The briefing for Thursday, September 17.

The Federal Reserve raised its benchmark interest rate on Wednesday to a range of 3.75%-4%, up from 3.5%-3.75%, in a unanimous decision aimed at curbing persistent inflation. Fed Chair Kevin Warsh called the move a "sober" and "responsible decision," noting that inflation has remained above the central bank's 2% target for more than five years. It marks the first rate hike since July 2023 and the first change in either direction since a cut in December 2025.

President Trump publicly opposed the increase, posting on social media that rates "should be 1%, or less," and later telling reporters the Fed's board was "hostile" and "very political." Trump had appointed Warsh in part on hopes he would cut rates, with Democratic lawmakers previously warning he could become the president's "sock puppet." Warsh declined to discuss any conversations with Trump directly but said inflation remained the Fed's central concern despite a strengthening economy and jobs market.

The increase will raise borrowing costs across the economy. Major banks including JP Morgan, KeyCorp, and BNY immediately raised their prime lending rate to 7% from 6.75%, affecting credit cards and personal loans. Mortgage rates, currently averaging 6.76% for a 30-year fixed loan, could also climb further, though existing fixed-rate borrowers won't see changes to their payments. Senate Democratic leader Chuck Schumer blamed Trump's economic management for the rate hike's fallout, saying it would make "everything become more expensive."

Wall Street reacted negatively, with the Dow Jones Industrial Average dropping 631 points, or 1.2%, while the S&P 500 fell 0.4%. Fed officials signaled more hikes may be coming, with a median forecast of the federal funds rate reaching 4.1% by year's end. Asian markets were mixed Thursday, and Treasury yields rose as investors weighed both the rate decision and the inflationary pressure from soaring oil prices tied to the ongoing US-Israel war with Iran.

A federal judge issued a preliminary injunction blocking immigration officers in Southern California from making warrantless arrests unless they can show, based on the "totality of circumstances," that a person is likely to flee. U.S. District Judge Maame Ewusi-Mensah Frimpong's order, granted September 2 and unsealed Wednesday, applies across the Central District of California, including Los Angeles, Orange, and five other counties. The ruling also requires the government to thoroughly document probable cause before an arrest, and states that undocumented status alone is not sufficient justification for a warrantless detention.

The lawsuit, filed by the ACLU of Southern California, Public Counsel, and local immigrant advocacy groups, came amid what plaintiffs described as an unprecedented surge of immigration enforcement in the region. Government attorneys argued there was no formal requirement for officers to document their reasoning, citing a January 2026 ICE memo allowing "on-the-spot" determinations. Frimpong pushed back, saying the government had not shown evidence that such assessments were actually being conducted in most cases, citing one instance where video contradicted an agent's claim that a suspect was "running away."

The ruling follows a pattern: federal judges in Portland, Colorado, Washington, D.C., and the Eastern District of California have issued similar blocks on warrantless arrest practices. A related but broader restraining order from Frimpong was previously lifted by the Supreme Court last year, when Justice Brett Kavanaugh ruled that apparent ethnicity could be a relevant factor for a stop when combined with other information. The Department of Homeland Security did not immediately respond to a request for comment on the new order.

ACLU attorney Mayra Joachin said the ruling "should put an end to hundreds—if not more—of unlawful arrests that continue throughout Southern California." The decision adds to a growing body of federal case law constraining how immigration agents can operate without warrants, a legal fight likely to continue as similar cases proceed in other jurisdictions.

The U.S. House of Representatives passed legislation Wednesday giving President Trump broad authority to impose tariffs of up to 100% on countries that purchase Russian oil and gas, along with expanded sanctions powers targeting Russia. The bill now heads to Trump's desk. India and China are the two countries most exposed, together accounting for roughly 87% of Russia's crude exports since the invasion of Ukraine, according to the Centre for Research on Energy and Clean Air.

Russia supplied more than 30% of India's crude imports in fiscal 2026, worth $40.8 billion, more than the country's next six suppliers combined. Indian officials said the country buys Russian oil to secure affordable energy for its 1.4 billion people, not to finance the war, and that the purchases have helped stabilize global oil supply. A former Indian trade official called the bill "a blunt and dangerous attempt to pressure India" into a one-sided trade deal, while analysts note that replacing Russian crude at scale would raise costs through higher freight, insurance, and longer shipping routes.

Democratic Senator Richard Blumenthal framed the legislation bluntly, telling reporters that India and China should "buy your oil and gas somewhere else." Under the bill, targeted countries would normally have 180 days to cut Russian energy imports or negotiate with Washington, though the president can shorten that window. Analysts warn the tariffs would hit India not through a direct tax on Russian crude, but through steep tariffs on Indian exports to the U.S., potentially straining the rupee, refinery margins, and trade balance during sensitive ongoing trade talks between the two countries.

Canadian Prime Minister Mark Carney addressed the European Parliament in Strasbourg on Thursday, a day after European Commission President Ursula von der Leyen proposed making Canada the EU's first-ever "associate member"—a new status that would require treaty changes. President Trump responded by calling the prospect "laughable," labeling Canada a "terrible trade partner," and warning that if the EU's move reflected "bad intention," the U.S. would impose "very heavy tariffs on Europe" and potentially cut off trade in certain sectors.

The proposal marks a striking escalation in the realignment between Ottawa and Brussels that began emerging this week. Von der Leyen said the goal was an "Alliance for the Future" encompassing a shared prosperity and economic security space, going beyond the existing Canada-EU free trade agreement. Carney embraced von der Leyen in the European Parliament chamber as lawmakers gave the proposal a standing ovation. A Canada-EU summit is planned for Montreal on October 29-30 to work out details, though Canadian officials say they are seeking deep integration without full EU membership, which would require ceding sovereignty.

Analysts frame the shift as a direct consequence of Trump's trade posture toward Canada, including his tariff threats, demands for economic concessions, and repeated suggestions that Canada become the "51st state." Unlike the EU, which largely accepted new U.S. tariffs of up to 15%, Canada has imposed retaliatory tariffs and rejected demands it says threaten its sovereignty. Roughly 70% of Canadian exports currently go to the United States, leaving Ottawa highly exposed and driving its push to diversify toward Europe, including membership in the EU's SAFE defense procurement program earlier this year.

The dispute underscores growing unease among traditional U.S. allies about relying on Washington, with one European diplomat describing Canada-EU talks as going "as close as you can get without actually becoming an EU member." Carney's Thursday speech was watched closely for signs of another pointed rebuke of U.S. economic pressure, following his address in Davos in January warning that dominant powers can use economic dependence to bully smaller nations.

Swedish Prime Minister Ulf Kristersson announced his resignation Thursday after his right-wing governing bloc was narrowly defeated in Sunday's general election, losing by roughly 50,000 votes out of about 10 million. The opposition, led by Magdalena Andersson of the Social Democrats, is set to win 176 of 349 seats in the Riksdag, compared with 173 for Kristersson's coalition, pending formal certification expected this weekend.

Kristersson's government had relied on support from the hard-right, anti-immigration Sweden Democrats, a party founded by Nazi sympathizers in the 1980s that rebranded itself over the following decades and became Sweden's second-largest party in 2022. Kristersson had pledged to bring the party into his cabinet if reelected, but the Sweden Democrats lost support for the first time since entering parliament in 2010, dropping three percentage points from the 2022 election.

Andersson has begun talks with the Left Party, Centre Party, and Green Party to form a new government, though major policy differences—particularly over taxes—could slow the process. Sweden has a history of lengthy coalition negotiations: forming a government took 37 days after the 2022 election and 134 days after the 2018 election. Kristersson noted in his resignation statement that the opposition faces "complicated" conditions given prior campaign commitments made by the various parties.