Washington, DC

1. Jobs report pressures Warsh
2. Judges skeptical of Trump ballroom
3. GOP anti-Pride push
4. Time to buy gas
5. Banks as immigration enforcement

Nasdaq 100 ▼ almost 5% on AI-fueled tech selloff.

Strong jobs report could force rate hike before midterms

US employers crushed expectations and delivered 172,000 jobs in May, well above the predicted 80,000. It’s good news for the labor market, but for Federal Reserve Chair Kevin Warsh, it’s more complicated: He could be forced to raise interest rates this year, possibly just before the midterm elections. Bets on the Fed hiking rates surged this morning on the employment news, and stocks fell, ending a 10-week hot streak. Analysts expect the steady employment picture will set up the Fed to focus on curbing rising inflation, for which rate increases are the primary tool. The central bank can decide to raise (or lower) rates anytime, but decisions are typically announced after scheduled meetings — there are five remaining in the year, and four are before the midterm elections.

Appeals court skeptical of Trump ballroom

A majority of a three-judge panel appeared sympathetic today during oral arguments to a group challenging President Donald Trump’s ballroom project, which a district court judge ruled in March required congressional approval. Circuit Judge Patricia Millett, appointed by Barack Obama, questioned whether the Justice Department’s argument would leave courts powerless to act if the government “decided very quickly and bulldozed the Statue of Liberty.” A lawyer for the DOJ replied, “I think that’s right,” arguing that only Congress could block the project. Trump has argued that his 90,000-square-foot ballroom is critical for national security and his safety. On Truth Social last night, Trump posted that, “This should not even be a case, and it is highly damaging to our Country,” while the plaintiff, National Trust President Carol Quillen, said in a statement after the hearing that she remains “confident in the merits of our case.”

How one student started a red-state anti-Pride Month campaign

The origin of a burgeoning red-state push to counter June’s role as LGBTQ Pride Month with proclamations of “Fidelity Month” or “Family Month” was a truly small-scale encounter, Semafor’s David Weigel reports. Lakie Derrick was about to graduate from East Tennessee State University three years ago when she read that Italy’s conservative prime minister, Giorgia Meloni, had attended a “Family Day” celebration of traditional values. Some news outlets, bungling the translation of the event’s title, claimed that Meloni was proclaiming a “nuclear family celebration” or “Family Pride Month.” So was born an anti-LGBTQ campaign on the right that has grown beyond Tennessee, though Rep. Andy Ogles, R-Tenn., spoke for it in his now-deleted social media post criticizing homosexuality. The conservative counter-Pride efforts come as Republicans’ support for LGBTQ rights notably dips relative to Trump’s first term.

Gas station prices expected to rise

It’s a good time to fill up the gas tank in America. Drivers received a brief reprieve in prices last week, when the average cost per gallon dropped nearly 20 cents, in hopes that a resolution to the Iran war was near. But as that optimism faded, crude prices reversed. Consumer prices have rebounded slowly, making it a good time to buy. Tanker traffic through the Strait of Hormuz is at a near-standstill, as talks between the US and Iran have stalled and strikes by both sides have increased. White House officials have said consistently that gas prices will fall once the strait is reopened. Today, Kevin Hassett, who directs the National Economic Council, said on CNBC that if the strait doesn’t reopen, markets will adjust: “They will start building pipelines to get into the Red Sea, and so on,” Hassett said.

Treasury advances immigration crackdown

The Treasury Department took its first step this morning toward implementing an executive order that drafted banks to help crack down on undocumented immigrants. The department’s illicit finance arm joined with other regulators to direct financial institutions to flag certain suspicious activity like identity theft and payroll fraud — as well as consider whether customers’ use of a taxpayer identification number, instead of a Social Security number or employment authorization document, might be a risk factor. The Consumer Financial Protection Bureau had already moved on the executive order, first reported by Semafor, which was initially expected to require banks to collect customers’ citizenship information. House Financial Services Chair French Hill, R-Ark., questioned this week whether even the final version was “workable” for financial institutions, telling Puck: “The bank is not automatically on the hunt for people who are not in the country legally.”

— Eleanor Mueller

White House

• President Trump said he wants Bill Pulte, the acting director of national intelligence, to fire a large number of US intelligence employees. — WSJ
• Senate Republicans balked at Trump’s $1.8 billion fund, but the president has maintained sweeping IRS audit protections he negotiated under the same agreement with the Justice Department.
• Trump expressed interest in the US government taking ownership stakes in AI companies.
• A months-long dispute between the Trump administration and Anthropic is showing signs of easing ahead of the company’s IPO. — Reuters

Congress

• New allegations against Graham Platner have split Democratic donors, with some standing by him in hopes of defeating incumbent Republican Sen. Susan Collins in Maine and others shifting their support to other Senate races. — Politico
• Trump attacked Sen. Thom Tillis, R-N.C., as a “loser” for threatening to oppose Todd Blanche’s nomination to be attorney general. Tillis can unilaterally block Blanche on the Judiciary Committee; he’s scrutinizing the nominee over his statements about Jan. 6 offenders.
• Senate Democrats urged the Trump administration to stop production of a 250th anniversary solid gold coin that would feature Trump’s image, pointing to potential links to cartels in sourcing the gold.

Health

• The Food and Drug Administration launched a safety study of abortion pill mifepristone in a win for anti-abortion groups and Republican members of Congress.
• The USDA is racing to contain the flesh-eating parasite screwworm, after an infested calf was found for the first time in decades.

Immigration

• A federal judge in Rhode Island struck down a series of Trump administration policies that left asylum seekers waiting indefinitely for decisions.
• The Trump administration considered classifying 2.7 million living people as dead in government records, including some US citizens and permanent residents, as part of its immigration enforcement efforts before the plan was scrapped. — WaPo
• Big Tech and other business groups quietly lobbied Trump to walk back a recent change in green card policy. — WaPo

Business

• Polymarket used paid influencers across the political spectrum to boost its visibility, often without explicit disclosure of the partnerships. — Politico
• SpaceX told banks it is set on the $135-a-share price in its $75 billion IPO. — Reuters

World

• Russian President Vladimir Putin rejected a call from Ukrainian Volodymyr Zelenskyy to meet and negotiate an end to the war in Ukraine, calling on Russian armed forces to “keep working.”
• Lebanon’s leadership criticized Iran for rejecting the latest ceasefire deal with Israel, saying the country should not be used as a “bargaining chip” by Tehran in negotiations with the US.
• A US citizen pleaded guilty to working as an unregistered Chinese government agent in the US.

Media

• The three remaining on-air correspondents of 60 Minutes said in an email that they would stay at the program to keep it alive after a series of high profile firings.

Environment

• The Trump administration is planning to expand access to millions of acres of national forest land for off-road vehicles.

— President Trump describing the potential for the US government to hold equity stakes in leading AI developers.

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Lauren Morganbesser, copy editor

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel