The briefing for Monday, August 3.

Acting Attorney General Todd Blanche issued a formal order late Sunday terminating President Trump's $1.8 billion anti-weaponization fund, ending weeks of negotiations with Republican senators who blocked his nomination. The move comes ahead of Tuesday's confirmation vote in the Senate Judiciary Committee. A spokesperson for Texas Senator John Cornyn confirmed the deal, while North Carolina Senator Thom Tillis had not immediately commented.

The fund was announced earlier this year as part of a settlement to Trump's lawsuit against the IRS over leaked tax returns. It would have allowed Trump allies to claim compensation for what they described as politically motivated prosecutions. The proposal sparked bipartisan outrage over the possibility that January 6 rioters, including those convicted of assaulting police officers, could receive payments. Blanche had previously testified that the fund would not move forward, but Cornyn and Tillis demanded written guarantees before supporting his nomination.

The order also narrows the scope of tax audit immunity provided in the IRS settlement. The clarification states that immunity applies only retroactively to claims open at the time of settlement and does not protect future tax filings. According to the Justice Department, no members were appointed to oversee the fund, no funds were transferred, no claims process was established, and no payments were made. Blanche said the order came after good faith discussions and establishes beyond doubt that there is no fund.

President Trump said Sunday that new talks with Iran will begin Monday afternoon, after announcing he had called off what would have been massive strikes on the country. Speaking aboard Air Force One, Trump said Iran and U.S. allies in the Middle East had asked him to hold off on attacks as the parameters of a deal had been agreed upon. He declined to outline a deadline for reaching an agreement but said the U.S. remains ready to go at any time.

Iran's response has been mixed and contradictory. Foreign Ministry spokesperson Esmail Baghaei said the Strait of Hormuz will in no way return to its pre-February 28 status, and that Iran is only discussing shipping through the strait with Oman, not the U.S. Iran's semi-official Mehr news agency denied Tehran had requested the U.S. hold off on military action, calling Trump's claims a new lie. Iran's acting defense minister said the country views every threat as real and credible, adding that Iran will neither be caught off guard nor remain passive.

Oil prices dropped sharply on the news, with U.S. crude falling 5% to $80.79 per barrel and Brent crude declining 5% to $83.87. The Strait of Hormuz normally handles about 20% of the world's traded oil and natural gas, but shipping has been disrupted since the conflict began in late February. Trump has previously announced halts to Iran strikes multiple times, only for fighting to resume. The proposed deal would reportedly include reopening the Strait of Hormuz and addressing Iran's nuclear program, though details remain unclear.

The United States and Japan confirmed Monday they jointly intervened in currency markets last week to halt the yen's slide to a 40-year low. The coordinated action marks the first joint intervention since 2011, when both countries acted together to weaken the yen following the devastating earthquake and tsunami. Before the intervention, the dollar was trading above 163 yen; it dropped to around 156 yen following the confirmed action.

Japan's Ministry of Finance said the intervention countered excessive volatility and disorderly movements in the yen in recent months. U.S. Treasury Secretary Scott Bessent stated the coordinated actions support Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen. Bank of Japan data indicated Tokyo may have sold almost $59 billion in the intervention, while a Reuters photograph of Bessent's notepad during a cabinet meeting showed a to-do item reading: Buy Japanese Yen $5-10 bil.

The yen's prolonged weakness stems primarily from Japan's much lower interest rates compared to other major economies. The Bank of Japan's benchmark rate stands at 1%, the highest since 1995, while the Federal Reserve's rate ranges from 3.50% to 3.75%. Japan also faces challenges including a declining working-age population, low productivity, and heavy reliance on dollar-priced energy imports. Both governments indicated they will not hesitate to conduct additional joint interventions in the future to prevent disorderly currency movements.

Record low water levels on the Danube River are forcing governments across Central and Eastern Europe to implement electricity conservation measures as power plants face potential shutdowns. In Budapest, the Danube dropped to around 10 centimeters on Monday, well below the previous record low of 33 centimeters set in 2018. No significant rainfall is forecast as a renewed heat wave with temperatures topping 38 Celsius bears down on the region.

Hungary's Paks nuclear power plant, which accounts for nearly half the country's electricity production, has reduced output to just 240 megawatts from its usual 2,000 megawatts due to insufficient cooling water from the Danube. Prime Minister Péter Magyar said engineers temporarily kept the final operating turbine running over the weekend, but a complete shutdown is expected Tuesday or Wednesday. The plant has operated for 44 years without ever fully powering down. Magyar's government issued a decree Saturday allowing mandatory electricity conservation for large industrial or commercial consumers.

Similar crises are unfolding across the region. Romania's military used 180 kilograms of explosives to blast rock and redirect water toward the Cernavoda nuclear plant, which has already shut down one reactor and operates at half capacity. Romania declared a nationwide state of alert in the energy sector Friday. In Serbia, record-low Danube levels have reduced the country's key hydroelectric plant to 20% capacity, prompting an emergency government meeting Monday. Officials are appealing to citizens to voluntarily limit electricity use during peak evening hours.

Israel has shared serious security concerns with the White House regarding the proposed Hamas disarmament agreement, according to an Israeli official, as strikes over the weekend killed at least 17 Palestinians in Gaza. Doron Spielman, spokesperson for Prime Minister Benjamin Netanyahu's office, told the Associated Press that Israel's intelligence assessment indicates Hamas remains committed to rebuilding its military rather than genuinely demilitarizing. He said Israeli forces will not withdraw from Gaza, where they control more than 60% of the territory, before Hamas disarms.

The comments follow President Trump's announcement last week that Hamas agreed to begin disarming as part of a U.S.-brokered ceasefire signed nine months ago. Trump's 20-point plan calls for Hamas to surrender weapons and destroy its tunnel network, with Israeli forces withdrawing from Gaza and a new technocratic Palestinian government arriving. However, the agreement specifies that the process to decommission heavy weapons and dismantle military sites will begin only after the Palestinian National Committee arrives and international forces deploy, with implementation linked to phased Israeli withdrawal.

Israeli Energy Minister Eli Cohen said Sunday no deal has been reached to stop attacks on Gaza, and suggested full Israeli control may be necessary if Hamas doesn't disarm, despite the peace plan calling for Israeli withdrawal. The Israeli military said it targeted Hamas operatives over the weekend, killing two commanders and another militant. Palestinian health officials reported deaths including children in strikes on Gaza City, Khan Younis, and Deir el-Balah. More than 1,100 Palestinians have been killed since the supposed ceasefire took effect last October. Israel faces upcoming elections in October, with Netanyahu under pressure from far-right coalition partners to maintain forces in Gaza.

The Trump administration is planning a dramatic overhaul of Head Start that would replace more than 100 pages of quality standards with approximately a dozen pages of rules, leaving most specifics to state and local law. Two people familiar with the deliberations told the Associated Press that the changes would upend the hallmarks of the early education program for impoverished children. The White House, Office of Management and Budget, and Department of Health and Human Services did not respond to questions about the changes.

Head Start, established in the 1960s as part of President Johnson's War on Poverty, serves more than half a million low-income babies, toddlers, and preschoolers nationwide. Current regulations outline detailed requirements on child-to-teacher ratios, health screenings, family engagement, curriculum frameworks, and prohibitions on physical and emotional abuse. The proposed rules would eliminate or loosen many of these requirements while adding new documentation requirements for homeless or unemployed parents. An early version would have barred parents in the U.S. illegally from enrolling their children, even if the children are U.S. citizens, though it's unclear if this provision will make the final draft.

Khari Garvin, who ran the Office of Head Start under President Biden, said the changes would leave only the carcass of Head Start, with a program called Head Start that lacks substance. Tommy Sheridan, deputy director of the National Head Start Association, said the organization is anxious but ready to fight back when the proposed rules are released. Once made public, federal law requires at least a month for public comment before finalization, and implementation could face legal challenges. The changes would deliver a win for conservatives who have sought wholesale elimination of the program.

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