Morning news brief
LEILA FADEL, HOST:
This morning, House Republicans are preparing tough questions for Attorney General Merrick Garland.
A MARTÍNEZ, HOST:
They want to press him on how the Justice Department handled the investigation into Hunter Biden, the president's son, as well as the indictments of former President Donald Trump.
FADEL: NPR's Jaclyn Diaz will be watching this hearing before the House Judiciary Committee for us, and she's with us now. Good morning, Jaclyn.
JACLYN DIAZ, BYLINE: Good morning.
FADEL: So Merrick Garland is testifying at a pretty unprecedented time with these indictments. What are you expecting?
DIAZ: So it's pretty standard for the head of the DOJ to come before Congress as part of the committee's oversight powers. But Attorney General Garland is going to be in the hot seat. Garland has made several efforts to portray his office as independent of the president and that it makes decisions on cases with no interference from Biden or anyone else.
Still, Republicans have long criticized Garland and the DOJ, claiming there's been unequal treatment since Trump, their de facto party leader, has been indicted twice on 44 federal charges, and Hunter Biden was recently indicted on three gun charges. Now, these are very different cases, but they are behind the ramped-up attacks on Garland and his agency from Republicans.
Meanwhile, Democrats say Republicans aren't really looking for facts or truth - just a political advantage. And that's the context in which Garland testifies today.
FADEL: So what do you expect the Republican-led House committee to focus on?
DIAZ: Well, the Republicans have made it clear they want to focus on Hunter Biden. They've spent months in the House investigating Hunter Biden in an attempt to link wrongdoing to his father, President Biden. But so far, there's been no concrete evidence. In an interview with the Washington Examiner this week, Judiciary Committee chairman Jim Jordan made it clear that a major focus for the committee this morning will be on Hunter Biden and special counsels Jack Smith and David Weiss. Smith, of course, is the head prosecutor in the federal Trump criminal cases. Weiss is the special counsel in charge of investigating the president's son.
Hunter Biden has been under federal investigation in Delaware for years now. David Weiss, who Trump appointed, has investigated him since 2019. And in August, Weiss was made special counsel by Garland. And earlier this month, Biden was indicted on felony gun charges.
But in the middle of all of this, two IRS agents came forward and accused the DOJ of giving Biden's son preferential treatment and slow-walking the investigation into him. Jordan has said that Weiss himself will be brought in front of the committee to answer some of these questions sometime later this fall.
FADEL: And you said special counsel Jack Smith, the man who indicted Trump, will be a topic of interest as well.
DIAZ: Many Republican lawmakers have long defended former President Trump. They've portrayed him as a victim of politics following his indictments this summer for attempting to subvert democracy in one case and knowingly withholding classified documents in another. And the GOP, along with Trump himself, continue to claim that Jack Smith is using these criminal indictments against Trump as a way to attack the former president and to interfere in the 2024 election.
FADEL: And really quickly, what do we expect Garland to say?
DIAZ: Garland is expected to defend the Justice Department. He's not going to directly comment on those cases regarding Trump or Hunter Biden. The agency makes a habit of not commenting on open investigations. But he will defend the work of his agency amid all of this public scrutiny and warn against attacks against public servants like Weiss and Smith.
FADEL: NPR's Jaclyn Diaz, thanks.
DIAZ: Thank you.
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FADEL: Federal Reserve chairman Jerome Powell says the central bank is trying to strike a delicate balance, raising interest rates high enough to bring down inflation but not so high as to torpedo the economy.
MARTÍNEZ: Yeah. Markets are betting that balancing act will prompt Powell and his colleagues to hold interest rates steady when they meet today. But investors will be on the lookout for any signals about where interest rates might go in the future.
FADEL: NPR's Scott Horsley joins us now to discuss this. Hi, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: Good morning. So rates have already gone up a lot in the last year and a half and inflation is down. Do Fed officials feel like their work is done?
HORSLEY: Not yet. Inflation has come down a lot since last summer, when it topped out at just over 9%, but it's still north of 2%, which is the Fed's target. So the question Powell and his colleagues are wrestling with is, are interest rates high enough now that inflation will continue to come down on its own, or do they need to push rates even higher and possibly raise the risk of recession? For the moment, the Fed is expected to take a breather and leave rates where they are. But Michael Pearce, who's with Oxford Economics, thinks they'll pair that with a message that rates could go higher in November or December.
MICHAEL PEARCE: It's a no-brainer for the Fed to remain sounding hawkish this meeting. I mean, they want to keep that optionality of additional hikes if they need to.
HORSLEY: Of course, higher interest rates make it more expensive to borrow money for a house or a car or just to carry a balance on your credit card. Higher mortgage rates have been a drag on the housing market this year. But so far, the overall economy has been handling higher borrowing costs pretty well.
FADEL: August inflation a little higher than expected. How does that affect the Fed's decision-making?
HORSLEY: Yeah. The last cost of living report showed annual inflation in August was 3.7%. That's up from 3.2% in July. Most of the increase was the result of rising gas prices. And we've seen those oil production cuts by Russia and Saudi Arabia push the price of crude oil up to more than $90 a barrel. Steven Ricchiuto, who's the chief U.S. economist at Mizuho Securities, says that's probably not going to sway the Fed on its own, but if higher transportation costs start to push up other prices, that could be a different story.
STEVEN RICCHIUTO: I think they'll look past a political situation that's moving energy prices, but pass-through would worry them.
HORSLEY: Last month, for example, we did see airfares go up as a result of rising jet fuel prices. Most of the other inflation forces the Fed's been watching, though - things like rent and service prices - are generally moving in the right direction, even if they are taking longer to come down than most people would like.
FADEL: So does that mean we're going to be living with higher interest rates for a while?
HORSLEY: Possibly. Back in June, a lot of Fed policymakers thought they'd be able to start cutting interest rates next year. On average, they were predicting that rates would drop maybe by a full percentage point in 2024. We will get an updated round of Fed forecasts today, and Michael Pearce thinks it may show policymakers in more of a holding pattern.
PEARCE: It feels like there's a higher bar for raising rates, but also a higher bar for cutting rates as well. It just feels like the committee setting themselves up for a prolonged pause and just waiting to see where the next few months of data will take us.
HORSLEY: Powell said last month that the Fed is navigating by stars under cloudy skies, and you can now add some additional fog to that picture. We've got the UAW strike, the looming threat of a government shutdown, the resumption of student loan payments. So there's a lot of uncertainty, and you can expect the Fed to proceed with caution.
FADEL: NPR's Scott Horsley. Thanks, Scott.
HORSLEY: You're welcome.
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FADEL: Autoworkers and the Big Three Detroit automakers seem to be stuck at an impasse six days into a historic strike.
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UNIDENTIFIED AUTOWORKERS: (Chanting) No more tiers. No more tiers. No more tiers.
MARTÍNEZ: Ford, GM and Chrysler parent company Stellantis are negotiating with the United Auto Workers union, but there's no indication of an imminent deal. And now the UAW is threatening to expand its strike unless there's progress in the talks. So what does this mean if you're thinking about buying a new car?
FADEL: NPR's Camila Domonoske joins us now to talk about this. Hi. Good morning.
CAMILA DOMONOSKE, BYLINE: Good morning, Leila.
FADEL: So you talk to car shoppers all the time. Is this something people are worried about?
DOMONOSKE: It's on people's minds, for sure. Last week I was reporting on these strikes, but I also swung by the Detroit Auto Show and spoke with some people who were there, you know, thinking about buying a new car soon. That includes Chris Deneau. And he summed up his view on the strikes like this.
CHRIS DENEAU: Is it solvable? Absolutely. When will it be solved? I don't know. Am I too worried? Not really.
DOMONOSKE: On the other hand, there was also Sameer Joshi.
SAMEER JOSHI: It's going to drive down the supply of cars. So again, the dealerships are going to, you know, gouge people for more money. They'll sell them over MSRP.
JOSHI: Again, yeah.
DOMONOSKE: Over MSRP - he means sell them over sticker price, like they were doing not too long ago. Both those men, for the record, are pretty much right.
FADEL: OK. How are they both right? One's worried, one isn't.
DOMONOSKE: Yeah. Well, let's start with the case for not worrying. And to be clear, I'm talking about as a car shopper here, right? The strike has other economic impacts that we're not talking about right now.
It's just a numbers game, right? Inventories - that's the vehicles that have been built and are ready to be sold - they're at their highest level in two years. And the number of plants that are on strike right now, it's just not huge. The unionized automakers decades ago - they were like 90% of the car market, right? Today, it's a different picture. They're less than 40%, and most of their plants are still running. The union strike strategy here has been to start small, pick a few plants to strike and then threaten to expand from there.
So right now, in terms of vehicles that are directly affected by the strike, you're looking at the Jeep Wrangler and Gladiator, GMC Canyon, the Chevy Colorado, and you've got the Ford Bronco and Ranger. And that's it, right? Now, it does depend on the vehicle whether that's going to have an impact on supply in the near term. Right now, there are a lot of Jeep Wranglers on lots. There are not a lot of Broncos out there. I feel like there's probably a cowboy joke in there, if I could make it work. But in general, this is not about to cause a sudden shortage of cars across America.
FADEL: OK, so that's the case for not worrying. What's the case for worrying?
DOMONOSKE: So it's about looking ahead, right? The union has threatened to put more plants on strike this Friday. More plants could shut down because of ripple effects. And if it lasts a really long time, we might see sales go away - not a lot of discounts this holiday season. You know, this could affect used cars, too, maybe. It will be slow if that happens. But car prices are already so high, some people are worried.
FADEL: NPR's Camila Domonoske, who will be back with her cowboy joke, maybe. Thanks so much.
DOMONOSKE: Thanks, Leila. Transcript provided by NPR, Copyright NPR.
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