Up First from NPR - Fed Keeps Interest Rates, Texas Redistricting, US Middle East Envoy In Israel

Episode Date: July 31, 2025

The Federal Reserve held interest rates steady this week despite demands for lower rates from President Trump, Republicans in Texas released a proposal for a new state congressional map, and the US special envoy to the Middle East is traveling to Israel at a moment when the UN warns Gaza is on the verge of all out famine.Want more comprehensive analysis of the most important news of the day, plus a little fun? Subscribe to the Up First newsletter. Today's episode of Up First was edited by Rafael Nam, Ben Swasey, Hannah Bloch, Janaya Williams and Alice Woelfle. It was produced by Ziad Buchh, Nia Dumas, and Christopher Thomas. We get engineering support from Stacey Abbott. And our technical director is Carleigh Strange.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

I stepped outside this, it's extremely hot in Washington and I shut my door and there were just all kinds of insects on the doors. Like, thank goodness I got that closed before they ventured in. They do seek cooler environments. That's for sure. Oh, do they really? Yeah. I didn't know that.

Yeah. When flies get into my house, they always go to the bathroom. The bathroom is the coolest room in my house. Do they flush? Um... Two members of a Federal Reserve Committee pushed for lower interest rates. I've tried to lay out very clearly in economic terms why we could do this. The majority stuck with Chairman Jerome Powell and held rates steady. So what happens next? I'm E. Martinez with Steve Inskeep and this is Up First from NPR News.

Texas Republicans obeyed the president's call to propose a new election map. The gerrymander is openly designed to skew the results to give Republicans extra seats in Congress. What will Texas approve in the end and how will Democrats respond? Also, another day passes with people hungry in Gaza. Zero trucks made it to the UN warehouses where it needs to be distributed. The markets are skyrocketing. It's still empty. What can a U.S. envoy do about it in a trip to Israel? Stay with us.

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NPR's Scott Horsley took an interest in this story. Hey there, Scott. Good morning, Steve. So what is the difference of opinion here? Well, the president wants lower interest rates and he's been very critical of the Fed for not moving more aggressively in that direction. It's not unusual for presidents to want lower interest rates to juice the economy in the short run.

It is unusual for them to be as vocal as President Trump has. But the fed was set up to be insulated from that kind of pressure, precisely so it can make hard decisions when it has to to keep inflation under control. Now inflation is not nearly as high as it was a few years ago but it's still higher than the Fed would like and a lot of policymakers of the Fed are worried that the president's own tariffs could push prices higher still. Chairman Jerome Powell noted yesterday that the government's collecting about 30 billion dollars a month in tariffs. That money has to come from someplace. Powell says so far it doesn't look as though foreign

companies are picking up very much of the tab. Instead, it's mostly being paid by US importers, retailers, and in some cases, consumers. It's starting to show up in consumer prices. We expect to see more of that. And we know from surveys that companies feel that they have every intention of putting this through to the consumer.

But the truth is, they may not be able to in many cases. That's because consumers are more price-sensitive now than they were a few years ago, so it may be that American businesses have to eat more of the tariff costs themselves. Okay, so the interest rates are set by committee. The vote is usually unanimous, but not this time. What happened? Yeah, committee votes are often unanimous. Sometimes there's a stray no vote. Yesterday was the first time in more than 30 years that two Fed governors broke with their colleagues. Chris Waller and Michelle Bowman both said they would have preferred to cut rates by a quarter point this week. Waller gave a talk earlier this month where he argued that any

price hikes associated with tariffs are likely to be a one-time thing, so they're not going to keep pushing prices up month after month and put upward pressure on inflation. He also thinks the job market is weaker than that low 4.1% headline unemployment rate would indicate. So Waller thinks the Fed should cut rates now before the job market gets any worse. That's my view. I'm kind of in the minority on this, but I've tried to lay out very clearly in economic terms why we could do this. It's not political. Waller and Bowman are the two Trump appointees on the Fed board. They were in the minority this week, but it's possible there will be more votes for a rate cut at the next Fed

meeting in September. Well, I guess they're supposed to be driven by the data rather than politics. Do they get more data between now and then? Yes, we'll have two more months of jobs numbers, two more months of inflation data, and that could offer a clearer picture of just how Trump's tariffs are playing out. But there's a wrinkle. The Labor Department said this week it's having to scale back the number of price checks it does each month by about 15 percent because of the president's federal job cuts.

So the government's inflation yardstick might not be as reliable as it was in the past. Now Powell was careful not to comment on the job cuts, but he did say both the Fed and lots of private businesses really depend on these government economic indicators, and it's important they be accurate. The government data really is the gold standard in data, and we need it to be good and be able to rely on it. We'll have to make do with what we have, but I certainly hope that we get what we need. Now, we will get another important signal about the economy tomorrow. That's when the Labor Department reports on jobs and unemployment for the month of July. And BR Scott Horsley is monitoring the signals. Scott, thanks so much.

You're welcome. As expected, state lawmakers in Texas have a proposal for new voting districts for Congress. The rare mid-decade redistricting plan is by Republicans with the goal of helping Republicans keep control of the U.S. House, and it has the backing of President Trump. And Pierce Hansi Lo Wang has been tracking this and joins us now. Good morning. Good morning. Good morning, Steve. Okay, so what is this map? What's it look like?

It looks like the kind of map that President Trump has said he wants, as we've talked about before, Trump has said he wants Republicans to pick up five additional congressional house seats in Texas after next year's midterm election. There's an early analysis by the Cook Political Report that says this map could help Republicans win 30 districts in Texas.

Right now, Republicans have 25. But we should keep in mind there could be surprises in how the voters in these proposed districts would actually vote. Fair point, because sometimes the voting patterns change. But the intent here, the open, explicit intent is to skew the results toward Republicans. How will this get passed? It's not clear at this point. You know, this is the first proposal by Republicans in the Texas House of Representatives, and it's still relatively early. This could be a weeks long

process. And a key thing here to keep in mind is that even if Texas lawmakers pass this map or another one, there will likely be lawsuits. And what would be the legal arguments here? Well, this proposal makes a lot of changes to the current map, including to four districts in the Houston and Dallas areas. Those are the same four districts that two Trump officials at the Justice Department called, quote, unconstitutional. This is in a letter to Texas' governor.

Now, a lot of legal experts don't buy that argument, and they say undoing those districts could raise some actual constitutional problems, and national Democratic leaders have said they are prepared to sue. And they're not just relying on the courts, it seems to me. Democrats are preparing all sorts of responses, or at least discussing all sorts of responses across the country. That's right. You know, they're looking into ways of picking up more house seats in other states, but they are in a real bind because over the years they have supported redistricting rules and independent commissions in states like California and New York that are supposed to prevent this

party-driven mid-decade redistricting that we're seeing right now in Texas. And there was an interesting statement this week from former U.S. Attorney General Eric Holder. He chairs the National Democratic Redistricting Committee now, and the statement says, quote, We do not oppose on a temporary basis responsible, responsive actions to ensure the foundations of our democracy are not permanently eroded, unquote. So it sounds like some top Democrats are on board with trying to go toe-to-toe with this Republican gerrymandering, at least for now. Wow, and undoing some of their own efforts at reform in blue states. What other states are talking about redistricting here, though?

Well, Ohio has to draw a new congressional map, as we've talked about before, and there may be maps because of lawsuits in a lot of other states, Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Utah, and Wisconsin, a lot of states. And any changes could help determine whether Republicans keep the House or lose it to the Democrats because it's just so close. It's just amazing to think about this because hypothetically what we're talking about is the exact same distribution of votes between Democrats and Republicans. But depending on where you draw the lines, you could have a difference in who controls the House of Representatives.

A lot at stake. Hansi, thanks so much. You're welcome, Steve. NPR's Hansi Lilwang. The US's Middle East envoy, Steve Witkoffff is in Israel today, a week after ceasefire talks with Israel and Hamas stalled yet again in Doha, Qatar. But since then, global anger over the hunger in Gaza has grown, pushing Israel to let in some additional food.

NPR's Emily Fang is with us now from Tel Aviv. Witkoff was in Israel in May, so why is he returning now? Right. Well, a person familiar with the details but who is not authorized to speak publicly told us Wittkopf is going to meet with Israeli Prime Minister Benjamin Netanyahu to discuss the humanitarian crisis in Gaza and to discuss getting hostages who are still in Gaza back. Now Israel this week has been trying to project it is in lockstep with the US. Here's Israel's Foreign Minister Gideon Sarr this week. He was asked by a reporter about hunger reaching famine threshold levels in Gaza. In response, he first thanked President

Trump for his friendship and then he said this. It will be very hard to try to find gaps between Israel and the US in terms of policies, including with regards to Gaza Strip. But these last couple of days we are seeing signs of some daylight emerging between Israel and the US on the former's war against Hamas and Gaza. Trump this week directly contradicted Benjamin Netanyahu saying there is starvation in Gaza and Trump said the first lady has also seen photos of hungry children in Gaza and he called these photos terrible and so each side has been angling this week to put more pressure on the other so we're seeing far-right Israeli politicians who have

been discussing annexing Gaza again moving Palestinians and mass out of Gaza if the hostages are not returned. Hamas has been putting out statements echoing criticism of Israeli restrictions on food into Gaza. And now, Witkoff himself is arriving in the region. Yeah, and that pressure you mentioned is now global. I mean, France became the first G7 country to say it would recognize Palestine as a state. Right, last week. And then the UK said it would do so too if there was not a ceasefire by September. Just overnight my time, Canada's Prime Minister announced Canada intends to recognize Palestine by September as well if the Palestinian Authority, which governs parts of the West Bank now, makes

certain political reforms. There's no sign the US intends to follow all of this and actually Trump said that Canadian recognition of Palestinian statehood would quote make it very difficult for us to make a trade deal with them. But that aside, all these moves are making huge waves in Israel. I'm seeing a lot of signs of soul searching and also weariness over here over the fact that Israel is still fighting this grinding war and yet they've been unable to bring home hostages kidnapped by Hamas still being held in Gaza. One headline I saw here from a top Israeli newspaper, quote, how we lost the world. And there's also more pressure on Hamas. Saudi Arabia and the Arab League this week called on

Hamas to relinquish power and to disarm. And we know from our reporting that's been tougher than ever for people in Gaza where this week a UN back panel said it's seeing, quote, the worst case scenario of famine unfolding. So what's been happening there? So starting Sunday Israel has been pausing fighting for about 10 hours a day to let in more food trucks but in reality we have been reporting that very little food is actually making it to people who need it. Aid organizations we've been talking to say Israel has not permitted them to bring in the volume of food and aid that they would like to see.

And that scarcity means desperate people and gangs are looting these food trucks. Meanwhile, Israel does continue to strike Gaza and they're conducting ground operations still. And so data kept by Gaza health officials indicate the official death toll from this war surpassed 60,000 people this week and more than 18,000 of those dead are children. That's NPR's Emily Fang in Tel Aviv. Thank you. Thanks, A. And that's up first for this Thursday, July 31st. I'm Steve Inskey. And I'm Amy Martinez. There is a remarkably easy way to stay connected to news and podcasts from the NPR network. It's the NPR app. You can hear community coverage from your local station stories from all over the world and also podcast suggestions based on what you

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