Washington, DC

1. Trump’s Blanche threat
2. Mortgage rates rise
3. Democratic doubters in Michigan
4. Russia sanctions push
5. Saudis lead coalition

Microsoft ▲ 16% after its strong earnings report.

Trump threatens to temporarily pull Blanche nomination

President Donald Trump said today he might pull Todd Blanche’s stalled nomination for attorney general and reup it once two Republican holdouts are gone, taking a dig at Sens. John Cornyn of Texas and Thom Tillis of North Carolina, who lost primary races this year after Trump didn’t endorse them. “I have no objection to temporarily withdrawing Todd’s name, if they do not do the right thing, and putting him back after Cornyn and Tillis are out of office,” Trump posted today on Truth Social. Blanche’s nomination lost momentum this week after the Justice Department couldn’t reach an agreement that satisfied Cornyn and Tillis, who wanted written assurances that a deal to give the president and his family members lifetime immunity from IRS audits is dead. Trump plans to keep Blanche in his role as acting attorney general, according to a White House official.

Borrowing costs rise as inflation looms

Borrowing costs are going up — a blow to the long-stalled housing market and a sign that the threat of inflation looms large. Investors began dumping long-hold bonds yesterday after Federal Reserve Chair Kevin Warsh’s remarks that suggested rate hikes are on the horizon. That drove up 30-year Treasury yields to a 19-year high, after 10-year Treasury bonds — which are closely tied to mortgage rates — hit an 18-month high last week. Mortgage rates followed today, hitting an average of 6.66%, the highest in a year, according to new data from Freddie Mac. The Fed’s preferred inflation rate fell in June, though at 3.7%, it was still well above the Fed’s target of 2%, other data released today showed. The drop was driven by a temporary truce between the US and Iran, and the trend is expected to reverse on renewed fighting in the Gulf.

Never-El-Sayed moment in Michigan?

A new independent poll shows progressive candidate Abdul El-Sayed leading by double digits in Michigan’s heated Democratic Senate primary, as Democrats stare down the possibility that the party won’t unify around him in the general, Semafor’s Nicholas Wu reports. “I will not stand beside someone who has allowed distinctly anti-American sentiment to enter our public dialogue,” said Rep. Hillary Scholten, D-Mich., at a local hot dog restaurant yesterday afternoon. Scholten has criticized El-Sayed for campaigning with far-left streamer Hasan Piker. Her comments set off a wave of fury on the left, who pointed to promises by El-Sayed and other progressives to support rival Rep. Haley Stevens if she wins. “We’re looking forward to continuing to build this movement to defeat Trump and Mike Rogers in the fall,” said El-Sayed spokesperson Roxie Richner.

— Nicholas Wu

Ukraine ambassador: Sanctions bill would deal ‘devastating’ blow to Russia

A bill penalizing buyers of Russian oil and gas currently moving through Congress would have a “devastating” impact on Moscow and strengthen Ukraine’s hand in ceasefire talks ahead of winter, Olga Stefanishyna, Ukraine’s ambassador to the US, told reporters today. Stefanishyna called on Congress to approve the sanctions package, which the Senate advanced earlier this week, in the next two to three months, during which time she said Ukraine will take advantage of Russia’s shortage of missile interceptors. The bill has strong bipartisan support and backing from Trump but faces uncertainty in the House, where Democrats have raised concerns about its expansion of the president’s tariff authority. Stefanishyna said there was no “hard” commitment from the US to provide Ukraine with more Patriot interceptors during Ukrainian President Volodymyr Zelenskyy’s visit, but signaled there are ongoing discussions about Ukraine’s immediate needs.

— Morgan Chalfant

Gulf countries form military coalition to defend shipping

Saudi Arabia announced the launch of a new military coalition of 14 countries to protect shipping in the Gulf, as the US-Iran conflict spreads and attacks by Houthis in the Red Sea escalate. For months, Riyadh resisted being dragged into the conflict, but the Saudis are now clashing with forces on three sides — the regime in Iran, the Houthis in Yemen, and Iran-aligned militants in Iraq, which they struck alongside the US this week. Iran-aligned groups appear to be working in greater coordination, as the Houthis managed to attack Saudi Arabia from inside Iraq, according to Reuters. Egypt is one of the 14 countries joining the Saudi maritime coalition, after finding itself drawn into the conflict this week, as well, when drones struck a port and set fire to two ships.

Affirm founder and CEO Max Levchin wants his financial technology company to act like your “smarter older sister”: giving customers good advice and sometimes telling them, “This is more than you can afford.”

It’s a deliberately different approach to financial services, one that rejects business models built around customers making bad decisions. And Levchin believes it will become more of an advantage as AI makes it easier to spot hidden costs.

In the latest episode of The CEO Signal, presented by PwC, Levchin tells Penny Pritzker and Andrew Edgecliffe-Johnson why immigrant engineers see the CEO’s role differently, and why he studies sci-fi to understand AI — and prevent its most dystopian future from happening.

White House

• President Trump announced an effort to expedite trucking licenses for US military veterans, to replace immigrant drivers.
• US passport offices in states across the country will start offering special Trump-themed passport books.

Congress

• The Senate’s health committee voted to advance President Trump’s nominees Erica Schwartz to head the Centers for Disease Control and Prevention and Sean Kaufman to lead the Administration for Strategic Preparedness and Response, as well as Keith Sonderling for labor secretary.
• Another law enforcement organization put its weight behind the Senate’s cryptocurrency bill Thursday amid a tussle over illicit finance that’s bogged down efforts to bring the measure to the floor this summer, according to a letter from Majority Cities Chiefs Association shared with Semafor’s Eleanor Mueller.

Campaigns

• Mandela Barnes, former lieutenant governor of Wisconsin, dropped out of the state’s Democratic gubernatorial primary.
• Elon Musk has authorized his super PAC to spend $100 million to $120 million on a new field program to help elect Republicans in the midterm elections in at least eight states. — NYT

Technology

• The National Highway Traffic Safety Administration approved Zoox, Amazon’s self-driving car startup, to charge passengers for rides in its steering-wheel-free vehicles. — Reuters

National Security

• US officials believe Iran was behind a cyberattack on water facilities in Minnesota. — NYT
• The Pentagon is making bets on startups to replace the dwindling US stockpile. — WaPo
• Senate Democrats plan to open an investigation into an Iranian attack that killed six US service members in Kuwait earlier this year. — WaPo

Economy

• Antwerp World Diamond Center received a reprieve from new tariffs a few weeks after gifting President Trump a ring featuring 321 diamonds.

Foreign Policy

• Treasury Secretary Scott Bessent said he and Trade Representative Jamieson Greer spoke to He Lifeng, one of Xi Jinping’s top deputies, to emphasize that the US expects China to “fully meet its commitments on rare earths and US agricultural products.”

Immigration

• The Trump administration is considering charging foreign students $100,000 if they wish to work in the US after graduation. — WSJ

Courts

• A judge seemed skeptical today of the Trump administration’s decision to ban federal agencies from using Anthropic’s technology. — Bloomberg
• The secretive Alien Terrorist Removal Court hears its first case today.

Media

• A new media ecosystem is reshaping Democratic politics. — AP
• Health secretary Robert F. Kennedy Jr. has a new online cooking show promoting MAHA-friendly meals.

— First lady Melania Trump, announcing the reunion of five Russian and Ukrainian children with their families.