A Rhode Island US District Judge has indefinitely blocked President Trump’s freeze on federal grants and loans, arguing in his ruling that the White House had “put itself above Congress” and undermined democracy.

In a Thursday ruling, Judge John McConnell Jr., an Obama appointee – prohibited the Trump administration from freezing or otherwise impeding the disbursement of appropriated federal funds, WSJ reports.

The decision is a victory for Trump critics who say he has trampled on Congress’s authority in his effort to cut federal spending and overhaul agencies.

McConnell’s order follows a similar one issued by a different federal judge in Washington, D.C., on Feb. 25. The judge had previously issued a temporary restraining order, which on Thursday he converted into an injunction, a more permanent form of relief.

“The Executive’s categorical freeze of appropriated and obligated funds fundamentally undermines the distinct constitutional roles of each branch of our government,” wrote McConnell.

“Here, the Executive put itself above Congress,” he continued. “It imposed a categorical mandate on the spending of congressionally appropriated and obligated funds without regard to Congress’s authority to control spending.”

McConnell’s ruling came after 22 Democrat states and the District of Columbia filed a lawsuit which challenged a directive from the White House’s Office of Management and Budget (OMB) directing them to pause funding while it assessed whether various government programs complied with executive orders issued by Trump which target foreign aid, DEI, and green energy projects.

While OMB then rescinded that directive, the states say that come Congressionally-approved funds were still being improperly withheld – and that the initial OMB policy rollout sowed confusion among state governments, nonprofits, and lawmakers.

McConnell issued an earlier temporary restraining order (TRO), in which he said that the administration couldn’t “pause, freeze, impede, block, cancel, or terminate” its federal financial-assistance obligations to the states.

According to the judge, state governments face “significant disruption in health, education, and other public services” due to the funding freeze, and as such, “the Court finds that the public interest lies in maintaining the status quo and enjoining any categorical funding freeze.”

Developing…

Update (1130ET): President Trump has confirmed what Howard Lutnick hinted at earlier. In a Truth Social post, Trump noted that Mexico ()not Canada) will be exampt from tariffs on USMCA-compliant goods until April 2nd…

After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement. 

This Agreement is until April 2nd. 

I did this as an accommodation, and out of respect for, President Sheinbaum. 

Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl. 

Thank you to President Sheinbaum for your hard work and cooperation!

Sheinbaum replied, thanking the US president:

The peso surged up to two-wekek highs…

What happens on April 3rd?

As a reminder, we are at a critical level on the Trump Tariff 1.0 analog…

Will it be different this time?

*  *  *

US equity markets are rebounding off yesterday’s lows following remarks by US Commerce Secretary Howard Lutnick on CNBC that raise the potential fdor exemptions for any goods that are USMCA-compliant:

Trump will decide Thursday on the scope of a one-month exemption on 25% tariffs imposed this month on the US’s two largest trading partners, Lutnick said in an interview with CNBC.

“I think it’s likely it will cover all USMCA-compliant goods and services,” he said.

This comes on the day when the trade balance data shows a record trade deficit overall (as imports surged to front-run tariffs)…

Lutnick said he and Trump would be speaking with their Mexican counterparts later Thursday and that both Mexico and Canada “offered us an enormous amount of work on fentanyl.”

The knee-jerk reaction was positive – erasing around half of this morning’s selloff…

The question is – will these be temporary exemptions… or will Trump change his mind again?

Authored by Jennifer Kabbany via The College Fix,

President Donald Trump has drafted an executive order calling for the U.S. Department of Education to be shut down, The Wall Street Journal reported late Wednesday, citing unnamed “people briefed on the matter.”

A draft of the order “directs Education Secretary Linda McMahon to ‘take all necessary steps to facilitate the closure of the Education Department’ based on ‘the maximum extent appropriate and permitted by law,’” the Journal reported.

McMahon, during her confirmation hearing last month, had stopped short of saying she would shut the department down, arguing that takes an act of Congress.

However, McMahon told staff in an email Monday — the same day she was confirmed by the Senate — that “Trump and the American voters had ‘tasked us with accomplishing the elimination of the bureaucratic bloat here at the Education Department—a momentous final mission—quickly and responsibly,’” the Journal reported, adding:

Fully unwinding the department would require a filibuster-proof, 60-vote majority in the Senate, legal experts have said. The major programs it administers—including money for students with disabilities and student loans—are codified in law and have significant political constituencies. The draft order doesn’t mention Congress. …

With around 4,500 employees as of last year, the department is the smallest cabinet-level agency. Polls show most Americans are skeptical of eliminating the department, and Democrats have rallied in opposition to the idea.

The federal agency began in 1979 under President Jimmy Carter and currently has an annual budget of about $80 billion.

The department is in charge of, among other things, financial aid and student loans for college students, career and vocational education funding, Title IX regulations and oversight, and the Office for Civil Rights. It also maintains massive data records on all schools in the nation.

The department’s federal student loan portfolio amounts to approximately $1.6 trillion in student loan debt, and it is also responsible for the Free Application for Federal Student Aid, or FAFSA, program.

Conservatives in Washington D.C. have argued that the federal student loan programs could be moved to the Treasury Department.

McMahon, at her confirmation hearing, said the Office for Civil Rights could be moved to the Justice Department and disabilities support to the Department of Health and Human Services.

As The College Fix previously reported, the Trump team has already taken major steps in the last six weeks to purge the agency of diversity, equity and inclusion programs and employees.

For readers of independent media – or anyone who’s been paying any level of attention for that matter – this is nothing new, but this week marked the first time a sitting US Secretary of State Described the Ukraine-Russia conflict as a proxy war.

Secretary of State Marco Rubio in a Wednesday interview with Fox News described that “It’s been very clear from the beginning that [President Donald Trump] views this as a protracted, stalemated conflict.”

“And frankly, it’s a proxy war between nuclear powers – the United States, helping Ukraine, and Russia – and it needs to come to an end,” he followed with.

🇺🇸🇷🇺🇺🇦 Rubio just admitted the Ukraine war is a proxy war.

Funny how that used to be called “Russian propaganda,” huh? pic.twitter.com/T5y1bRtUfF

— DD Geopolitics (@DD_Geopolitics) March 6, 2025

He was defending the White House’s ongoing talks and pursuit of a rapid peace deal with Russia’s Vladimir Putin. He also urged others not to sabotage the process, including the Ukrainians.

“President Zelenskyy unfortunately made the decision to challenge the Vice President and start questioning whether diplomacy is even possible; in essence, sabotaging and undermining the President’s plan,” Rubio described of last Friday’s visit to the White House of the Ukrainian leader.

Days prior to this interview, Rubio similarly told ABC he hopes for a ‘reset’ with Moscow. “We have to bring [Russia] to the table. You’re not going to bring them to the table if you’re calling them names, if you’re being antagonistic. That’s just the president’s instincts from years and years and years of putting together deals,” Rubio argued.

Before being tapped as Trump’s top global diplomat, Rubio’s rhetoric was much more hawkish on Russia and Putin, but he’s quickly got on board the president’s plan for peace.

The Kremlin on Thursday responded to Rubio identifying the proxy war nature of the conflict, pointing to a war involving the whole of the Western allies.

Kremlin spokesman Dmitry Peskov said, “We can and want to agree with it, and we agree with it. That’s the way it is. We have said this repeatedly. We have said that this is actually a conflict between Russia and the collective West. And the main country of the collective West is the United States of America.”

Peskov added, “So it is absolutely in line with the position that our president and foreign minister have repeatedly expressed. We have said this repeatedly, and yes, we agree that it is time to stop this conflict and this war.”

While not widely acknowledged early in the conflict, the Western mainstream media has in the last year belatedly began covering this proxy war side of it, including the CIA’s covert role even going years prior to 2022.

Last year the NY Times documented a major US program was established a decade ago which three different American presidents. The Times said the CIA program to modernize Ukraine’s intelligence services had “transformed” the former Soviet state and its capabilities into “Washington’s most important intelligence partners against the Kremlin today.”

This included the agency having secretly trained and equipped Ukrainian intelligence officers spanning back to just after the 2014 Maidan coup events, as well constructing a network of 12 secret bases along the Russian border—work which began over eight years ago. 

These intelligence bases, from which Russian commanders’ communications can be swept up and Russian spy satellites monitored, are still being used launch and track cross-border drone and missile attacks on Russian territory. That is, perhaps until this week, as Trump has ordered a halt to intelligence-sharing with Kiev amid worsening relations and a spat with Zelensky, who has been resistant to signing the minerals deal.

The US trade deficit widened to a record in January as companies scrambled to secure goods from overseas before President Donald Trump imposed tariffs on America’s largest trading partners.

The gap in goods and services trade widened 34% from the prior month to $131.4 billion, Commerce Department data showed Thursday. The deficit was larger than all but one estimate in a Bloomberg survey of economists.

Source: Bloomberg

The value of imports rose 10% to a record $401.2 billion, while exports increased 1.2%. The figures aren’t adjusted for inflation.

Canada’s trade surplus with the US jumped to a record at the start of the year, driven by exports of cars, auto parts and oil, separate data from Statistics Canada showed Thursday.

But, perhaps most notably, the January flurry of imports was broad and included a surge in inbound shipments of industrial supplies and materials. 

Within that category, imports of finished metal shapes that include gold bullion jumped $20.5 billion, marking a a second month of steep increases.

For an even clearer picture of the magnitude of the shift in bullion imports, we note that the Swiss trade deficit (where all that bullion is coming from) rocketed higher (an order of magnitude from historical norms)…

As we detailed here, while everyone has been distracted by talk of the tariff-driven arbitrage between COMEX and LBMA (London)…

Nothing stops the gold train.

And there it is: gold parked at comex vaults just hit an all time high of 39.7mm oz, surpassing the post-covid panic high…. and instead of slowing down, deliveries are again accelerating! Every day, the big bank shorts get closer to default. https://t.co/QbudVZepTk pic.twitter.com/u9Ijgm5Ati

— zerohedge (@zerohedge) March 6, 2025

…it appears Americans have been buying bullion direct from the Swiss.

Dear Switzerland, thank you for the gold avalanche. Oh, and all those who incorrectly claimed the physical gold scramble is just “tariff arbing” London and New York, good luck quietly deleting your posts pic.twitter.com/89rhAz7ECT

— zerohedge (@zerohedge) March 6, 2025

Obviously, by pure math, this is not good at all for Q1 GDP (as we already saw The Atlanta Fed’s GDPNOW forecast crashing). However, complaining about a decline in GDP due to massive imports of precious metals seems ironic at the very least. 

Liesman explaining why soaring gold imports hit GDP lower by 3-4%

Discussed here three days agohttps://t.co/Un8ObwxdJB

— zerohedge (@zerohedge) March 6, 2025

Furthermore, with tariffs now in place, the ‘front-running’ is over and the trade balances (imports) will adjust accordingly.

While the ECB’s rate cut this morning was not in doubt by anyone, and the ECB did not disappoint, cutting rates for the 6th time in a row by 25bps across the board (Deposit rate to 2.5% from 2.75%; Refinancing Rate to 2.65% from 2.90%, marginal lending to 2.60% from 2.85%)…

…. what everyone was focusing on was whether the ECB would use the word “restrictive” in the statement. And while it did use it, here is what it said: “Monetary policy is becoming meaningfully less restrictive, as the interest rate cuts are making new borrowing less expensive for firms and households and loan growth is picking up.” True, but one wonders just how restrictive fiscal policy is becoming now that European interest rates are exploding higher at the fastest pace since covid, we’ll find out soon enough. The ECB also said that “a headwind to the easing of financing conditions comes from past interest rate hikes still transmitting to the stock of credit, and lending remains subdued overall.” As a result, the economy faces continued challenges “and staff have again marked down their growth projections – to 0.9% for 2025, 1.2% for 2026 and 1.3% for 2027. The downward revisions for 2025 and 2026 reflect lower exports and ongoing weakness in investment, in part originating from high trade policy uncertainty as well as broader policy uncertainty.” Meanwhile, rising real incomes and the gradually fading effects of past rate hikes remain the key drivers underpinning the expected pick-up in demand over time.

Commenting on its policy stance, the ECB said the following:

• Monetary policy is becoming meaningfully less restrictive (previously it said “monetary policy remains restrictive”)
• ECB will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.
• In particular, rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
• Governing Council is not pre-committing to a particular rate path.

And here is what it said about inflation:

• Governing Council is determined to ensure that inflation stabilises sustainably at its 2% medium-term target, especially in current conditions of rising uncertainty.
• Domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay.  
• But wage growth is moderating as expected, and profits are partially buffering the impact on inflation.

The ECB delivered the following forecast, cutting 2025 and 2026 GDP, lowering 2025 core inflation while raising 2025 headline inflation. Here are the details starting with HICP inflation:

• 2025: 2.3% (prev. 2.1%)
• 2026: 1.9% (prev. 1.9%)
• 2027: 2.0% (prev. 2.1%)

HICP Core inflation (ex-energy and food)

• 2025: 2.2% (prev. 2.3%)
• 2026: 2.0% (prev. 1.9%)
• 2027: 1.9% (prev. 1.9%)

GDP:

• 2025: 0.9% (prev. 1.1%)
• 2026: 1.2% (prev. 1.4%)
• 2027: 1.3% (prev. 1.3%)

And the visual summary for inflation:

This is what the ECB said about inflation:

Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis. Domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay. But wage growth is moderating as expected, and profits are partially buffering the impact on inflation.

Aside from a modest kneejerk reaction, the market was not surprise: as expected and priced, the ECB cut its policy rates by 25bps taking the deposit rate to 2.50% but as noted above, the most pertinent update was the adjustment to language around restrictiveness, with the ECB now saying “monetary policy is becoming meaningfully less restrictive” (prev. “monetary policy remains restrictive”), a tweak which some say opens the door to a pause in the easing cycle, something the likes of Schnabel have flagged in recent weeks, hence the initial hawkish reaction which sent the EURUSD to session highs of 1.082

Given this, traders will be keenly awaiting the press conference from Lagarde for insight into the discussion around the future path for policy, the statement itself maintained a data-dependent and meeting- by-meeting approach.

Today’s statement aside, also look for Lagarde’s views on the recent German fiscal announcements, EU proposals/reports and the significant market reaction to these events and what impact Lagarde thinks it has on their path ahead.

One thing is certain: monetary policy may be becoming “meaningfully less restrictive” but the explosive move higher in yields across Europe just made fiscal policy the most restrictive it has been in years.

Despite strong employment indications from the US PMI sub-components, ADP was a disappointment yesterday, and this morning saw global outplacement and business and executive coaching firm Challenger, Gray & Christmas report that U.S.-based employers announced 172,017 job cuts in February, the highest total for the month since 2009 when 186,350 job cuts were recorded. 

Source: Bloomberg

It is the highest monthly total since July 2020 when 262,649 cuts were announced.

“Private companies announced plans to shed thousands of jobs last month, particularly in Retail and Technology. With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,“ said Andrew Challenger, Senior Vice President and workplace expert for Challenger, Gray & Christmas.

The Government led all sectors in job cuts in February. Challenger tracked 62,242 announced job cuts by the Federal Government from 17 different agencies last month. So far this year, the Government has cut 62,530, an increase of 41,311% from the 151 cuts announced through February 2024.

Retailers followed with 38,956 job cut plans for a total of 45,375. This is a 572% increase from the 6,751 Retail job cuts announced in the first two months of 2024.

So far this year, the East region has experienced a steep increase in job cuts, primarily due to the cuts recorded for Federal Agencies. The East experienced a 109% year-over-year increase from 51,186 to 107,109. The District of Columbia saw the largest increase from 60 in 2024 to 61,795 in 2025.

Source: Bloomberg

In fact, Challenger, Gray, & Christmas report that “DOGE Impact” leads job cut reasons this year and was attributed to 63,583 layoffs, both directly to the Federal workforce and to contractors.

None of which should be a surprise, but when we look at the government-supplied data, things look a little different?

The number of Americans filing for jobless benefits for the first time slowed last week…

Source: Bloomberg

Adding to that peculiarity, jobless claims in the DC area fell last week??

Source: Bloomberg

But New York saw initial jobless claims explode higher…

However, year-to-date, DC dominates the rise in jobless claimants…

Continuing Jobless Claims rose back up near 1.9 million Americans…

Source: Bloomberg

Given the number of lawsuits desperately trying to slow/delay the firing of government workers (we use that term loosely), we would expect to se the number of initial claims in DC (and therefore the nation) accelerate further in coming weeks as ‘judges’ are forced to allow Trump and Musk to do what ‘we, the people’ asked them to do…

At least three Serbian MPs were injured in a chaotic incident wherein opposition Leftists threw smoke grenades inside the country’s parliament on Tuesday.

“Serbia is rising up for the regime to fall,” read a banner which was unfurled on the chamber floor amid the mayhem. The dangerous action was supposedly in protest against the government under President Aleksandar Vučić and support of demonstrating students on the streets in major cities.

There were several injuries, including one member of parliament who suffered a stroke during the scuffle, which saw politicians clashing with security guards and with each other. The lawmaker was said to be in critical condition.

The law which was about to be voted on before the smoke bombs went off would have increased funding for university education, and the opposition charged that the ruling majority was going to use this to ram down several controversial new laws.

“We believe that only one item can be on the agenda, and that is the fulfillment of the student demands,” Radomir Lazovic from the Green-Left Front stated in front of parliament.

Regional media describes that this was jut the latest in months of raging student-led anti-Vucic protests:

Mass protests sparked by the Novi Sad railway station disaster in November, which left 15 people dead, have continued for three months. Protesters say the disaster highlighted official corruption and the government’s disdain for the population.

The ongoing protests represent the most powerful challenge to President Aleksandar Vucic’s rule since he came to power, and have already claimed the resignations of several senior officials.

JUST IN: 🇷🇸 Chaos in Serbian parliament as opposition sets off smoke grenades and tear gas to protest against the government. pic.twitter.com/DBtOluCmSU

— BRICS News (@BRICSinfo) March 4, 2025

Serbia is another one of those East-West fault line countries in which Europe and NATO would like to see a government which moves away from friendly relations with Russia under Vladimir Putin.

“This is just a Tuesday in a Balkan parliament, shall we continue?” Deputy Prime Minister Aleksandar Vulin said in the aftermath of the scuffle.

More scenes from the Tuesday effort to disrupt parliamentary votes…

🇷🇸 Serbian Deputy Prime Minister Aleksandar Vulin says, “This is just a Tuesday in a Balkan parliament, shall we continue?” pic.twitter.com/N3KpVBlNWR

— DD Geopolitics (@DD_Geopolitics) March 4, 2025

As it turns out, after the smoke cleared (literally), the lawmakers actually continued to convened and worked in a session until early evening as normal. Just another Tuesday in a Balkan parliament indeed.

Via Remix News,

On top of soaring healthcare costs, rising crime, and overburdened schools, the German court system can add itself to the list of institutions feeling pressure due to soaring migration numbers. Rejected asylum seekers are once again suing to stay in Germany in growing numbers, with the administrative courts seeing 100,494 new cases in 2024.

The rules in Germany allow asylum seekers to sue if their asylum case is rejected, with the state of Brandenburg seeing the sharpest increase, with 6,138 cases, a 134 percent increase.

In 2023, there were 72,000 such cases, while in 2022, there were 62,000, according to a survey conducted by the German Judges’ Journal. That means there has been a 62 percent increase since 2022, according to Welt newspaper.

In 2017 and 2018, the number of such lawsuits was much higher but then fell from that time.

The courts are once again struggling to deal with the influx as the Federal Office for Migration and Refugees (BAMF) is now processing asylum claims more quickly.

The highest number of cases were seen in North Rhine-Westphalia at 19,267 cases, while Bavaria (15,278) and Baden-Württemberg (12,755) were in second and third place.

Wait times are also up for decisions and well beyond the target of six months set by the Conference of Minister Presidents.

Sven Rebehn, Federal Director of the German Judges’ Association, which also publishes the German Judges’ Journal, said “The administrative courts are gradually getting ahead of the wave, and their processing times are declining significantly. However, if the current dynamic increase in the number of complaints continues, the trend could stall again.”

He called for the hiring of more judges.

Read more here…

A 22-year old British man who had been fighting for Ukraine was slapped with a lengthy prison sentence of 19-years by a Russian court on Wednesday in southwestern Kursk region. He’s been charged with terrorism and acting as a foreign fighter.

The detained man, identified as James Scott Rhys Anderson, has been dubbed a mercenary by Russian authorities, though it’s unclear whether he was fighting within the ranks of a private firm or perhaps Ukraine’s national armed forces.

He was detained in November reportedly inside Russian territory, fighting on behalf of Ukraine as part of the Kursk incursion, which has been on since last August.

Anderson pleaded guilty to the charges, and the British embassy has committed to giving him “all the support we can” – but likely with the guilty plea there’s little the UK government can do – other than a possible future prisoner swap arrangement.

Given that Russia has deemed Anderson a mercenary, he was not provided prisoner-of-war protections under the Geneva Conventions and thus was charged under Russia’s civil criminal code.

It’s expected that he’ll serve an initial five years in a local prison, after which he’ll be transferred to spend the remainder 14-years in a maximum security facility.

When he was first captured over three months ago, a ‘proof of life’ video was widely circulated on social media channels:

In a video posted on pro-war Russian Telegram channels on Sunday, a man wearing combat fatigues identifies himself as 22-year-old James Scott Rhys Anderson from the UK.

The man, speaking with an English accent, says that he served as a signalman in the British army until 2023 before joining the International Legion in Ukraine to fight against Russia.

In the footage, which has not been verified, the captured man appears with his hands tied. It is unclear when the clip was recorded.

Anderson appeared in court looking gaunt after months in jail awaiting trial…

Russian investigators said Anderson illegally entered Russia in November as part of an armed group committing “criminal acts against civilians”. However, the precise circumstances of his capture remain unclear. 

Early in the more than 3-year long conflict, UK authorities – including Liz Truss at the time – positively encouraged citizens to go and fight on behalf of Ukraine. Since then an estimated 20,000 foreigners from over 50 countries are believed to have traveled to Ukraine to assist. But these official calls from Western officials have grown silent as Ukraine’s battlefield chances have dimmed, and the front lines have seen continued Russian advances.