign” that they are the strongest candidate, Democratic campaign strategist Mike Mikus said.

“It doesn’t guarantee anything,” Mikus said. “But it is definitely something to bring to the table when you’re lining up donors, endorsements and finance chairs, things like that. It’s compelling to them.”

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Follow Marc Levy at http://twitter.com/timelywriter

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By Jonathan Allen

April 24 (Reuters) – The U.S. government should add firing squads, electrocution and gas asphyxiation as methods of executing people convicted of the gravest federal crimes, the Department of Justice said on Friday in a report that noted difficulties in getting drugs for lethal injections.

The report was a fulfillment of President Donald Trump’s promise to resume capital punishment in his second term. In his first term, which ended in 2021, he resumed it after a 20-year gap, executing 13 federal prisoners with lethal injections in his final few months in office.

Acting Attorney General Todd Blanche, who released the report, has authorized seeking death sentences against nine people after Trump rescinded a moratorium on federal executions by his predecessor, Joe Biden, the department said.

“Among the actions taken are readopting the lethal injection protocol utilized during the first Trump Administration, expanding the protocol to include additional manners of execution such as the firing squad, and streamlining internal processes to expedite death penalty cases,” it said in a statement.

“Under President Trump’s leadership, the Department of Justice is once again enforcing the law and standing with victims,” Blanche said.

In the report, Blanche instructed the Justice Department’s Bureau of Prisons to modify its execution protocol “to include additional, constitutional manners of execution that are currently provided for by the law of certain states,” pointing to the older methods of firing squads and electrocution, and the new gas asphyxiation method pioneered by Alabama in 2024.

“This modification will help ensure the Department is prepared to carry out lawful executions even if a specific drug is unavailable,” the report said.

Biden, a Democrat, commuted the sentences of 37 of the people awaiting executions on federal death row, leaving only three men.

(Reporting by Jonathan Allen in New York; Additional reporting by Ryan Patrick Jones and Bhargav Acharya; editing by Scott Malone, Rod Nickel)

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By Bo Erickson and Jason Lange

WASHINGTON, April 24 (Reuters) – A clear majority of Americans blame President Donald Trump for surging gasoline prices, which is weighing on his Republican Party ahead of November’s congressional midterm elections, according to a Reuters/Ipsos poll.

Some 77% of registered voters in the poll, which concluded early this week, said Trump bears at least a fair amount of responsibility for the recent rise in gas prices, which was sparked by his decision to launch a war on Iran along with U.S. ally Israel. 

The view was widely shared across the political spectrum, with 55% of Republican voters, 82% of independents and 95% of Democrats pinning blame on the president for the higher costs.

Some 58% of voters, including one in five Republicans and two-thirds of independents, said they would be less likely to support candidates in the November 3 midterms who support Trump’s approach to the conflict with Iran.

The U.S. and Israel launched surprise attacks on Iran in February that killed the country’s leader and thousands of Iranians. Tehran responded with attacks on U.S. allies in the region, damaging oil export facilities and shutting down roughly a fifth of the global oil trade. U.S. gasoline prices have risen to about $4 a gallon, a dollar more than before the war started. 

The war is grinding on household finances and weighing on Republicans ahead of the midterm elections, when Trump’s party faces what many see as an uphill battle to keep their U.S. House of Representatives majority. Risks are also rising that they lose control of the Senate.

‘PEOPLE ARE UPSET’

“Right now, it’s bad. People are upset,” said Sarah Chamberlain, strategist and president of the Republican Main Street Partnership that advocates for conservative lawmakers.

”Republicans are obviously very concerned about maintaining the House, but if we can get through the Iran situation by summertime and gas prices drop back down, or at least go down maybe not to quite the level they were prior to the war, then I think we have a really good shot.”

Some 77% of Americans see fuel prices as a very big concern, the Reuters/Ipsos poll showed, and respondents were more than twice as likely to expect an increase in fuel prices over the next year than they were to expect a decrease.

Trump won the 2024 presidential election after pledging to fix the high rates of inflation that bedeviled his Democratic predecessor, Joe Biden. He has repeatedly claimed the U.S. economy is “booming,” including in remarks in Las Vegas on April 16. The White House website proclaims to visitors: “WELCOME TO THE GOLDEN AGE!”

INFLATION WORRIES

But 70% of respondents in the Reuters/Ipsos poll disagreed with a statement that the economy was booming. Some 82% said inflation was a big concern.

“Trump has made affordability and bringing down prices a cornerstone of the Make America Great Again movement, and with costs going up in the country, that is a hard circle to square, messaging wise,” said Erin Maguire, a Republican strategist.

Maguire said Republican candidates have to be careful how they talk about the war with Iran while highlighting the effort the administration has put into cutting taxes. 

The Reuters/Ipsos poll also showed significant erosion in the Republican Party’s longstanding advantage on the economy. The latest survey, conducted April 15-20, showed 38% of U.S. voters prefer the Republican approach to the economy compared to 37% who said Democrats are better on the issue. That one-point advantage for Republicans compares to a 14-point advantage the party had immediately after Trump started his second term in January 2025.

The poll gathered responses from 4,557 U.S. adults nationwide, including 3,577 registered voters. It had a margin of error of 2 percentage points.

(Reporting by Jason Lange, Bo Erickson in Washington; Additional reporting by Jacob Bogage; editing by Scott Malone and Deepa Babington)

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By Andrew Goudsward, Howard Schneider and Ann Saphir

WASHINGTON, April 24 (Reuters) – The Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell, U.S. Attorney Jeanine Pirro said on Friday, removing an obstacle to the confirmation of Kevin Warsh, President Donald Trump’s pick to lead the central bank.

The move by Pirro, a Trump ally and the top federal prosecutor in Washington, D.C., for now ends an inquiry involving renovation costs for Fed buildings that had been rebuked by a federal judge and prompted a key Republican senator to block Trump’s nominees to the central bank.

Pirro said she had instead asked the Fed’s internal watchdog, the Office of Inspector General, to examine cost overruns in renovations of the central bank’s Washington headquarters. The inspector general has already been examining the project after Powell requested a review last year.

“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in a social media post. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”

JUDGE HALTED PROBE

The Powell probe, which had been examining the renovation and Powell’s statements to Congress last year about the project, became the latest flashpoint in the Justice Department’s pursuit of adversaries and critics of Trump.

A federal judge last month blocked subpoenas to the Fed’s Board of Governors, finding they were issued for the improper purpose of pressuring Powell to cave to Trump’s demands to rapidly lower interest rates or resign. Chief U.S. District Judge James Boasberg found prosecutors had shown “essentially zero evidence” Powell committed a crime.

As recently as this week, Pirro had vowed to continue the investigation and appeal the ruling, which DOJ lawyers have not yet filed in court. She said reports of cost overruns in the $2.5 billion project were enough of a basis to conduct an inquiry.

Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, has vowed not to support Warsh until the DOJ ends what he has called a baseless investigation into Powell. Tillis’ blockade had effectively stalled Warsh’s confirmation.

A spokesperson for Tillis had no immediate comment on Friday, but Tillis indicated during Warsh’s confirmation hearing this week that he would support Warsh if the Justice Department abandoned the probe into Powell.

The chair of the Senate Banking Committee, Republican Tim Scott of South Carolina, on Friday said he would ask the inspector general to brief the panel within 90 days on its findings.

A spokesperson for the Fed declined to comment. A White House spokesperson said the inspector general was best positioned “to get to the bottom of the matter” and said it was confident the Senate would confirm Warsh. 

The decision to end the probe may clear the way for Warsh’s Senate confirmation as Fed chair, potentially by May 15 when Powell’s leadership term ends. It’s less clear if the move meets Powell’s own bar for stepping down as governor.  

“I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality,” Powell said last month. Pirro said on Friday that she may resume her investigation depending on the inspector general’s findings.

WATCHDOG REVIEW ALREADY UNDERWAY

The Fed’s current $2.46 billion budget for overhauling the two buildings is about $1.1 billion more than it had originally allocated in 2020, with most of the increase attributable to rising costs for material and labor driven by the post-pandemic surge in inflation, Fed budget documents show.

A spokesperson for the Fed’s inspector general said on Friday that the office has been reviewing the renovation project since July 2025, including examining “substantial cost increases and overruns.”

“We are actively working to complete our review, and look forward to making the results available to the public and Congress upon completion,” the spokesperson said.

The Fed’s inspector general has already conducted two published audits on the renovations, one issued in March of 2021 that suggested improvements in project management, and another issued in February of 2022 that found the process for modifying the renovations “generally effective.”

Powell revealed the existence of the DOJ investigation in January, calling it a pretext for Trump to gain influence over monetary policy in a blunt video statement. 

Trump has for months hectored Powell for resisting his pressure to rapidly lower interest rates, and publicly supported an investigation into the renovation project. Trump has called Powell a “numbskull,” a “major loser” and “very incompetent,” comments Boasberg cited in quashing subpoenas. 

(Reporting by Andrew Goudsward, Howard Schneider, Ann Saphir, Ryan Patrick Jones and Doina Chiacu; Additional reporting by Bo Erickson and Michael Derby; Editing by Katharine Jackson and Andrea Ricci)

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April 24 (Reuters) – The U.S. State Department has appointed Tommy Pigott as its spokesperson, the department said in a statement on Friday.

Pigott joined the department and President Donald Trump’s administration in January 2025 as Trump began his second term in the White House, and had been serving as principal deputy spokesperson.

The position had been empty since Trump appointed Tammy Bruce as U.S. deputy representative to the United Nations.

“As spokesperson, Pigott will speak directly to audiences in the United States and around the world on how, under the leadership of Secretary Marco Rubio, the State Department is advancing President Trump’s foreign policy,” the statement said.

The department said Pigott has almost a decade of communications experience and previously worked on Trump’s 2024 election campaign and at the Republican National Committee.

(Reporting by Ryan Patrick Jones in Toronto; Editing )

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NEW YORK, April 24 (Reuters) – The Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell, U.S. Attorney Jeanine Pirro said on Friday, removing an obstacle to the confirmation of Kevin Warsh, President Donald Trump’s pick to lead the central bank.

The criminal investigation into Powell had stalled Warsh’s confirmation after a Republican senator, Thom Tillis of North Carolina, vowed to block all Fed nominees until the DOJ ended what he called a baseless investigation.

The dollar and Treasury yields declined on the news, with short-term Treasury trading showing an expectation that the news could mean quicker policy easing by Warsh, who has stated he believes interest rates should be lower. U.S. stocks were mixed after the announcement, largely in line with their trading beforehand, though a sharp rally in chip stocks sent the Nasdaq up more than 1%. 

COMMENTS:​​

NOAH BUFFAM, DIRECTOR, FICC STRATEGY, CIBC CAPITAL MARKETS, TORONTO:

“Warsh is a little bit more dovish than Powell. At his hearing earlier this week, he emphasized trimmed and median measures of inflation, versus where Powell would often emphasize core, which is more just ex-food and energy. Trimmed and median are a little bit weaker than core, so the market’s reading this as Warsh is going to emphasize these weaker inflationary measures and it could lead to him trying to get through more cuts than Powell would have. So, right now the market’s reading this as a little bit dovish. The December Fed meeting is five basis points lower on the day so that’s causing the dollar to sell off a little bit.”

TOM PLUMB, PORTFOLIO MANAGER, PLUMB BALANCED FUND, MADISON, WISCONSIN:

“The main thing was that this was a big impediment for the Federal Reserve hearings on having the new chairman. I think that would add a lot of certainty if we can move ahead on that. They did drop it, but they also said they were waiting for a report. But I have a feeling that this was a nice way for them to just drop it. It was politically unpopular. Members of Congress said they didn’t see a crime. I think it’s very positive for reducing one uncertainty.”

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

“With the DOJ investigation closing, Warsh can now be considered the Chair-In-Waiting. He won’t be a sock puppet of the President, so a few months from now we could see some social media posts complaining about how Kevin isn’t cutting rates.

“Warsh’s doctrine of ‘less is more’ when it comes to communication from the Fed could mean that policy announcement days are going to have a lot more volatility than in the past. Markets will still hang on every word of FOMC voters, but if there are fewer words to hang on, that creates more opportunities for surprises. That could push market rates higher, embedding a jump-scare premium to reflect the risk that the Fed can do the unexpected.”

(Reporting by Karen Brettell, Chibuike Oguh, Chuck Mikolajczak; editing by Colin Barr)

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