Watchdog: Chicago Public Schools Blew Millions On Trips, Spas, And Overseas Travel
A new investigation by Chicago Public Schools Inspector General Philip Wagenknecht shows overnight and travel spending in the district surged from about $300,000 in 2021 to nearly $8 million by 2024, according to WTTW.
His report says some staff exploited the district’s “lax, vague, inadequate and unenforced” rules, leading to “exorbitant” post-pandemic travel funded by taxpayers.
The OIG found CPS spent roughly $14.5 million on travel in 2023 and 2024, much of it for out-of-town conferences or overnight student trips.
WTTW writes that the probe began after an elementary school paid more than $20,000 for a staff trip to Egypt without approval; CPS canceled that trip and two others. Investigators later identified more than $142,000 spent by eight schools on overseas travel — including visits to Egypt, Finland, Estonia and South Africa — that featured “tourist activities of debatable value” such as camel rides, a game park visit and hot air balloon rides.
The report also highlighted Las Vegas conferences where more than 600 employees spent over $1.5 million between 2022 and 2024. One principal booked an unapproved $400-a-night suite for himself and his wife.
According to the report, “Nearly 90% of CPS attendees stayed in hotel rooms that exceeded CPS spending limits, and at least two dozen took round-trip Chicago-Las Vegas flights costing more than $1,000,” noting that when the same conference was held in Chicago, attendance was minimal.
The OIG urged CPS to keep seminars local, stating, “Rather than spend millions on professional development at resort spas, luxury hotels and overseas destinations, CPS should keep its educational seminars as close to home as possible.”
CPS has since restricted nearly all employee travel (as of Oct. 29) and created a Travel Review Committee. A spokesperson said the district takes the findings seriously, adding, “Chicago Public Schools remains unwavering in its commitment to fiscal responsibility and the success of our students,” and that CPS is committed “to protect our investments and resources.” The district said new financial systems should strengthen oversight.
Reiterating its mission, CPS stated, “The core mission of CPS is clear: to provide every student with a high-quality, rigorous, inclusive, and enriching education… and to reduce expenditures in a sustainable way.”
Trump Names Saudi Arabia A ‘Major Non-NATO Ally’ During MbS Candlelight Dinner Attended By Tech Moguls
Aside from a couple of hiccups involving exchanges with the press, Crown Prince Mohammed bin Salman’s (MbS) visit to the White House went well, after he came bearing massive gifts, especially a pledge for a whopping $1 trillion in US investment.
During the Tuesday night candlelight dinner in his honor, which was attended by Elon Musk, Tim Cook, Jensen Huang, Cristiano Ronaldo, the head of FIFA Gianni Infantino – and many other tech moguls and notable figures – President Trump took the opportunity to proclaim for the first time Saudi Arabia as a “major non-NATO ally” (MNNA).
This was based on the signing of a new security pact with MbS, called the US-Saudi Strategic Defense Agreement (SDA), during the earlier Oval Office visit.
“At tonight’s dinner, I’m happy to share that we are elevating our military partnership by officially naming Saudi Arabia a major non-NATO ally,” Trump said.
This newly designated status will give the kingdom preferential access to US military hardware, which as Trump also unveiled will include sales of F-35 fighter jets and 300 US-manufactured tanks.
To some degree the US-Saudi oil for weapons relationship has been cemented institutionally going all the way back to the 1970s, but talk of nuclear energy – and even the US providing a potential nuclear nuclear security umbrella – represents an escalation in strategic closeness and relations.
As part of this, the White House is further describing this as the “legal foundation for a decades-long, multi-billion-dollar nuclear energy partnership.”
But what else does the United States (and Israel) get out of this? MbS appears to now be ‘cooperating’ on a years-long effort for normalization of ties with Israel, after diplomacy was stalled for two years amid the Gaza War.
The crown prince told reporters, “We want to join the Abraham Accords, but we also need a clear pathway to a two-state solution.”
“We had a constructive discussion with the president, and we’re going to work together to create the right conditions as soon as possible,” he added.
As expected, all is well again despite years of Saudi Arabia being under a limited (and in reality somewhat mild) human rights spotlight:
The red carpet welcome for Prince Mohammed is an extraordinary moment in diplomatic relations with Saudi Arabia. It is his first visit to the United States since the 2018 killing of the Washington Post columnist Jamal Khashoggi, which U.S. intelligence determined the prince ordered. Prince Mohammed has denied involvement.
After Mr. Khashoggi’s murder, some Western business executives and government officials backed out of Saudi Arabia’s global investment conference, including leaders of major American financial institutions. But by the following year, top deal makers were back at the event in Riyadh, the Saudi capital.
But apparently there’s nothing that Saudi petro-billions (or now Trillion) can’t fix – it covers a multitude of sins, and elites had already been flocking back to doing business with Riyadh over the last years.
Families of the victims of the 9/11 terror attacks aren’t happy either, given the mounting evidence of Saudi Arabia’s role in that as well. But America has a short memory and attention-span, apparently.
Ackman Floats “Immediately Actionable” Blueprint To Free Fannie And Freddie
Bill Ackman thinks he knows what to do to finally resolve the 16-year limbo trapping Fannie Mae and Freddie Mac – the mortgage-finance pillars that remain under federal control over a decade after the financial crisis.
In a Tuesday presentation on X, the billionaire founder of Pershing Square Capital Management outlined a three-step proposal he says would meet the Trump administration’s policy goals, while restoring the companies to private-market discipline. The plan comes amid the White House’s struggle to ease housing costs – which included an absurd idea to roll out 50-year mortgages.
The two government-sponsored entities (GSEs) underpin roughly half of America’s $12 trillion mortgage market. They don’t lend directly – rather, they purchase mortgages from banks and lenders, package them into securities and guarantee investors against losses. This system helps keep credit flowing through economic cycles.
Pershing is the largest common shareholder in the two companies with over 210 million total shares.
Ackman has long argued that the government’s post-crisis control of the two companies which was formalized in a 2008 conservatorship was intended to be temporary, but has dragged on for years beyond its stated purpose.
He proposes the following as an “immediately actionable” roadmap for the Treasury and Federal Housing Finance Agency, which regulates the GSEs.
Step one: Acknowledge the bailout is repaid.
Fannie and Freddie received $187 billion in Treasury support during the crisis. Ackman noted the GSEs have since sent “hundreds of billions” in profits to the federal government through quarterly “net worth sweeps,” far exceeding the original rescue. He urged Treasury and FHFA to formally declare the obligation satisfied—a move that would mark a symbolic break from the financial-crisis era.
Step two: Make taxpayers official owners.
As part of the 2008 rescue, Treasury received warrants to buy up to 79.9% of each company’s common stock at a nominal price. Exercising those warrants, Ackman said, would convert taxpayers’ implicit economic stake into a formal controlling interest—an unusual structure that would leave the U.S. government the majority owner of two publicly traded financial institutions.
Step three: Return the GSEs to the stock market.
Fannie and Freddie were delisted from the New York Stock Exchange after entering conservatorship. Ackman said the companies now meet listing requirements and that relisting would restore liquidity for investors, broaden ownership, and help recapitalize the firms. He argued that with taxpayer ownership approaching 80%, the resulting equity value could exceed $300 billion.
The proposal intersects with a broader debate over the future of U.S. housing finance – a politically delicate realm that has eluded reform under multiple administrations. Supporters of privatization say the GSEs should operate with market discipline and adequate capital so taxpayers are insulated from future downturns. Critics warn that premature release or inadequate safeguards could encourage the kind of risk-taking that contributed to the 2008 collapse.
Venezuelan President Nicolas Maduro made clear early this week that he’d be willing to hold “face-to-face” talks with US officials and warned President Trump against starting a war with his country.
“In the United States, whoever wants to talk with Venezuela will talk, face to face, without any problem,” Maduro said on his weekly TV program, comments that came after Trump suggested that his administration “may” be holding talks with the Venezuelan government.
But Trump also told reporters on Monday that he wouldn’t rule out sending troops into Venezuela, and the major US military buildup in the Caribbean continues. Maduro said that if Trump ordered military strikes on Venezuela, it would be the “biggest mistake of his life.“
Maduro suggested that political factions within the US are trying to hurt Trump before the 2026 congressional elections by pressuring him on the Jeffrey Epstein scandal and pushing him to go to war with Venezuela. “They want President Trump to attack Venezuela militarily, which would be the end of his political leadership and his name,” the Venezuelan leader said, according to the Miami Herald.
Maduro has previously focused his criticism on Secretary of State Marco Rubio, who has been leading the push toward war with Venezuela.
“Mr. President Donald Trump, you have to be careful because Marco Rubio wants your hands stained with blood, with South American blood, Caribbean blood, Venezuelan blood,” Maduro told reporters when the US began its bombing campaign against alleged drug boats in the region.
Following the first US strikes on boats in the region, Maduro sent a letter to Trump urging for diplomacy and stating his readiness to talk with Trump’s special envoy, Ric Grennel, who met directly with the Venezuelan leader back in January.
Despite the US push toward war, Venezuela has still been cooperating on deportation flights from the US. Between March and mid-October, the US conducted 40 removal flights to Caracas, deporting about 8,000 Venezuelan nationals.
‘Massive Shift’ In US-Korea Relations After Trump Gets Seoul To Stop Targeting Tech
Last month we noted that South Korea has been effectively running a racket to extract money from Big Tech through the Korea Fair Trade Commission (KFTC) – which, taking a note from the EU, has repeatedly targeted US firms with massive fines over various business practices. For years, the targeted industries have argued that Korean “network usage fees,” mandatory billing rules, app-store regulations, digital-platform laws, and privacy rulings were crafted to disadvantage foreign competitors while protecting national champions.
The longstanding U.S. – Korea alliance has operated within a familiar structure: Washington provided unconditional military protection, while Seoul pursued autonomous industrial and regulatory policies – occasionally at the expense of U.S. firms. The KFTC in particular developed a reputation among American technology, pharmaceutical, and automotive companies as an aggressive, often unpredictable enforcer whose investigations and fines disproportionately targeted foreign market leaders. In sectors ranging from app stores to semiconductors, U.S. firms routinely complained of a regulatory process that lacked transparency, due-process standards, and basic recognition of attorney-client privilege.
In 2021, they fined Google $177 over alleged anti-competitive practices in Android licensing. In 2023, Apple faced a $22 million fine for keeping developers in the Apple payment ecosystem. In 2024, the KFTC launched probes into Amazon and Google over alleged preferential treatment in online advertising and search results, which they said could disadvantage Korean firms.
They’ve also targeted Qualcomm, Meta, Tesla and other US firms, leaving many wondering whether Korea’s antitrust apparatus was deploying economic nationalism under the guise of competition enforcement. Investigations were often launched under political pressure, imposed fines were regularly among the highest in the world, and procedural protections were thin compared to OECD norms.
Not Anymore…
During President Donald Trump’s October visit to the Republic of Korea, things were quickly straightened out. In a Nov. 13 press release, the White House writes:
“The United States and the ROK commit to ensure that U.S. companies are not discriminated against and do not face unnecessary barriers in laws and policies concerning digital services, including network usage fees and online platform regulations.”
So – Korea will need to keep their attack dog on a leash. To that end:
“The ROK commits to provide additional procedural fairness provisions in competition proceedings, including the recognition of attorney-client privilege.”
This further neuters the KFTC, an institution that historically did not offer the evidentiary protections common in U.S. or EU jurisdictions. American companies have long complained that Korean antitrust proceedings allowed investigators access to internal legal communications – a structural disadvantage that no domestic firm in the United States or Europe would be forced to accept.
As a member of the Trade Subcommittee, ensuring U.S. companies are treated fairly when operating abroad is crucial. That’s why I introduced bipartisan legislation addressing the Republic of Korea’s harmful digital trade barriers earlier this year.
Beyond the KFTC, Seoul’s commitments under the new Korea Strategic Trade and Investment framework seem like a great deal for America:
$150 billion in U.S.-approved investments in shipbuilding
$200 billion more under a coming MOU
A $36 billion Boeing aircraft purchase
$25 billion in U.S. defense acquisitions
$33 billion in support for U.S. Forces Korea
While the US is no longer separating defense and economics – it’s explicitly linking security cooperation to regulatory reciprocity, and makes clear that a strong alliance requires a fair economic relationship.
Carrot and Stick
Politico reports that if Korea walks away from the agreement, they could launch a ‘301 probe’
According to three people close to the discussions who were granted anonymity to disclose private conversations, U.S. Trade Representative Jamieson Greer and other administration officials have repeatedly warned they could launch a 301 probe if Seoul walks away from that particular part of the agreement.
Greer most recently issued that warning during discussions leading up to last month’s summit between Trump and South Korean President Lee Jae-myung, as South Korean negotiators hedged on proposals the U.S. believes would expose tech behemoths like Google, Apple and Meta to heavy fines. He also said something similar at a September meeting with South Korean Trade Minister Yeo Han-koo, the people said.
The pressure campaign is part of the administration’s wider effort to push back on foreign regulations aimed at reining in the power of large digital platforms — a model pioneered by the European Union and its Digital Markets Act. Last week, the Trump administration unveiled trade agreements with Argentina, Guatemala, El Salvador and Ecuador that include requirements that those countries reject digital services taxes.
That said, “Administration officials and U.S. tech industry allies are expressing confidence that Lee’s government won’t renege on that agreement.”
“After all the hard work that went into last week’s trade deal, it’s unimaginable that Korean officials would let the KFTC move forward with legislation or regulatory actions that would blow everything up and inevitably lead back to higher tariffs and escalating tensions,” one corporate lobbyist close to the White House told the outlet.
A White House official told Politico that the possibility of a Section 301 “came up” during the talks, but that the US was not considering a “heavy-handed approach” at this time.
“The Koreans understood that tariffs are … a stick we carry,” the official added.
Meanwhile, after years of Washington blocking Seoul’s ambitions for nuclear-powered attack subs, Trump gave them the green light.
According to Trump’s first National Security Advisor, Ambassador Robert O’Brien, “The US-ROK trade agreement signals a massive shift in how Korean officials are now expected to treat US firms. It officially recognizes the need to address a history of aggressive, discriminatory policies against American tech companies—including raids & unfounded criminal prosecutions. This deal should effectively kill any new legislation in Korea targeting online platforms, consistent with explicit warnings from President @realDonaldTrump.”
The US-ROK trade agreement signals a massive shift in how Korean officials are now expected to treat US firms. It officially recognizes the need to address a history of aggressive, discriminatory policies against American tech companies—including raids & unfounded criminal…
There are still issues to be hammered out with the sub deal; where they’ll be made and how to secure fuel for them considering Washington’s longstanding stance on not allowing Seoul to enrich uranium or reprocess spent nuclear fuel (their 26 nuclear reactors are all powered by imported fuel). Seoul, however, wants to enrich uranium themselves to build its own fuel supply chain and bolster its energy security.
Whatever happens with that, it’s clear that Seoul is aligning its industrial future more tightly with the United States than at any point in modern history.
Korea has been officially put on notice. Treat American companies poorly, threaten our workers, raid our firms’ offices, and President Trump will push back.
It’s insane we’ve tolerated this kind of behavior from an ally, but even greater that the new trade deal KlLLS any… pic.twitter.com/7LnZCAthj0
“This Is A National Emergency” – US Govt To Buy 10 Large, New Nuclear Reactors
Hot on the heels of news that it will invest “hundreds of billions” in loans to the nuclear power industry, including one already disbursed loan for $1BN to restart Three Mile Island, Bloomberg reported that the US government also plans to buy and own as many as 10 new, large nuclear reactors that could be paid for using Japan’s $550BN funding pledge, part of the Trump admin’s existential push to meet surging demand for electricity
The Energy Department’s chief of staff, Carl Coe, made comments today detailing the unusual arrangement related to the $550 billion in funding for US projects announced by Japan, Bloomberg reports.
“The role of having the government involved in private markets is sacrosanct — you just don’t do it,” Coe said at an energy conference hosted by the Tennessee Advanced Energy Business Council. “But this is a national emergency.”
The announcement sparked speculation which companies would benefit from the federal government’s upcoming purchases, which as we said yesterday, would amount to a flood of capital for the nuclear sector.
It is still unclear whether the funding commitments made by Japan, announced last month as part of a trade deal framework with the US, will come to fruition. In all, Japan has agreed to invest some $332 billion for energy projects in the United States, according to the White House. That pledge, in addition to Westinghouse’s new AP1000 reactors, include a new breed of smaller nuclear reactors, as well new power plants, electric transmission projects and pipelines.
Below we list some of the most likely beneficiaries:
Cameco, CCJ – Currently a 49% owner of Westinghouse. They, along with Brookfield Asset Management, are already coordinating with the US government for building out the only large reactor design currently in discussion – the 1,100 MWe AP1000. The only other large reactor with a partially US-owned design is the boiling water reactor from GE-Hitachi. Those reactor designs haven’t been marketed for development by GE Venova for years, while the company has instead focused on their 300 MWe design, the BWRX-300.
BWX Technologies, BWXT – While this company doesn’t currently have much involvement with the construction of AP1000 reactors, due to this new project being federally driven, there could be an increased role for the US government’s primary nuclear contractor for heavy fabrication or manufacturing.
Mirion Technologies MIR – They are one of the leaders in radiation safety and monitoring equipment, and are one of Westinghouse’s primary contractors for reactor instrumentation. Their recent acquisition of Paragon adds to the suite of monitoring equipment they have to offer for new plants.
Flowserve, FLS – While still a comparatively small portion of their overall revenue, Flowserve is the leading provider of critical pumps and valves for nuclear primary and secondary systems. In their lastest earning report, they pointed to a potential $10 billion revenue stream of nuclear contracts for which they think they are one of the leading competitors.
Centrus Energy, LEU – They are on the cusp of finally commencing their Low Enriched Uranium (LEU), typically used by large commercial reactors like the AP1000, and High-Assay LEU (HALEU), used by most small advanced reactors, capacity expansion projects after multiple pledges for support made by South Korea and the US government. Additional task orders under the DOE’s uranium enrichment programs are also anticipated in the coming weeks.
Silex Systems, SILXY (SLX.ASX) – Silex owns 51% of Global Laser Enrichment, a company using lasers to enrich uranium at a test facility in North Carolina, with a fuel facility license currently under review for a commercial plan in Kentucky. They are actively producing hundreds of kilograms of LEU for the calendar year at their facility in North Carolina, and have deep integration with the DOE to produce additional quantities of uranium for additional enrichment.
Domestically owned and operated uranium mining companies, UEC, EU, URG, UUUU – The four major American uranium companies stand to benefit from the federal effort to expand domestic mining of uranium, not just for a commercial fleet expansion effort, but for defense purposes, as uranium mined in the United States is the only ore that can be used for use in nuclear weapons and US Navy reactors.
As we have discussed extensively in recent weeks, and as the Trump admin has picked up, there are now flashing red alerts about a shortage of electricity needed for energy-hungry data centers that power artificial intelligence and for a potential resurgence of domestic manufacturing. On his first day in office, President Donald Trump declared an energy emergency, unlocking new domestic powers to fast-track pipelines, expand power grids and save struggling coal plants.
It has been more than a decade since the US last broke ground on a large-scale nuclear power plant that came online. Most of America’s energy industry wrote off for dead the notoriously expensive projects after Southern Co., the last utility to build a new plant, went $16 billion over budget and seven years behind schedule building its Vogtle project.
Still, the AI boom has created new life for the big plants. Earlier this year, Xcel Chief Executive Officer Bob Frenzel raised the idea that the projects could come back in vogue.
It is still unclear whether the funding commitments made by Japan, announced last month as part of a trade deal framework with the US, will come to fruition. In all, Japan has agreed to invest some $332 billion for energy projects in the United States, according to the White House. That pledge, in addition to Westinghouse’s new AP1000 reactors, include a new breed of smaller nuclear reactors, as well new power plants, electric transmission projects and pipelines.
The problem, as anyone who is familiar with Japan’s sovereign debt and chronic budget deficits, is that the country simply does not have this money, which likely means that while the Trump admin will use Tokyo as a smokescreen for money purposes, the actual funds – tens if not hundreds of billions of them – will come from Uncle Sam’s own treasury in the coming years.
The Energy Department didn’t immediately respond to a Bloomberg request for more details. Coe, in his remarks at the conference, said lots of details remained to be decided, but expressed confidence the nuclear reactors would come through.
“We’re trying to decide where to put them,” Coe said.
US Pressuring Ukraine To Make Serious Territorial Concessions In First: Report
Update(1429ET): It looks like for the first time Washington is getting serious about ending the Ukraine war, now apparently offering territorial concessions. And the Trump White House is reportedly leaning on President Zelensky to accept, per the FT:
“According to people with direct knowledge of the document, the draft plan would require Ukraine to cede the remainder of the eastern Donbas region — including land currently under Kyiv control — and cut the size of its armed forces by half.
Crucially, it also calls for Ukraine to abandon key categories of weaponry and would include the rollback of US military assistance that has been vital to its defence, potentially leaving the country vulnerable to future Russian aggression.
It would also stipulate that Russian be recognized as an official state language in Ukraine and grant official status to the local branch of the Russian Orthodox Church — provisions echoing long-standing Kremlin political objectives.”
The 28-point Trump also reportedly plan calls for Russia to gain full de facto control of Luhansk and Donetsk. In Kherson and Zaporizhzhia, the current lines of control would mostly be frozen in place, according to the plan which is sure to be controversial in Europe.
* * *
Here we go again: the Trump administration is desperately seeking to revive the peace effort in Ukraine, this time coming up with a 28-point plan which is modeled off the so far successful Gaza ceasefire.
The US is said to have been quietly working with Moscow on a new initiative to end the war in Ukraine. It’s being called a ‘secret’ plan and effort, according to Axios. It has led to a series of behind-the-scenes meetings and draft plans as Washington explores what conditions might allow for a political settlement.
The 28-point framework is organized around four major themes: securing peace in Ukraine, establishing security guarantees, addressing broader European security concerns, and defining the future of US relations with both Russia and Ukraine. An important highlight is that the talks are taking place without Ukraine or Europe at the table.
A senior Kremlin official cited in Axios said he was “optimistic” about the plan’s prospects, arguing that it aligns more closely with Moscow’s views than previous diplomatic efforts.
But is control of land or territorial concessions to be resolved? It’s unclear whether the secret plan tackles this head on, but if Russian officials are warming to the 28-point plan, then it likely touches on this.
Trump’s envoy, Steve Witkoff, has been overseeing the drafting process and has held extensive discussions with Russian negotiator Kirill Dmitriev, the head of Russia’s sovereign wealth fund and and top Putin representative in talks.
Dmitriev revealed to Axios he spent Oct. 24–26 in Miami in intensive talks with Witkoff and Trump advisers. Crucially he said that for the first time “we feel the Russian position is really being heard.”
Zelensky’s national security adviser, Rustem Umerov, has also been quoted as saying “We know the Americans are working on something.” This remark came as a planned meeting in Istanbul involving Witkoff, President Zelensky, and hosted by Erdogan on Wednesday has been altered. US Army representatives will reportedly be involved, and will meet with Zelensky, likely to pitch the new 28-point plan and brief him on progress.
Further interesting is that White House official told Axios Trump believes the war could “if flexibility is shown,” adding: “The president has been clear that it is time to stop the killing and reach a deal to end the war.”
Ukraine supporters are already vehemently complaining the talks are taking place secretly and without Kiev’s direct involvement or input…
A “secret plan” to end the war? What we know – and why Ukraine must stay vigilant.
Axios and Reuters report that the White House is quietly working with Russia on a 28-point roadmap to end the war in Ukraine. The plan is reportedly divided into four areas:
1️⃣ Peace in Ukraine
2️⃣… pic.twitter.com/KO82vJMqMh
But then again, all the sides have been down this road before, and even recently, and yet at those moments Moscow’s real, pressing concerns were not directly dealt with, including a clear and permanent commitment that Ukraine will never join NATO, along with territorial concessions – starting especially with Crimea.
Trump expressed optimism in Tuesday comments, claiming that “I’ve actually stopped eight wars. I have another one to go with Putin. I’m a little surprised at Putin. It has taken longer than I thought.”
President Donald Trump said the United States should adopt one federal standard for governing artificial intelligence (AI), saying it’s important for the United States to stay ahead of China in the race for AI dominance.
In a Truth Social post on Nov. 18, Trump said the United States needs a single AI standard rather than “a patchwork of 50 state regulatory regimes,” warning that state-level rules are stifling the country’s AI growth.
“Investment in AI is helping to make the U.S. Economy the ‘HOTTEST’ in the World, but overregulation by the States is threatening to undermine this Major Growth ‘Engine’,” he wrote.
Trump said some states tried to “embed DEI ideology into AI models,” producing what he described as “woke AI.” DEI refers to diversity, equity, and inclusion.
“If we don’t, then China will easily catch us in the AI race. Put it in the NDAA, or pass a separate Bill, and nobody will ever be able to compete with America,” he stated, referring to the National Defense Authorization Act.
His statement came amid reports that House Republican leaders were planning to include language in the NDAA that would prevent states from regulating AI.
Florida Gov. Ron DeSantis has opposed the plan, saying that stripping states of AI regulatory power would be “a subsidy to Big Tech” and would block states from “protecting against online censorship of political speech, predatory applications that target children, violations of intellectual property rights, and data center intrusions on power/water resources.”
“The rise of AI is the most significant economic and cultural shift occurring at the moment; denying the people the ability to channel these technologies in a productive way via self-government constitutes federal government overreach and lets technology companies run wild. Not acceptable,” DeSantis stated on X.
AI Dominance Pursued
Since taking office on Jan. 20, Trump has pursued policies aimed at securing U.S. dominance in AI development, including efforts to remove regulatory barriers on AI developers.
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The White House’s “AI Action Plan,” released in July, states that the country seeks to build “the most powerful AI systems in the world,” and recommends that the federal government block AI-related funding to states with AI regulations.
“AI is too far important to smother in bureaucracy at this early stage, whether at the state or Federal level. The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds, but should also not interfere with states’ rights to pass prudent laws that are not unduly restrictive to innovation,” it stated.
In July, Trump signed an executive order targeting what he called “woke AI.” The order directs federal agencies to procure only large language models that are “truth-seeking” and politically neutral—AI models that the administration deems “do not manipulate responses in favor of ideological dogmas such as DEI.”
FOMC Minutes Expose Fractured Fed; “Many” See No Tariff Inflation, “Several” Fear Disorderly Drop In Stocks
Since the last FOMC meeting (Oct 29th), gold is the best performing asset (along with the dollar) as bonds, stocks, and oil are all down notably…
Source: Bloomberg
Rate-cut odds for the December meeting continued to tumble after Powell’s hawkish comments (and the follow-up FedSpeak). Today saw BLS confirm no more payrolls data before the next Fed meeting and that pushed expectations even more hawkishly lower…
Source: Bloomberg
As a reminder, The Fed cut rates by 25bps in the October meeting to 3.75-4.00%, with two dissenters: 1 hawkish (Schmid) and 1 dovish (Miran). Other non-voters have been out recently suggesting they did not support a cut.
While markets have made up their minds on the rate-cut decision, as we noted earlier, we’ll be watching for color on the hawk/dove split; but, most eyes will be on discussions around The Fed’s balance sheet (the end of QT) and the level of reserves being somewhere between ‘abundant’ and ‘ample’.
So, what does The Fed want us to know it was thinking during the meeting?
On the rate-cut decision, there is a hawkish bias (‘Several’ is less than ‘many’)
*FED: `SEVERAL‘ SAID DECEMBER CUT `COULD WELL BE’ APPROPRIATE
Several participants said another cut in December “could well be appropriate in December if the economy evolved about as they expected” before the next meeting.
*FED: `MANY‘ SAW DECEMBER RATE CUT AS LIKELY NOT APPROPRIATE
“Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year,” the minutes said.
The doves are doing God’s work on the jobs market…
“Most participants suggested that, in moving to a more neutral policy stance, the Committee was helping forestall the possibility of a major deterioration in labor market conditions.”
But… the hawks are there too to warn you off…
“Most participants noted that, against a backdrop of elevated inflation readings and a very gradual cooling of labor market conditions, further policy rate reductions could add to the risk of higher inflation becoming entrenched or could be misinterpreted as implying a lack of policymaker commitment to the 2 percent inflation objective.“
AI/Valuations are in the back of their minds…
Some participants commented on stretched asset valuations in financial markets, with several of these participants highlighting the possibility of a disorderly fall in equity prices, especially in the event of an abrupt reassessment of the possibilities of AI-related technology.
A couple of participants cited risks associated with high levels of corporate borrowing.
Finally, and perhaps the most notable line was with regard to inflation…
Simply put, the Minutes suggest that tariff inflation is no longer a pressing concern…
“Many of these participants also judged that, with more evidence having accumulated that the effect on overall inflation of this year’s higher tariffs would likely be limited, it was appropriate for the Committee to ease its policy stance in response to downside risks to employment.”
…which helps explain why so “many” of The Fed are increasingly focused on jobs.
Full Breakdown:
On current outlook:
Participants generally judged that upside risks to inflation remained elevated and that downside risks to employment were elevated and had increased since the first half of the year.
Many participants agreed that the Committee should be deliberate in its policy decisions against the backdrop of these two-sided risks and reduced availability of key economic data.
Most participants suggested that, in moving to a more neutral policy stance, the Committee was helping forestall the possibility of a major deterioration in labor market conditions.
Many of these participants also judged that, with more evidence having accumulated that the effect on overall inflation of this year’s higher tariffs would likely be limited, it was appropriate for the Committee to ease its policy stance in response to downside risks to employment.
Most participants noted that, against a backdrop of elevated inflation readings and a very gradual cooling of labor market conditions, further policy rate reductions could add to the risk of higher inflation becoming entrenched or could be misinterpreted as implying a lack of policymaker commitment to the 2 percent inflation objective.
Participants judged that a careful balancing of risks was required and agreed on the importance of well-anchored longer-term inflation expectations in achieving the Committee’s dual-mandate objectives.
On the neutral rate and financial conditions
Some said policy would remain restrictive even after a 0.25ppt cut.
Some, citing resilient activity, supportive conditions or real-rate estimates, said policy was not clearly restrictive.
Some remarked that financial conditions we re supportive of activity.
On Inflation
Participants noted inflation had moved up and remained somewhat above target; core inflation stayed elevated.
Several said inflation excluding tariff effects was close to target.
Many said inflation had been above target for some time with little sign of timely return to 2%.
Most noted further rate cuts could add to risk of higher inflation becoming entrenched or could be misinterpreted as lack of commitment to 2% inflation objective
Several cited persistent core non-housing services inflation as keeping inflation above 2%.
Many expected further pickup in core goods inflation from tariff pass-through.
Several highlighted uncertainty around tariff effects and firms’ delayed pricing.
Several reported businesses planned gradual price increases due to higher tariff-related input costs.
A few said productivity gains via automation or AI could limit pass-through.
A few said a softer labor market would restrain pressures.
A couple said lower immigration would lessen housing demand and strengthen housing disinflation.
Many noted risks that prolonged above-target inflation could raise longer-term expectations.
Labor market & growth
Participants observed slowed job gains and a higher unemployment rate before the shutdown.
Participants saw indicators showing gradual softening without sharp deterioration.
Many attributed the slowdown to reduced labour supply and less labour demand amid uncertainty.
Many said structural factors, including Al-related investment, were dampening labor demand.
Participants generally expected further gradual softening with less dynamism.
Several warned low turnover and hiring hesitancy posed downside risks.
A few saw rising unemployment in sensitive groups or concentrated job gains as signalling broader weakness.
Some noted persistent divergence between subdued job growth and moderate GDP growth, possibly due to productivity gains and demographic constraints.
Participants noted moderate activity; many reported firmer consumer spending.
Many highlighted divergence across income groups, with high-income households supporting consumption and lower-income households showing price sensitivity.
A couple warned that reliance on high-income spending created vulnerability.
A couple noted continued housing-market weakness despite some stabilisation.
Many highlighted strong technology and Al-related investment.
A few said lower business taxes or regulatory easing would support activity.
Some remarked that financial conditions we re supportive.
A few cited ongoing agricultural headwinds from low crop prices, high input costs and weak foreign demand.
Balance sheet & QT & liquidity
Almost all said it was appropriate to conclude runoff on 1 December or could support doing so.
Most participants favored a fed portfolio matching the composition of treasuries outstanding
Asset prices:
Several participants highlighted possibility of disorderly fall in stock prices, especially in event of abrupt reassessment of ai- related prospects.
Housing market and real estate commentary
A couple noted continued housing-market weakness and affordability constraints.
Agricultural commentary
A few cited headwinds from low crop prices, elevated input costs and weaker foreign demand.
Discussions of Artificial Intelligence
A few participants suggested that potential recent productivity gains achieved through automation and AI may help businesses support their profit margins and limit the extent to which cost increases are passed on to consumers
Many participants remarked that structural factors such as investment related to AI and other productivity-enhancing technologies may be contributing to softer labor demand.
Some participants noted the apparent divergence between subdued job growth and moderate GDP growth, with several suggesting that this pattern might persist over time as advances in AI boost productivity growth while demographic factors constrain labor supply.
Regarding the business sector, many participants highlighted strong investment in technology, particularly spending related to AI and data centers. Some participants suggested that those investments could boost productivity and thus aggregate supply.
Broad equity indexes continued to rise over the period, with the largest technology companies performing strongly on market participants’ optimism about artificial intelligence (AI). The manager noted that rising stock prices were consistent with expectations for continued robust growth in earnings.
NATO Scrambles Jets Amid One Of Deadliest Russian Attacks On Western Ukraine
Russia overnight carried out its typical aerial and drone strikes on Ukraine, but this time escalated attacks in Ukraine’s West, which apparently were close enough to the border to cause alarm in nearby Poland and Romania.
The two NATO member countries scrambled jet fighters in response amid the massive Russian and drone and missile strikes which killed at least 25 people, some of which were reported as children.
Romania’s defense ministry said that during the attacks on Ukraine a Russian drone entered its sovereign airspace. Its military then scrambled two Eurofighters which are part of NATO’s fleet. An additional pair of Romanian F-16s were also sent.
Simultaneously, Polish jets were launched to protect Polish airspace on Wednesday morning. “In connection with the attack by the Russian Federation carrying out strikes on facilities located on the territory of Ukraine, Polish and allied aviation is operating in our airspace,” Poland’s military announced. All of this caused some regional commercial airport closures:
Poland temporarily shut down two airports in its southeast, Rzeszow and Lublin, the Polish Civil Aviation Authority said.
The air hubs were closed to provide freedom for warplanes, the regulator explained.
Russian strikes also focused on Kharkiv, resulting in dozens injured, in the overnight hours. These eastern strikes have become frequent, but large-scale attacks on Western Ukraine are much more rare.
Major direct hit on a residential area captured on video from the early morning hours…
Just look at this.
Ukraine’s Ternopil just this morning.
A Russian missile (Kh-101?) directly hits a residential block.
At least 25 killed, including 3 kids.
And of course, Russian propaganda and Telegram channels are wildly rejoicing in ecstasy. pic.twitter.com/zUB4xNZb4o
BBC describes of the carnage, “At least 25 people have been killed including three children in a Russian drone and missile attack on the western city of Ternopil that hit two blocks of flats, Ukrainian rescue officials say.”
“Another 73 people were wounded, 15 of them children, officials said, in one of the deadliest Russian strikes on western Ukraine since Moscow launched a full-scale war in 2022,” the report continues.
The attack comes at a moment of ‘secretive’ US-Russia talks based on a new 28-point peace plan by the Trump White House, but also as Europe is trying to rally bigger, urgent support to Kiev:
The Western cities of Lviv and Ivano-Frankivsk were also hit, which wounded over 30 people, and resulted in buildings and cars destroyed and set ablaze.
Russia is rejecting Ukrainian and European assertions it attacked civilian residencies, instead issuing a statement claiming the targets were military-linked defense industry buildings and energy sites:
“In response to Ukraine’s terrorist attacks on civilian targets in Russia this morning, the Russian armed forces launched a massive strike with long-range, air- and sea-based precision weapons, including hypersonic ballistic Kinzhal missiles and strike drones against the defense industry and energy facilities that supported its operation, as well as against long-range drone depots, located in western Ukrainian regions. The strike targets were achieved, and all designated objects were hit,” the statement read.
These are two ordinary residential buildings in Ternopil. Not military targets, but simply someone’s homes.
This morning Russia struck them, killing at least 10 people and injuring four dozen more, including 12 children.
Ukraine’s air force subsequently said close to 500 drones were sent by Russia in the attacks, and nearly 50 missiles. The statement said it intercepted the majority of them. But the several that got through clearly caused a lot of devastation.
The timing of this could derail the fresh Trump admin efforts to achieve peace in Ukraine. Certainly the hawks in Europe will have more reason to reject any plan seen as offering too much compromise to Moscow.
