Morning Report — Trump, Fed split over tariff outlook and economy

Editor’s note: The Hill’s Morning Report is our daily newsletter that dives deep into Washington’s agenda. To subscribe, click here or fill out the box below.

In today’s issue:

Trump stokes guesswork; Fed on pause
Zelensky backs ceasefire after Trump-Putin call
Senate Republicans on mute over Elon Musk
GOP appropriators not Trump rubber stamps

President Trump and allies revel in assertive decision making that keeps friends and foes off balance, even if resulting uncertainty turns out to be a drag on U.S. growth this year.

Federal Reserve Chair Jerome Powell pointed to the administration’s on-again-off-again tariffs while explaining why the central bank is opting to stand pat rather than cut its benchmark interest rates now.

Since his campaign, Trump has made no secret of his interest in seeing the Fed cut rates. But further progress may be “delayed,” Powell said Wednesday without mentioning the president’s name.

At the same time, the central bank is still projecting two rate cuts this year but forecasting slower growth in 2025 and 2026, compared with its December outlook, Powell told reporters. He described the economy as being on solid footing overall.

A Fed forecast released Wednesday “doesn’t really show further downward progress on inflation this year, and that’s really due to the tariffs coming in,” the Fed chair said at the conclusion of the Fed board’s two-day meeting. He said the administration’s evolving policies on immigration, trade, taxes and deregulation contribute to economic and market question marks.

Erosion of confidence seen in consumer surveys, Powell added, is largely a result of continued price pressures that consumers began to experience in earnest during the pandemic. He described economic uncertainty as “unusually elevated.”

The Fed’s actions follow Trump’s dizzying transition to priorities that a majority of Americans say in surveys are not clearly focused on inflationary pressures and an economy that helps them.

Trump has roiled financial markets with tariffs implemented on steel, aluminum and an assortment of other goods against U.S. global trading partners. He says a new round of even more aggressive duties, which the president describes as “reciprocal,” are scheduled April 2.

▪ The Washington Post: Trump’s aides prepare a new round of tariffs on imports worth trillions of dollars, set for “liberation day.”

▪ The New York Times: Trump tariffs have sown uncertainty. That might be the point.

▪ U.S. News: CEOs from a dozen oil companies who met with Trump on Wednesday did not discuss taking over Ukraine’s power plants, Energy Secretary Chris Wright told reporters.

▪ The New York Times: Trump’s tariffs could deal a blow to Boeing and the aerospace industry.

GOADING JUDGES: The president and the White House turned up the heat Wednesday while battling court rulings not in the administration’s favor and targeting judges appointed by Democratic predecessors. Elon Musk and some conservatives on Capitol Hill are not heeding an admonition this week from Supreme Court Chief Justice John Roberts and continue to wield political arguments while calling for impeachment of federal judges. In fact, Musk is donating to lawmakers who have called for impeaching judges.

“[Trump] is firing on all cylinders by exploring unprecedented avenues of executive branch power,” a source close to the White House told The Hill. “Right now, there’s no restraint from the legislative branch. The House and the Senate are just 100 percent compliant, and he’s trying to challenge any restraint from the judicial branch.”

SMART TAKE with NewsNation’s BLAKE BURMAN:

You might’ve seen some headlines suggesting Rep. Glenn Ivey (D-Md.) was calling for Minority Leader Chuck Schumer (D-N.Y.) to lose his leadership post in the Senate for refusing last week to block a Republican bill funding the government.

I spoke with Ivey last night and it was clear to me that he was walking up to a certain line, but not willing to move across it. I asked him if he wants Schumer to step aside, yes or no.

“We’ll see. I want to hear what he says about what he’s planning on going forward,” Ivey told me. “Friday was a disaster.”

Ivey isn’t the only House Democrat putting pressure on Schumer. For example, during a town hall, Rep. Delia Ramirez (D-Ill.) said she thinks Schumer should be replaced as Senate Democratic leader.

In the upcoming days, we’ll see how many Democrats move up to that line — and how many move firmly across it.

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation.

3 THINGS TO KNOW TODAY:

▪ Trump is set to sign a long-anticipated executive order today that seeks to eliminate the U.S. Department of Education, delivering on a campaign promise to try to dismantle the agency.

▪ Maryland Gov. Wes Moore (D) is on an early political ascent. The Hill’s Amie Parnes explains why.

▪ Advocacy group Advancing American Freedom, founded by former Vice President Mike Pence, strives to be independent, and not just independent of Trump.

LEADING THE DAY

© The Associated Press | AP Photo, STR

UKRAINE: Ukrainian President Volodymyr Zelensky on Wednesday put his support behind Trump’s push for a limited ceasefire with Russia, a day after Trump spoke on the phone with Russian President Vladimir Putin. Zelensky spoke to Trump on Wednesday.

“One of the first steps toward fully ending the war could be ending strikes on energy and other civilian infrastructure. I supported this step, and Ukraine confirmed that we are ready to implement it,” Zelensky said in a post on the social platform X. “We believe that such steps are necessary to create the possibility for a comprehensive peace agreement to be prepared during the ceasefire.”

The U.S. had proposed that both sides halt attacks on energy facilities and infrastructure as a first step toward a broader peace deal. On Wednesday, Trump said ceasefire talks are “on track” following a “very good call” with Zelensky, the latest in the back-and-forth effort to halt the more than three-year conflict. U.S. and Russian officials will meet in the coming days to discuss details of the agreement.

Zelensky today briefed European Union leaders on the call with Trump, ahead of an EU meeting in Brussels. He echoed his comments to journalists late Wednesday, where he said he had “felt no pressure” from Trump during the call, adding: “It was a fruitful conversation, perhaps the most fruitful we have had, the mood was positive.”

“We have received signals from the United States that we are talking about the ceasefire on energy facilities, so not to attack energy infrastructure, and we are also talking about the civilian infrastructure facilities,” Zelensky said.

Other issues on the road toward peace in Ukraine have been delegated to working groups, creating a likelihood that efforts at brokering a full ceasefire could become bogged down for months. Overall, Russia is reemerging as a world power after three years of isolation over its invasion of Ukraine. Tatiana Stanovaya, Russia analyst with the Carnegie Russia Eurasia Center, said on X that the most significant outcome of the talks is the implicit acceptance of U.S.-Russia cooperation on key global issues.

“This marks an obvious victory for Putin, who seeks to decouple bilateral relations from the Ukraine war,” she wrote.

▪ The Hill: Trump proposed a takeover of Ukrainian power plants as a form of protection, suggesting the U.S. could deter Russian attacks.

▪ The Associated Press: Russia and Ukraine swapped hundreds of prisoners in one of the war’s largest exchanges.

▪ The Wall Street Journal: Trump’s call with Putin signals a long road ahead to a Russia-Ukraine deal. The Russian leader didn’t agree to a full ceasefire and presented his own demands to end the fighting.

▪ Politico: U.S. arms makers are being frozen out of the European Union’s massive new defense spending plan, which aims to focus on EU and allied countries.

WHERE AND WHEN

The House will meet for a pro forma session at 4 p.m. on Friday.
The Senate will hold a pro forma session at noon.
The president will sign executive orders at 3:30 p.m. in the Oval Office and move to the East Room for a 4 p.m. event in which he will order the eventual closing of the Education Department. Several Republican governors and state education commissioners are invited guests.

ZOOM IN

© The Associated Press | John McDonnell

CONGRESS: As lawmakers look to fiscal 2026 funding, Senate Republicans aren’t planning to be a rubber stamp for Trump’s sweeping operation to shrink the federal government. In both chambers, The Hill’s Aris Folley reports conservatives have been ramping up calls for Congress to codify cuts pursued by Trump’s Department of Government Efficiency, particularly as the administration’s efforts see roadblocks in court. But some Senate Republicans are shying away from endorsing a blanket adoption in the chamber’s government funding bills.

When asked about the idea last week, Senate Appropriations Committee Chair Susan Collins (R-Maine) told The Hill “it could be possible that, after careful consideration, we would decide to codify some of them.” But the effort shouldn't be applied “across the board.”

With passage of government funding legislation for fiscal 2025 behind them, lawmakers are beginning to set their sights on the Sept. 30 deadline to prevent a shutdown and fund the government for fiscal 2026.

The Hill: Sen. Lisa Murkowski (R-Alaska) says that few Senate Republicans are willing to speak out against actions by the Trump administration and Musk because most fear for their political lives.

Meanwhile, Senate Republicans want Musk, who's become a magnet for controversy during Trump's first two months in office, to stop talking about the Social Security Administration. GOP lawmakers warn that it’s known as the "third rail" of politics for a reason and that it's too easy for Democrats to use it as political ammunition. Republicans told The Hill’s Alexander Bolton they are worried that staff furloughs at Social Security will increase wait times for people who have problems with their benefits. And they note that talk about Social Security as a "Ponzi scheme" makes their voters nervous, even hard-core Trump supporters.

“He should zip it on that. It’s not helpful. It plays right into Democrats’ hands; they want to talk about Social Security cuts, Medicare cuts, Medicaid cuts. We don’t. The president does not want to talk about that. He’s against all those things,” said one Republican senator, warning that “when you start making it sound like you’re questioning the foundation of the Social Security system, that’s not helpful.”

▪ The Hill: Trump’s dismissal of two Democratic members of the Federal Trade Commission (FTC) is fueling concerns about the future of the independent agency and what it could mean for the treatment of some businesses.

▪ The Hill: The Republican chairs of the House and Senate Armed Services committees issued a joint statement on Wednesday criticizing the idea of the U.S. drastically changing its military combatant command structure, saying they “will not accept” those changes without coordination with Congress and other agencies.

▪ The Washington Post: The administration is certain to attract Congress’s attention with its idea for a buffer zone in New Mexico to hold migrants under the supervision of active-duty U.S. troops. The change envisions an expansive satellite military installation, potentially tapping Defense Department resources to pay for the president’s immigration crackdown.

ELSEWHERE

© The Associated Press | Jehad Alshrafi

GAZA: Israeli ground forces pushed further into Gaza on Wednesday, taking over parts of a major corridor that bisects the enclave. The move is the most significant ground operation since the collapse of the fragile, two-month ceasefire with Hamas. Wide-scale Israeli aerial bombardment of Gaza began early on Tuesday morning. More than 400 people have been killed, according to the Gaza Health Ministry.

In Israel, Prime Minister Benjamin Netanyahu faces fury from protesters across the country, who allege Netanyahu continues to prioritize his political survival over the security of his country, the lives of Israeli hostages and those of Palestinians in Gaza. Elias Shraga, chair for the Movement for Quality Government in Israel, a legal watchdog, told CNN that the war in Gaza was being waged to keep Netanyahu in power.

“Netanyahu wanted to escape justice. This is the only reason we are facing the regime coup and this bloody war. This is a dangerous mixture,” Shraga said, referring to the corruption trial the prime minister had been scheduled to testify in.

▪ NBC News: Why Israel broke its fragile truce in Gaza and is promising more strikes.

▪ CBS News: As Israeli strikes kill hundreds in Gaza, a retired general says the assault will mean "more hostages dead," too.

▪ CNN: Canada said Wednesday that China executed four Canadian citizens on drug smuggling charges earlier this year, and strongly condemned Beijing’s use of the death penalty.

OPINION

■ The Fed is clueless, too. And that’s OK, by John Authers, columnist, Bloomberg Opinion.

■ Panama will not give in to Trump’s canal threats, by Nivia Rossana Castrellón, opinion contributor, The Hill.

THE CLOSER

Take Our Morning Report Quiz

And finally … 🏒 It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Alert to Russian President Vladimir Putin’s interest in sports, we’re eager for smart guesses about his carefully crafted athletic reputation.

Be sure to email your responses to asimendinger@thehill.com and kkarisch@thehill.com — please add “Quiz” to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

Putin, during a Tuesday phone call with Trump about war, reportedly swayed the president with proposed competition between Russian players from the Kontinental Hockey League and American players from the NHL in special matches to be held in the U.S. and Russia.

True
False

When he was 11, Putin began martial arts training and kept it up. Which is true?

He holds a black belt in judo.
He authored, "Judo: History, Theory, Practice."
He was honorary president of the International Judo Federation until Russia invaded Ukraine and the federation erased his role.
All of the above.

During a 2018 annual charity hockey game in Russia featured in The New Yorker, Putin scored five goals and assisted in four more. In previous years, he’d scored as many as eight (in other words, a lot.) This performance was noted in the coverage with some curiosity because _____.

1. Putin learned to ice skate while in his late 50s

2. He was recovering from knee replacement surgery at the time

3. He wore a business suit

4. Opposing players were from a local elementary school

Putin, who enjoys fishing, has been quoted as saying he was always “glad to have the precious opportunity to sit with a rod. Sometimes my job even aids it. If not for that, how could I possibly have gone fishing in America with two U.S. presidents?” He was referring to George H.W. Bush and George W. Bush. Where did the trio fish? (Hint: There are many photos of this adventure.)

Montana
Delaware
Maine
Arizona

Stay Engaged

We want to hear from you! Email: Alexis Simendinger (asimendinger@thehill.com) and Kristina Karisch (kkarisch@thehill.com). Follow us on social platform X: (@asimendinger and @kristinakarisch) and suggest this newsletter to friends.

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