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Israel/Iran ceasefire holding up for now... The fragile ceasefire between Israel and Iran is holding up for now amid pressure from President Donald Trump. He scolded both sides, especially Israel, early this morning for violating the truce only hours after brokering the ceasefire. He later said Israel called off further attacks at his command to preserve the deal to end a 12-day air war with Iran.
Both countries sent signals the conflict was over, at least for now.
Meanwhile, acting U.S. envoy to the United Nations Dorothy Shea told the UN Security Council U.S. strikes on Iran’s nuclear facilities “effectively fulfilled our narrow objective: to degrade Iran’s capacity to produce a nuclear weapon.”
Powell resists pressure to cut interest rates... Fed Chair Jerome Powell told the House Committee on Financial Services should keep interest rates steady for now, citing inflation risks amid uncertainty with President Donald Trump’s tariffs/trade policy. In the first day of his semiannual testimony, Powell noted that any resulting inflation from the tariffs policy “could be short lived” or “could instead be more persistent.”
Powell said he would not set the stage for a rate cut at the Fed’s July meeting, as Federal Reserve governors Michelle Bowman and Christopher Waller have recently suggested, or at any other meeting. “I don’t want to focus on any specific meeting. I don’t think we need to rush... I think if inflation pressures remain contained, we’ll get to a point where we’ll cut rates sooner rather than later,” he said. “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said.
Powell has been under pressure from Trump to cut interest rates.
While some economists viewed Powell’s comments as a tad hawkish, most expect the Fed to remain in wait-and-see mode, with any forthcoming adjustments to monetary policy remaining dependent on incoming economic data.
Consumer confidence deteriorates in June... U.S. consumer confidence unexpectedly deteriorated in June as households became increasingly worried about job availability. The Conference Board’s consumer confidence index dropped 5.4 points to 93.0 this month, erasing nearly half of the sharp gain in May.
The share of consumers who viewed jobs as being “plentiful” dropped to 29.2%, the lowest since March 2021, while 18.1% of consumers said jobs were “hard to get.” The survey’s so-called labor market differential of the two categories narrowed to a four-year low of 11.1 from 12.7 last month.
Consumers’ one-year inflation expectations decreased to 6.0% from 6.4% the previous month, but those expecting interest rates to rise was the highest since October 2023.
Senate parliamentarian approves Ag Committee’s revised SNAP cost-share provision... U.S. Senate Ag Chair John Boozman (R-Ark.) announced the Senate parliamentarian has ruled the committee’s revised state cost-share section (Section 10105) for SNAP complies with the Bryd rule.
“This paves the way for important reforms that improve efficiency and management of SNAP while encouraging responsible use of taxpayer dollars. In 2023 alone, over $10 billion was misspent when administering this program – underscoring the need for stronger accountability. Our commonsense approach encourages states to adopt better practices, reduce error rates, be better stewards of taxpayer dollars, and prioritize the resources for those who truly need it,” Boozman said.
Key Features of the Revised Senate Cost-Share Provision
- Targeted cost-sharing based on error rates: Under the Senate’s revised plan, states are only required to contribute to SNAP benefit costs if their payment error rate exceeds 6%. The contribution scale is:
- 0% for error rates under 6%
- 5% for error rates between 6% and 8%
- 10% for error rates between 8% and 10%
- 15% for error rates of 10% or higher
- Calculation timeline: States may use either their fiscal year (FY) 2025 or FY 2026 payment error rate to determine their required match for FY 2028. For FY 2029 and beyond, the match is based on the payment error rate from three fiscal years prior.
- Administrative cost changes: The Senate proposal raises the state share of SNAP administrative costs from 50% to 75%, starting in FY 2027 — one year later than the House version.
The House-passed bill would have imposed a minimum 5% cost-share on all states, with contributions rising to 25% for those with the highest error rates. That approach was projected to shift billions in costs to states and potentially impact millions of beneficiaries. By contrast, the Senate version exempts states with low error rates from new costs and caps the maximum state contribution at 15%.
The parliamentarian’s approval allows the revised cost-share provision to remain in the reconciliation package as it moves forward in the Senate. The broader bill, which includes wide-ranging changes to SNAP and other agriculture programs, is expected to be considered before the July 4 deadline set by Senate leadership. State payment error rates, which determine cost-sharing obligations, are released annually at the end of June.
Senate GOP scrambles to finalize tax bill details before vote... Senate Republican leaders are racing to wrap up negotiations on their major tax package, aiming for a floor vote by the end of the week — but last-minute disagreements over state-and-local tax (SALT) deductions and Medicaid provisions are raising doubts about the schedule.
Senate Majority Leader John Thune (R-S.D.) said the Senate remains “on schedule,” but ongoing talks over a SALT cap — still unresolved between the House’s $40,000 deduction and the Senate’s $10,000 proposal — and Medicaid-related changes could push the process into the weekend. Lawmakers are also bracing for a “vote-a-rama” packed with Democratic amendments and further parliamentary rulings, complicating the path forward.
Key sticking points include:
- SALT deduction: House Republicans support a $40,000 cap, while Senate Republicans may offer the same amount but with a lower income threshold.
- Rural hospitals: Discussions continue over aid for rural hospitals to offset Medicaid provider tax changes, but the details remain murky and may not satisfy holdout senators like Josh Hawley (R-Mo.).
- Energy tax credits: Productive negotiations have taken place over clean-energy tax credits originally part of the Inflation Reduction Act, but agreement on healthcare and Medicaid measures is still pending.
House Appropriations panel advances divisive FY 2026 Ag funding bill... The House Appropriations Committee narrowly approved a $25.5 billion fiscal year (FY) 2026 Agriculture spending bill, advancing the measure by a 35-27 vote despite Democratic resistance and sharp debate over proposed cuts to food and farm programs. The party-line vote followed contentious discussions on how the House reconciliation bill would affect SNAP retailers and farmers’ access to healthcare, with Democrats unsuccessfully pushing for further economic impact studies.
The bill allocates $21.9 billion for USDA — a decrease of $807 million from FY 2025 — and $6.8 billion for the Food and Drug Administration, partly funded by user fees.
Democrats centered their criticism on the reconciliation bill, which would impose a new baseline state cost-share for SNAP benefits, potentially rising to 25% for states with high payment error rates. Rep. Adriano Espaillat (D-N.Y.) warned that such changes could force many independent grocery stores in low-income areas to close, given their reliance on SNAP revenue. His amendment, which would have required USDA to report on the economic impact to these retailers, was defeated 28-34.
The bill’s SNAP allocation stands at $118.1 billion, though Republicans signaled that figure will be updated once reconciliation changes are finalized. The Senate is weighing a less stringent cost-sharing plan, with a cap at 15% and only applying to states with elevated error rates, but Senate Ag Chairman John Boozman (R-Ark.) said Monday that the proposed 2028 implementation date may be delayed following advice from the parliamentarian.
Democrats also spotlighted the impact of Medicaid cuts on farmers. Rep. Mark Pocan (D-Wis.) proposed an amendment for a Government Accountability Office report on the potential harm to rural healthcare and the farm supply chain; that measure was also voted down.
Republicans, led by Appropriations Agriculture Subcommittee Chair Andy Harris (R-Md.), argued the reforms are needed to address ballooning deficits and federal debt, calling the state cost-share and tighter work requirements “reasonable.” Next step: The full House is expected to consider the bill later this summer, with major SNAP and Medicaid provisions still in flux as bicameral negotiations continue.