Washington, DC

1. Saudis push for F-35s
2. Iran war widens
3. Cornyn, Tillis unsold
4. Fed holds rates steady
5. AI titan blitz

The S&P 500 ▼ 1.5% after Federal Reserve Chair Kevin Warsh made remarks that may signal rate hikes are coming soon. 

Saudi defense minister flies in to lobby for F-35s

Saudi Arabia is intensifying its lobbying to complete its purchase of F-35 fighter jets — including through a personal push by Defense Minister Khalid bin Salman, who met with senior Trump administration officials in Washington this week. The kingdom sees a window of opportunity quickly closing, as Semafor’s Lauren Morganbesser and Matthew Martin scoop. With the midterms approaching, Saudi officials want to build on momentum from last week’s nuclear agreement with the US and get an F-35 deal done, according to people familiar with the defense minister’s plans. F-35 sales and wider security cooperation were on the agenda for his Washington visit, the people added. One of the people familiar with the defense minister’s plans said he also met with Vice President JD Vance. The Saudi efforts will likely face opposition in Congress from lawmakers seeking to maintain Israel’s military edge in the region.

Iran conflict spreads

The conflict in Iran continues to widen. President Donald Trump said on Fox News that the strikes on Iran-backed militants in Iraq launched by the US and Saudi Arabia early this morning were “coordinated with the Iraqi government,” though officials in Baghdad disputed the claim. The Iraqi prime minister canceled his trip to Riyadh in response. Jordan, meanwhile, intercepted Iranian missiles targeting US military personnel. Iran’s attacks on the kingdom in recent weeks have inspired hundreds of prominent Jordanians to sign an open letter calling on the US to leave. Meanwhile, drones hit a gas storage tanker in Egypt’s Mediterranean port, though no group immediately took responsibility for the attack. When asked about the attacks in Jordan, Trump replied with a series of expletives and a threat. “We’ll be hitting them hard,” he said.

Cornyn, Tillis unsatisfied with Blanche concessions

Todd Blanche’s nomination to become attorney general is in serious trouble. Sen. John Cornyn, R-Texas, has not received a written document from the Justice Department limiting the president’s tax immunity deal with the IRS — and he won’t vote for Blanche in the Judiciary Committee without it. “They just need to make the decision. And if they do, then we’ll proceed with the markup tomorrow,” Cornyn said this afternoon. “We’re trying to make it easy for them. They won’t take the help.” Sen. Thom Tillis, R-N.C., another Judiciary Committee member, is standing with Cornyn and said they’ve made some progress: “The language related to rendering the 1776 [anti-weaponization] fund inoperative is something that Senator Cornyn’s comfortable with.” But Blanche could have problems on the Senate floor, too: Sen. Bill Cassidy, R-La., said he’s concerned about the administration’s “lawfare, going after people. … Where does it stop?”

— Burgess Everett

A divided Fed votes to hold rates steady

The Federal Reserve will leave interest rates unchanged, a reprieve for Trump that undercuts new Chair Kevin Warsh’s hawkish rhetoric. Three bank presidents said the Fed should have raised rates instead, reflecting a lack of confidence in the government’s report that inflation eased in June before the Iran war restarted. “The five-plus years of inflation above target cannot be cured in nine weeks — or by a single month of modest price decreases,” Warsh said, reiterating his commitment to bringing inflation down to 2%. Asked to reconcile Wednesday’s decision with his lip service to lower prices, Warsh urged patience: “We will deliver … but the suggestion that we’re going to be able to do it with our magic wands is one I want to disabuse you and everyone else of.” Later, Trump said he wasn’t disappointed in Warsh for not lowering rates.

— Eleanor Mueller

Tech titans blitz Washington

AI titans are on a lobbying blitz this week, staking out competing views on which of the technology’s risks Washington should prioritize. OpenAI’s Sam Altman made clear to lawmakers today that he’ll play ball with them as they craft legislation and the Trump administration fine-tunes its model review process (he also briefed senators on his company’s upcoming model). Mark Zuckerberg is arguing that the value at stake is individual liberty, a theme the Meta CEO hit in a rare, longform interview published by The New York Times and an op-ed published by The Wall Street Journal. Nvidia CEO And Jensen Huang told lawmakers that national competitiveness is at stake if companies are hemmed in too tightly. He also met with Commerce Secretary Howard Lutnick, as the Trump administration looks into whether the company violated export rules in selling chips to China, Axios reported.

White House

• President Trump announced a $22 billion makeover of Washington’s Dulles International Airport.

Campaigns

• Former President Barack Obama recorded a campaign ad playing basketball with the Democratic nominee for Senate in Iowa, Josh Turek, a wheelchair basketball Paralympian.
• Republican Rep. Max Miller’s relatively safe Ohio seat is now in play this fall as accusations of domestic violence rock his campaign. — NYT

Congress

• The Senate passed Democratic Nevada Sen. Jacky Rosen’s resolution opposing any clemency for Jeffrey Epstein associate Ghislaine Maxwell.
• Former National Institute of Allergy and Infectious Diseases Director Anthony Fauci invoked the Fifth Amendment at a Senate hearing, declining to answer senators’ questions more than 100 times.

Technology

• The Trump administration is repurposing federal land for AI data centers. — NYT

Courts

• Three men pleaded guilty to terrorism-related charges for plotting to assist the Islamic State.

World

• Iran is expected to receive 400 Chinese-made shoulder-fired air-defense missile launchers within weeks. — Reuters

Correction

• This morning’s newsletter cited incorrect reporting that senators would consider another Democrat-sponsored war powers resolution on Wednesday afternoon.

— President Trump on the people movers at Dulles.

Laura McGann, editor

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

Graph Massara and Lauren Morganbesser, copy editors

Contact our reporters:

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