Up First from NPR - Hamas Releases Hostages, Eight Candidates Vie for Speaker, Bond Sell-Off Sparks Fear

Episode Date: October 24, 2023

As Israeli bombardment continues across Gaza, diplomatic efforts to facilitate the release of more hostages continue after two Israeli women were freed by Hamas. Today, House Republicans will vote between eight candidates hoping to unite a bitterly divided party. And, a sell-off of US Treasury bonds is sparking fears of higher inflation.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 Tara Neill, Kelsey Snell, Rafael Nam and Mohamad ElBardicy. It was produced by Mansee Khurana, David West and Lilly Quiroz. We get engineering support from Stacey Abbott. And our technical director is Zac Coleman.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hey, it's Abe Martinez asking you to take a short survey for us. We want to know how this podcast can help you. So go to npr.org slash fall survey. Tell us what you think about it first and thanks a lot. Hamas releases two elderly Israeli hostages on humanitarian grounds. Meanwhile, Israeli airstrikes intensify in southern Gaza. That's where civilians were asked to flee. There is a sound of bombs everywhere.

Is a ground invasion imminent? I'm Michelle Martin. That's A. Martinez. And this is Up First from NPR News. Republicans are at it again today. They'll choose between eight candidates vying to become Speaker of the House. I feel optimistic we'll have a Speaker. Can the party come together in time to avoid a government shutdown? And a sell-off of U.S. Treasury bonds is sparking fears of higher inflation.

It has been a tremendously bad sell-off. It has been historically one of the worst sell-offs we've ever seen. Stay with us. We've got all the news you need to start your day. Now Our Change will honour 100 years of the Royal Canadian Air Force and their dedicated service to communities at home and abroad. From the skies to Our Change, this $2 commemorative circulation coin marks their storied past and promising future. Find the limited edition Royal Canadian Air Force $2 coin today. I'm A. Martinez in Los Angeles, California. Some much-needed good news this morning out of the

Israel-Gaza conflict. Two elderly women abducted by the militant group Hamas in the cross-border attack on Israel nearly two weeks ago were released. They are 85-year-old Yocheved Lifshitz and 79-year-old Narit Cooper. Jackie Northam is in Jerusalem. Jackie, tell us what you know about the hostages that were released. Well, the release was brokered by Egypt and Qatar after, you know, long negotiations. And one of the women, the 85-year-old Yocheved Lifshitz, described her ordeal afterwards at a Tel Aviv hospital. She spoke through a translator. It was very, very difficult and unpleasant. In the memory, I see the images. But Lifshitz said she went through what she called a nightmare

that she couldn't have imagined. After Hamas militants grabbed her during the attack on the kibbutz, they put her on a motorcycle and took off over fields. Her legs were tied and she said she was hit with a wooden pole. Lifshitz says they ended up in one of these Hamas underground tunnels and they walked for two or three hours through this labyrinth of tunnels before they met up with other hostages. And considering the circumstances,

Lipschitz was almost charitable about her captors. She said they ate meals together, they didn't talk about politics, they were visited every day by a doctor and brought medications if needed until they were released. And interestingly, there's a video of the release of the two women. And in it, Lipschitz takes the hand of a Hamas militant and says, shalom, peace. But, you know, these are two people who have been released. We can't forget that there are about 220 other hostages, Israelis,

but other foreign nationals, including 10 Americans that are still being held. And the Biden administration says it's working around the clock to get Americans out of Gaza. Wow. What a story from her. I'm glad to know that she got out okay, as okay as possible. Three weeks into this conflict now, and from the very beginning, Israel has said that they want to root out, uproot Hamas from Gaza. Hasn't happened yet. Probably can't happen unless they go walk in. Any sign that that might happen soon? Well, Israel's military seems to be poised to go in. You know, it's got troops and tanks along the border with Gaza, but nothing has happened. Certainly the hostage situation complicates things. You know, it takes time

to negotiate the release of these people. Israel also wants time to take out as much of Hamas's underground tunnel system as possible. And to that end, Israel has been pounding Gaza with airstrikes, 400 airstrikes just overnight. About 5,800 Palestinian civilians have been killed so far, and many of them children, and more than a million people displaced. But you know, the other factor delaying an incursion are splits within the government about when to go in. Prime Minister Benjamin Netanyahu has been Israel's longest-serving leader, but he's never initiated an act of war. But he has hard-right members in his government who are pushing him now to go in.

I think the other final factor is the U.S. and other allies are urging Israel to go slow. And why are they urging them to go slow? What are their concerns? Well, the concern is that Israel doesn't have a well-thought-out strategy. You know, this is going to involve urban warfare. Hamas has these underground network of tunnels, which is where they operate.

From the U.S. Defense Secretary Lloyd Austin has been in regular contact with his counterparts here, sharing with them the experiences and the challenge that the U.S. went through conducting urban warfare in Iraq. The thing is, they want them to really think hard before going in what the end game is in Gaza. That's NPR's Jackie Northam in Jerusalem. Jackie, thank you. Thank you. The U.S. House of Representatives has now been without a speaker for 21 days, leaving Congress virtually paralyzed. Republicans will try again to elect their nominee for speaker today. There are now eight candidates in the race, and each of them made their pitch behind closed doors last night to their fellow Republicans. Some, like Don Bacon

of Nebraska, are hoping that this time they can come together. I feel optimistic we'll have a speaker. NPR political correspondent Susan Davis joins us now. So he's optimistic, optimistic. Any frontrunner that could bring them all together? Well, the closest person to that in this race is probably Tom Emmer. He's a Republican from Minnesota, and he's currently the majority whip. That's the number three elected leadership position whose job it is to basically know where the votes are in the conference. Prior to that job, he ran the House Republicans national campaign operation, so he has the most natural position of strength based off of both his resume and certainly his fundraising record. But establishment Republicans

have struggled in this fight. You know, Kevin McCarthy was removed from the job. Majority leader Steve Scalise dropped out before his nomination could even go to the floor. And Emmer isn't considered an ally of former President Trump the way failed nominee Jim Jordan was considered an ally. So he's a frontrunner with a lot of caveats. Other members I would note in this race are Mike Johnson of Louisiana. He's a lower tier leadership position, and he has relationships with the party's base and a lot of party activists. Georgia's Austin Scott is making a second run for Speaker after initially losing the nomination to Jim Jordan. And Florida's Byron Donalds, he's a junior lawmaker, certainly for the position of speaker.

But he's part of the Freedom Caucus. He's popular there. And if he were to win the nomination or win on the floor, he would be the first black speaker of the House. The rest of the candidates in this race are not particularly well known, but with no very clear front runner, obviously upsets are always a possibility in this race. So tell us how this internal vote process works. So each candidate will have a fellow lawmaker give a nominating speech, and as many as two additional lawmakers can speak on their behalf. And then they start voting behind closed doors. Republican conference rules say the candidate with the least votes will drop off the subsequent ballot. And they just keep doing this until someone wins a majority of the conference.

Right now, there are 221 House Republicans if everyone shows up to vote. So half of that plus one. If no one drops out along the way, this could take eight or nine rounds of voting. So it could be a very long day. But it has been three weeks of very long days for House Republicans. They could also hold other votes today. They've used these secret ballots to get temperature checks on whether lawmakers would vote for a nominee on the floor, even if a nominee should drop out of the race, which was ultimately what the conference voted about Jim Jordan just last week, which has led them here.

So as we know, being a nominee is one thing. Winning over a majority of the House in a floor vote is quite another. How confident are Republicans that they can wrap this thing up? It's certainly not a sure bet. You know, if Republicans can pick their nominee today, they could go to the floor pretty quickly and see where the votes stand. They could go as early as today, but more likely tomorrow. There is this school of thought, and it might be overly optimistic, that enough Republicans are so exhausted by this public drama, they're just ready to unite behind anyone and get on with governing. But the party's divided in pretty critical ways over what exactly their governing agenda should be right now. The immediate work facing the Republican majority is legislation that almost certainly will need Democratic support to keep the government open, to pass spending bills and to pass foreign aid to Israel and Ukraine. And it's really hard to win what is essentially a party purity challenge

and yet have the very first test of that person be figuring out how many Democrats the speaker will need to get its work done. And Sue, what if Republicans are not able to elect a speaker again this week? I mean, how much urgency is there for them to figure it out? Well, Congress doesn't always act until there's a hard deadline. And frankly, the next hard deadline is November 17th. That's when the current stopgap spending bill runs out and the government would shut down. Now, House Republicans obviously want to get this done more quickly than that because they realize this is politically very bad for the party. But it's unclear what's possible at this point.

Senate Minority Leader Mitch McConnell told Face the Nation over the weekend he hopes the speaker drama is resolved soon and said it's clearly a problem when Congress can't function. NPR political correspondent Susan Davis. Susan, thanks. You're welcome. The bond market may not get as much attention as the stock market, but a steep sell-off is underway. Governments issue bonds to raise money for public services and projects, and the United States needs to borrow extensively for a variety of reasons. Bond yields have risen recently, and that threatens to have a big impact on the economy and what people pay to borrow money. NPR's David Gura joins us now to explain what's driving yields higher and what it means for you and me. David, so why does the bond market matter?

Well, you know, so many of us have bonds in our retirement portfolios. So if bond prices go down, our accounts are going to take a hit. No one likes to see that. But beyond that, the interest we pay on so much of what we buy is tied to yields on longer-term treasuries, on these U.S. government bonds that mature in two years or ten years. So higher yields affect credit cards. They affect car loans and home mortgages. They affect businesses that borrow money to grow.

Of course, they affect the government, which issues this debt. It also has to pay higher rates, which means it costs us taxpayers more money and adds to the deficit. All right. So what's behind the bond market sell-off? Well, first and foremost, it's due to the resilience of the U.S. economy. And as I say that, I realize you may be thinking, hey, that doesn't sound like such a bad thing. But you have to keep in mind we have been through this stretch of high inflation, and the Fed Reserve has been hiking interest rates aggressively to lower that rate of inflation. It's been trying to slow down the U.S. economy, but when you look at the economic data recently, A, there are signs policymakers are not making enough progress. Katie Nixon is the chief investment officer at Northern Trust Wealth Management. My goodness, we've had continuous and surprising resilience in the labor market, surprising resilience in consumer spending.

So I think growth has surprised on the upside, too. Now, Wall Street doesn't expect the Fed is going to raise interest rates again at its meeting next week. But investors do expect the Fed will keep interest rates higher for longer. This is a phrase I hear all the time now covering Wall Street. And what it means is the Fed is not going to feel comfortable enough to reduce interest rates until there are more signs the economy is cooling A and inflation is coming down closer to its target of about 2%. So, I mean, how bad are things in the bond market? You know, it's been pretty bad. And this sell-off comes after a pretty miserable year. 2022 is one of the worst years on record for bonds. And right now, things are not looking much better. We

just hit this big milestone. The yield on the 10-year Treasury note, which is a key benchmark, just topped 5%, which is something we haven't seen since the summer of 2007, back when George W. Bush was the president and Ben Bernanke was the Fed chair. With bonds, when yields go up, as they have, prices go down. And here's how John Canavan describes what we've seen lately. He's the lead analyst at Oxford Economics. It has been a tremendously bad sell-off. It has been historically one of the worst sell-offs we've ever seen. Now, other factors are behind it, and a big one is growing concern about the government's finances. The U.S. just reported its budget deficit ballooned over the past year, and there's concern as Washington continues to spend a lot of money at a time when tax revenues are down. So this doesn't sound great, David. I mean,

what's the outlook for the bond market then? Yeah, things are looking pretty rough, and there's no indication that's going to change anytime soon. But, you know, U.S. government bonds are seen as some of the least risky investments in the world, and that is especially true when there is global turmoil. Right now, of course, there are two big conflicts, Russia's invasion of Ukraine and the war between Israel and Hamas. We could see investors flock to U.S. treasuries once again. And if that does happen, yields would fall and prices would go up. NPR's David Gurra. David, thanks for explaining this. Thank you.

And that's a first for Tuesday, October 24th. I'm E. Martinez. And I'm Michelle Martin. Today's episode of Up First was edited by Tara Neal, Kelsey Snell, Rafael Nam, and Mohamed El-Bardisi. It was produced by Mansi Karana, David West, and Lily Quiroz. We get engineering support from Stacey Abbott, and our technical director is Zach Coleman. Start your day here with us tomorrow. And don't forget to take our short survey.

We want to know how this podcast can be made better for you. Find it at npr.org slash fall survey. Thank you.