The briefing for Tuesday, January 13.

Defense Secretary Pete Hegseth announced Monday that Elon Musk's Grok AI chatbot will be integrated into Pentagon classified and unclassified networks later this month, joining Google's AI systems. The announcement comes days after Grok drew global outcry for generating sexually explicit deepfake images without consent, prompting Malaysia and Indonesia to block the platform and the UK to launch an investigation.

Hegseth said he would make all appropriate military data, including intelligence databases, available for AI exploitation. The move represents a sharp departure from Biden-era safeguards that prohibited AI applications violating civil rights or automating nuclear weapons deployment. It remains unclear whether those prohibitions remain in place under the current administration. Hegseth defended the decision by saying Pentagon AI systems will operate without ideological constraints and won't be woke.

The aggressive AI adoption push raises questions about data security and responsible use of developing technology. Musk pitched Grok as an alternative to what he called woke AI from competitors, though the platform previously drew criticism for appearing to make antisemitic comments praising Adolf Hitler. The Pentagon did not immediately respond to questions about Grok's recent controversies or how they would address concerns about the technology's reliability and safeguards.

Three former Federal Reserve chairs issued a rare joint statement Monday condemning a Justice Department criminal investigation into current Fed Chair Jerome Powell, calling it an attack on central bank independence reminiscent of weak emerging markets. Janet Yellen, Ben Bernanke, and Alan Greenspan, along with 10 other former officials appointed by both Democratic and Republican presidents, rallied behind Powell after he disclosed Sunday that the DOJ had served subpoenas and threatened indictment over testimony about Federal Reserve building renovations.

Powell called the investigation unprecedented and said he believed it stemmed from President Trump's anger over the Fed not cutting interest rates more aggressively. The central bank lowered rates three times in late 2025 to a range of 3.50% to 3.75%, but Trump has repeatedly demanded steeper cuts to reduce government borrowing costs. Yellen told CNBC the odds that Powell would have lied are zero and suggested the probe aims to remove him from his position, which ends in May.

The investigation has drawn concern from some Republican lawmakers who called it an unnecessary distraction that could undermine sound monetary policy decisions. Financial markets showed modest concern, with the dollar slipping against other currencies and gold prices rising. The controversy comes as Trump prepares to name Powell's replacement in the coming weeks, though the investigation and subsequent backlash could complicate the confirmation process for any nominee.

President Trump announced Monday a 25% tariff on goods from any country doing business with Iran, effective immediately, as anti-government protests in the Islamic Republic enter their third week. The move targets Iran's largest trading partners including China, Iraq, the United Arab Emirates, Turkey, and India, though the White House provided no details on what constitutes doing business with Iran or which imports would be most affected.

The tariff announcement follows Trump's threats of military intervention if Tehran kills protesters, with the White House saying air strikes remain on the table. The death toll from the crackdown has reached at least 646 according to activists, though sources tell the BBC the actual number is likely much higher. More than 10,600 people have reportedly been arrested as the government imposed a comprehensive internet shutdown since Thursday, making information difficult to verify.

Trump said Sunday that Iranian officials had called him to negotiate, though Iran's Foreign Minister Abbas Araghchi told diplomats the situation is now under total control while blaming Israel and the US for the violence. Pro-government demonstrations filled Tehran streets Monday in a show of force, with crowds chanting Death to America and Death to Israel. Iran's attorney general has warned that protesters will be charged with waging war against God, which carries the death penalty. Mobile phone service was partially restored Tuesday, allowing some Iranians to describe heavy security presence and burned government buildings in the capital.

The Trump administration announced Monday it will send hundreds more federal officers to Minneapolis following days of confrontations between immigration agents and protesters that left the city tense. Homeland Security Secretary Kristi Noem said the additional officers will arrive to allow ICE and Border Patrol agents to work safely, warning that those who obstruct operations or conduct violent activities against law enforcement will face criminal consequences. The move comes after an ICE agent fatally shot 37-year-old Renee Good in her vehicle last Wednesday.

Minnesota officials, joined by Minneapolis and St. Paul, filed a lawsuit Monday to halt or limit the immigration surge, which Homeland Security calls its largest enforcement operation ever with more than 2,000 arrests since December. The suit accuses the Trump administration of violating the First Amendment and constitutional protections by focusing on a progressive state that voted Democratic and welcomes immigrants. State Attorney General Keith Ellison called it a federal invasion that must stop.

Confrontations Monday stretched across multiple cities, with federal agents using tear gas to disperse crowds in Minneapolis and hundreds protesting outside Somali-run businesses in St. Cloud. Minneapolis police estimated tens of thousands attended weekend protests, with 31 arrests made Friday and Saturday. The Trump administration has defended the agent who shot Good, saying she presented a threat, though videos of the incident show her attempting to drive away from agents. Minnesota officials widely panned that explanation based on available footage.

A federal judge ruled Monday that the Trump administration acted illegally when it canceled $7.6 billion in clean energy grants exclusively for projects in states that voted for Kamala Harris in 2024. U.S. District Judge Amit Mehta said the administration violated the Constitution's equal protection requirements by purposely targeting grant recipients based on whether their state supported Trump electorally, with no rational explanation for how this advanced stated government interests.

The Energy Department had terminated grants supporting hundreds of projects across 16 Democratic-voting states, including battery plants, hydrogen technology, electric grid upgrades, and carbon capture efforts. Officials claimed the projects didn't adequately advance national energy needs or weren't economically viable, with Budget Director Russell Vought declaring the Left's climate agenda is being canceled. The ruling came hours after another federal judge allowed a major offshore wind farm for Rhode Island and Connecticut to resume work.

The canceled projects included up to $1.2 billion for California's hydrogen hub and $1 billion for a Pacific Northwest hydrogen project, while similar projects in Republican-voting Texas and a three-state project in West Virginia, Ohio, and Pennsylvania were spared. Energy Department spokesman Ben Dietderich said officials disagree with the decision and stand by their review process. Environmental Defense Fund general counsel Vickie Patton said the ruling recognized the administration vindictively canceled clean energy projects in disfavored states, imposing high costs on Americans who rely on affordable energy.

President Trump revived a campaign pledge Friday night by calling for a one-year cap on credit card interest rates at 10%, a move that could save Americans roughly $100 billion annually but drew immediate opposition from the banking industry. Trump did not specify whether the cap would come through executive action or legislation, though Republican Senator indicated he would work on a bill with the president's full support, aiming for implementation by January 20, 2026.

Americans currently carry about $1.23 trillion in credit card debt and pay average interest rates between 19.65% and 21.5%, according to Federal Reserve data. About 195 million people held credit cards in 2024 and were assessed $160 billion in interest charges, the Consumer Financial Protection Bureau reports. The proposal targets rates that have climbed near record highs since federal regulators began tracking them in the mid-1990s, though they've decreased slightly as the Fed lowered benchmark rates.

The banking industry immediately opposed the plan, with the American Bankers Association and allied groups warning in a joint statement that the cap would drive consumers toward less regulated, more costly alternatives. Bank lobbyists argue lower interest rates would force them to lend less to high-risk borrowers and potentially eliminate rewards programs, similar to what happened when Congress capped debit card fees. Credit card company stocks dropped sharply Monday, with Synchrony Financial, Capital One Financial, and American Express falling between 5% and 9%. The U.S. already caps some financial product rates, including an 18% limit on credit union cards and a 36% cap for active-duty military members under the Military Lending Act.