In hindsight, the telltale signs of trouble were piling up: the Zoom calls where the owner kept his camera off; the angry pushback from his brother when investors asked for invoices to back up their loans; the frequent late payments to suppliers; and the whispers of large off-the-books financing arrangements.

That so few outside of First Brands had a full view of the red flags around the auto-parts supplier before it imploded last month is a stark example of the growing risks of money flooding into the opaque world of private financing. By the time it all came crashing down, the company’s sprawling network of auto-parts factories and distribution centers was on the hook for more than $10 billion to some of the biggest firms on Wall Street: Jefferies, UBS and Millennium, among others.

While the full extent of the damage—and what exactly went wrong—remains unclear 11 days after First Brands declared bankruptcy, the stakes rose Wednesday night when one of its financial partners made an emergency court filing calling for an independent investigation of $2.3 billion tied to the company that had “simply vanished.” In the meantime, the repercussions are rippling through the financial industry and beyond. —David E. Rovella

What You Need to Know Today

Donald Trump’s weaponization of the US Department of Justice accelerated on Thursday as his prosecutors obtained an indictment of New York Attorney General Letitia James, a key figure in the various investigations, lawsuits and prosecutions of the twice-impeached president.

The indictment of James, a Democrat, for mortgage fraud, was handed up two weeks after a separate indictment of FBI Director James Comey. It’s the latest indication of the 79-year-old Republican’s effort to use the Justice Department to pursue political foes in a way never seen in America’s 249-year history. Trump, a convicted felon, has also threatened Democratic senators, governors and mayors with arrest and imprisonment.

James, who has denied any wrongdoing, accused the Justice Department of concocting a bogus criminal case to settle Trump’s personal vendetta against her after she won a staggering judgment against him and his companies in a lawsuit alleging he lied to banks about the value of his assets. As with Comey, Trump’s repeated public musings and social media posts about James are likely to figure in a defense effort to toss the case as malicious prosecution.

New York Attorney General Letitia James during Donald Trump’s Manhattan civil trial for inflating the value of his assets in financial records. Photographer: Michael M. Santiago/Getty Images

The most recent spike in inflation expectations poses a bigger risk than past episodes to the US central bank’s ability to tame price pressures, according to a recent paper from the Federal Reserve Bank of Boston. Households’ rising estimates for one-year ahead inflation are not being driven by expectations for higher prices for volatile items like food and gas—as was the case during the pandemic. This increases the risk that inflation expectations will remain above the Fed’s 2% goal.

Consumers’ estimates of inflation have been rising this year as households brace for higher prices on imported goods tied to Trump’s tariffs. Those measures are also closely watched by Fed officials, as they seek to assess whether such levies will result in a one-time price shock or a more persistent inflation surge.

A US judge has temporarily imposed stricter limits on when federal agents can use physical force and make arrests during Chicago-area demonstrations against the Trump’s immigration dragnet. US District Judge Sara Ellis entered a 14-day order on Thursday in response to a lawsuit accusing Trump administration agents for illegally using excessive force during recent protests outside a migrant detention facility in the Broadview suburb, and of targeting journalists and demonstrators for arrest in violation of First Amendment speech rights. It’s one of several lawsuits before federal courts across the country challenging Trump’s use of heavily armed paramilitary forces and National Guard soldiers in cities run by Democratic politicians.

The political power players aren’t the only ones jockeying to shape the shifting balance of power in a turbulent France. The country’s business elite is courting the head of the Socialist party, Olivier Faure, who’s seen as a potential replacement for outgoing Prime Minister Sebastien Lecornu and whose party holds a pivotal swing vote in parliament. On Wednesday, Faure is said to have attended a dinner with France’s powerful business lobby AFEP.

Olivier Faure Photographer: Bastien Ohier/Getty Images

Emmanuel Macron said he would name a new prime minister by Friday evening—a decision that will define the rest of his tenure as president and will put the stability of France and its economy in the balance. The new premier will need to propose a 2026 budget by Monday in order to get the legislation adopted by the end of the year through the normal process. Otherwise the National Assembly will need to pass an emergency bill to keep the government funded.

What You’ll Need to Know Tomorrow