Botwin's Morning Wire

Fed Chair Kevin Warsh testified before the House Financial Services Committee on July 14 at 10 a.m. EDT. He presented the Federal Reserve’s semi‑annual monetary policy report. The Fed’s rate‑setting committee is divided on whether inflation will remain elevated or decline after the Iran war. Minutes released last week show that many of the 19 officials expect the policy rate to stay at or slightly below the current 3.6% level by year‑end, while others see a higher rate. Half of the 18 policymakers who submitted forecasts support raising rates by year‑end, and half favor keeping them unchanged or cutting them. Warsh did not submit a personal forecast. Existing home sales fell 2.4% in June to a seasonally adjusted annual rate of 4.09 million units, falling short of economist expectations. The national median home price rose 1.8% from a year earlier to $440,600, an all‑time high. The International Monetary Fund lowered its 2026 world growth forecast to 3%, citing the Iran war’s energy shock, though AI investment may offset some decline. The IMF projects U.S. growth of 2.3% this year and 0.9% for the eurozone. Global oil demand is expected to fall by 1 million barrels per day in 2026, mainly in Asia, while U.S. gasoline use rose in the second quarter despite higher prices. Weekly unemployment claims dropped to 215,000 in the week ending July 4, and June payrolls added only 57,000 jobs, less than half of the previous month’s gain.

Supreme Court Justices Elena Kagan and Amy Coney Barrett are scheduled to testify before a House Appropriations subcommittee on July 14 at 10 a.m. EDT on the Court's 2027 budget.

The hearing follows a series of recent decisions that have addressed the scope of presidential power, the independence of regulatory agencies, voting rights, and immigration policy.

The subcommittee will review the Court's projected spending, and the justices' testimony will focus on financial oversight and the Court's operations.

In June the Court struck down statutory provisions that required the president to identify a specific cause, such as negligence, before dismissing the heads of independent regulatory agencies. The decision expands the president's ability to reshape agencies that Congress established to operate independently.

The Court ruled that the Federal Reserve's leadership cannot be removed at will, allowing Chair Lisa Cook to remain in office while she contests allegations of mortgage fraud. In a separate decision concerning statements by President Trump about Haitian migrants, Justice Samuel Alito wrote that the cited statements were not overtly racial, while Justice Elena Kagan wrote that the statements contained racial undertones that indicated race influenced the president's resolve to remove Haitians from the country.

The Court has limited the Voting Rights Act since 2013, making it more difficult for minority voters to challenge electoral district changes unless they can prove intentional racial discrimination. The ruling prompted Alabama, Louisiana, and Tennessee to eliminate largely Black districts, including an Alabama district created in response to a prior Supreme Court decision.

The Court upheld the administration's authority to end deportation protections for hundreds of thousands of Venezuelan and Haitian residents and to impose a daily cap on asylum seekers at the southern border. It also granted border officers broader discretion in cases involving green‑card holders.

In the birthright citizenship case, the Court rejected a broad executive order proposed by President Trump that would have limited citizenship for children of undocumented parents, though four justices endorsed an interpretation of the Fourteenth Amendment that would permit such restrictions.

The Court upheld Second Amendment rights in two decisions: it held that regular marijuana use does not disqualify individuals from owning firearms, and it struck down a Hawaii law requiring permits to carry firearms into stores and hotels. The Court announced it will soon decide whether bans on semiautomatic rifles implicate the Second Amendment.

The Court ruled that an emergency powers statute does not permit the president to bypass congressional approval of tariffs, a tactic that no president had previously attempted. President Trump responded by criticizing the justices who ruled against him and indicated he will continue to pursue tariff measures under other authorities.

The budget discussion and the Court's recent rulings will influence the balance of power between the executive and legislative branches and affect the rights of individuals and groups across the United States.

The Trump administration has spent $2.7 billion of taxpayer money to cancel eight offshore wind projects and allocated $1.1 billion to expand coal generation, according to the Department of Interior and the Department of Energy.

Since March, the interior department has entered agreements with energy companies to terminate offshore wind leases and invest in fossil‑fuel infrastructure. The first agreement, announced in March with TotalEnergies, prompted a lawsuit from seven Democratic‑controlled states alleging improper use of public funds.

The administration has also directed the Department of Energy to allocate $625 million to extend and modernize coal plants, $350 million to modernize facilities, $175 million for rural coal projects, and $50 million for wastewater upgrades, and an additional $500 million from the Defense Production Act for 13 coal plants and a coal export terminal in Oakland, California. In February, it earmarked $3.6 million to refurbish nine existing coal plants. A White House spokesperson said the administration is returning bid amounts to companies because of national‑security concerns and is not spending taxpayer dollars on the deals, while a DOE spokesperson said the policies are intended to provide affordable, reliable energy.

Critics argue that the spending contradicts the administration’s claim to lower energy costs. Jay Inslee, former governor of Washington, said the moves are forcing higher bills on consumers and enriching donors. Jenny Rowland‑Shea, senior director for conservation policy at the Center for American Progress, said the federal government has no precedent for directly paying developers to relinquish offshore wind leases. She added that keeping coal plants open will increase electricity prices and cause environmental and health harms. A 2025 analysis by Grid Strategies estimates that keeping 35,000 megawatts of coal capacity through 2028 would cost ratepayers at least $3.1 billion. Energy Innovation reported in 2023 that 99 percent of coal‑fired plants cost more to operate than replacement with renewable sources, and that coal generation costs rose 28 percent from 2021 to 2024.

Policy actions have also included lowering royalty rates on federal coal from 12.5 percent to 7 percent under the One Big Beautiful Bill Act, which Wyoming estimates could reduce state revenue by $50 million annually, and a 2023 coal lease sale that attracted only a bid of one‑tenth of a penny per ton. The administration has frozen or slowed clean‑energy tax credits, delayed permitting for new wind projects, and streamlined permitting for fossil‑fuel projects while making it more difficult for renewable projects to proceed. An executive order signed in February directs the Pentagon to purchase electricity from coal plants.

The spending on coal and the cancellation of offshore wind projects represent a significant shift in U.S. energy policy and raise questions about the long‑term cost to taxpayers and the climate impact of continued reliance on coal.