Washington, DC

1. Iran strikes resume
2. Warsh’s tightrope walk
3. DNC chair may survive
4. Montana Senate warning
5. Shifting AI views
6. Sudan in defense bill
7. Big Oil’s windfalls

PDB: Senate advances Russia sanctions bill

Trump, Duffy make announcement … Altman in DC … Fauci testifies before Senate

Iran attack raises pressure on Trump

President Donald Trump yet again faces a difficult choice of whether to escalate the unpopular war on Iran after Tehran launched a “surprise” ballistic missile attack on US forces in Jordan. Hours later, the US and Saudi Arabia launched joint attacks on Iranian-backed militias in southern Iraq that had targeted Saudi oil facilities with drones, the first time Riyadh has acknowledged direct involvement in the war. Trump had alluded to “good talks” with Iran just yesterday, but the renewed strikes show just how far the conflict is from resolution. Iran also rejected an Omani proposal to share transit routes through the Strait of Hormuz; the waterway is Tehran’s most crucial leverage, and it wants full control of both inbound and outbound routes. Senators will vote on another Democrat-sponsored war powers resolution this afternoon.

Warsh’s new test: A murky rate choice

Federal Reserve Chair Kevin Warsh’s tightrope walk atop the central bank will get even dicier this afternoon. Investors are split on whether policymakers will decide to raise interest rates as inflation rises again following a brief intermission in the Iran war — or, given a benign inflation report last month, if they’ll continue to hold them steady. If policymakers hike, Warsh will have to provide a window into their outlook in order to stop markets from reacting in anticipation of a series of raises that may never come. If policymakers don’t hike, Warsh will need to temper investors’ fears that the Fed might never act on his hawkish posturing. Either way, he’ll be forced to defend the task forces he’s tapped to overhaul the central bank now that he’s finalized their membership — and internal concerns have been made public.

— Eleanor Mueller

Why Democrats aren’t ousting Ken Martin

Democrats don’t like the bad headlines or the fundraising coming out of the DNC and its embattled chair, Ken Martin. But they want no part of trying to oust Martin right before a midterm election that seems to be trending their way, Semafor’s Burgess Everett, Nicholas Wu, and David Weigel report. “One hundred days from an election? I don’t think that’s the solution right now,” said Sen. Mark Kelly, D-Ariz., one of the party’s best fundraisers and a vice chair at the Democratic Senatorial Campaign Committee. “We have a real opportunity here to win a lot of races across the country,” he added. “Fundraising challenges can be addressed.” Democrats can win House as well as Senate and gubernatorial races without a strong DNC, and there’s no obvious candidate to replace Martin. Still, don’t be surprised if Martin’s future is a hot topic after the election.

Republican in Montana Senate race gets boost

A one-on-one matchup between Republican Kurt Alme and independent Seth Bodnar in Montana’s Senate race is looking less likely. The Montana Secretary of State’s office tells Semafor that there’s no wiggle room if Democratic Senate candidate Alani Bankhead drops out of the race in the next two weeks. “The Secretary took an oath to uphold the law, and Montana law plainly states that if a party’s candidate withdraws, that political party shall appoint a replacement. That’s the law, not a suggestion. We’re not interested in political games,” said a spokesperson for Montana Secretary of State Christi Jacobsen, a Republican. Some Montanans argue there are still ways around it. It’s not a Montana-specific issue: In Nebraska, there’s a hearing today on whether the Democrat in that race must be replaced on the ballot, which would hurt independent Dan Osborn’s chances against Sen. Pete Ricketts, R-Neb.

— Burgess Everett

Americans see AI more negatively

After two years of improving attitudes, Americans are turning more negative toward artificial intelligence as the technology finds its way into businesses and classrooms. Nearly four in 10 US adults believe AI does more harm than good, according to polling from Bentley University and Gallup, up from 31% last year. The negative views are particularly acute among younger Americans; nearly half of US adults aged 18 to 29 believe AI does more harm than good. Americans are also downbeat on AI’s impact on the economy. Nearly eight in 10 believe AI will reduce the overall number of US jobs over the next decade, while only 6% expect it to increase jobs. And only 27% say they trust businesses to use AI responsibly. The data reflects a shifting sentiment that has been evident in other surveys; Americans also widely disapprove of data centers, critical to powering AI.

Sudan sanctions may ride on defense bill

Legislation paving the way for further sanctions on parties in Sudan’s civil war has a greater chance of becoming law this year after lawmakers added it to the Senate’s version of a must-pass defense bill. Sen. Jim Risch, R-Idaho, who leads the Foreign Relations Committee, successfully filed the PEACE in Sudan Act as an amendment to the annual defense policy bill moving through the chamber. The bill would enable sanctions on foreign actors fueling the war, extend the authorization for a US special envoy for Sudan, mandate the administration assess whether any armed actor in Sudan can be designated as a terrorist group, and require a State Department strategy for ending the conflict. “I am engaged with my Senate and House colleagues on a path forward for the PEACE in Sudan Act and am hopeful it will be enacted,” Risch said in a statement.

— Adrian Elimian and Lauren Morganbesser

Big Oil braces for a profit backlash

Big Oil will be back in the hot seat this week, as companies post what are expected to be bumper second-quarter profits driven by the Iran war. What’s good for consumers is bad for oil investors: Share prices for Chevron and ExxonMobil ticked down over the past couple of days alongside a modest fall in oil prices. Still, both companies’ stock is up nearly 40% in the past year. When Exxon reported a dip in first-quarter profits, CEO Darren Woods explained that disruption to the company’s Middle East operations and hedging contracts counteract the apparent benefits of higher crude prices. But once energy companies actually collect payment for delivered barrels, the real profits roll in. That’s what we should expect to see later this week: Oil producers are on track to pocket a half-trillion-dollar windfall this year.

Blindspot: Backing away from lawsuits

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: The Justice Department reached a seven-figure settlement with an anti-abortion activist who was charged under the Biden administration over a 2021 protest at an abortion clinic.

What the Right isn’t reading: Federal prosecutors in California moved to dismiss a case against a leader of a local labor union arrested during a protest of the Trump administration’s immigration policies.

Beltway Newsletters

Punchbowl News: Democrats aren’t too worried about the prospect of an extended expiration of key surveillance authorities under FISA Section 702 — a sign Jay Clayton’s confirmation won’t unlock a deal to renew the powers. “Right now, we’re not in a flashing red lights kind of situation,” said Intelligence Committee member Sen. Martin Heinrich, D-N.M.

Playbook: Bill Pulte is trying to stay in the role of director of national intelligence longer despite Clayton’s confirmation, arguing he is “doing things nobody else will do, and that’s why he needs to stay in the job longer,” a White House official said. Trump aides want to quickly swear Clayton in for the job.

Axios: Ukrainian President Volodymyr Zelenskyy said he asked President Trump during their meeting yesterday for an emergency “winter package” of Patriot interceptors.

White House

• President Trump has parted ways with his longtime teleprompter operator, who allegedly used his advance knowledge of the president’s speeches to place prediction market bets. — Politico

Congress

• The Senate voted 86-12 to advance the bipartisan Russia sanctions bill, with Ukrainian President Volodymyr Zelenskyy looking on.
• The Senate confirmed Jay Clayton to be director of national intelligence in a 51-47 party-line vote.

Outside the Beltway

• Ruby Rippey, the staffer whose affair with then-San Francisco Mayor Gavin Newsom nearly derailed his career, recounts to Vanity Fair her “intoxication” with him and her struggles with alcoholism.
• In San Francisco, Rep. Kevin Mullin, D-Calif., announced a measure that would impose specific safety regulations on autonomous driving companies like Waymo.

Campaigns

• A scammer stole $29,000 from the DNC. — NOTUS