RBA Seen Cutting Three More Times by Early 2026, Matching Market
The Reserve Bank will take its cash rate to 3.1% in the first quarter of 2026, from 3.85% now, and then pause for a prolonged period, according to the median estimate of 40 economists in a Bloomberg survey released Wednesday.
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Full transcript of "Face the Nation with Margaret Brennan," July 27, 2025
On this "Face the Nation with Margaret Brennan" broadcast, moderated by Margaret Brennan: Click here to browse full transcripts from 2025 of "Face the Nation with Margaret Brennan." MARGARET BRENNAN: I'm Margaret Brennan in Washington. And this week on Face the Nation: Amid a summer of distraction, President Trump seeks ways to divert attention back to his economic agenda. Leaving behind the Epstein files controversy, Trump teed off in Scotland for a weekend of golf, ahead of trade talks with two key European leaders, as his tariff deadline looms. Before he left, he took his fight with Fed Chairman Jerome Powell straight to the Federal Reserve facility itself, raising questions about renovation costs. (Begin VT) DONALD TRUMP (President of the United States): It looks like it's about $3.1 billion. It went up a little bit or a lot. So the 2.7 is now 3.1. And… JEROME POWELL (Federal Reserve Chairman): I'm not aware of that, Mr. President. DONALD TRUMP: Yes, they – it just… (End VT) MARGARET BRENNAN: We will check in with White House budget chief Russell Vought, who was with the president during his trip to the Fed. Plus, we will ask whether he's eying another round of spending cuts. And we will get the Democratic response from Maryland Senator Chris Van Hollen. Then: Trump's campaign to reshape higher education stretches beyond fines on Ivy League schools. More than 50 top universities are under investigation and at risk of losing funds. We will hear from the president of The Ohio State University, Ted Carter. Finally: Israel announces it will allow aid into Gaza, where the hunger crisis has reached catastrophic levels. When will it stop? We will talk with the foreign minister of France, Jean-Noel Barrot, about international pressure to end the conflict. It's all just ahead on Face the Nation. Good morning, and welcome to Face the Nation. Washington is a little quieter this week. The House started its recess early. And when they return in September, funding the government will be top priority. Meanwhile, we're expecting some key economic indicators. The Fed will announce its outlook on interest rates Wednesday and we will see a new jobs report Friday. That's the same day President Trump is set to slap tariffs on dozens of countries, including America's top trading partners. We begin today with the director of the White House Office of Management and Budget, Russell Vought. Welcome to Face the Nation. RUSSELL VOUGHT (Director, Office of Management and Budget): Thanks for having me. MARGARET BRENNAN: There's so much to get to with you. Let's start on what's going on with the Federal Reserve. If you take the president at his word, he does not intend to fire the Federal Reserve chair, Jerome Powell, though he's still criticizing him. What is the president seeking in a successor when his term ends in May 2026? DIRECTOR RUSSELL VOUGHT: Well, I think he's looking for a chairman that's not continually too late to the developments in the economic marketplace. And I think what we've seen with Chairman Powell, he was very late in the Biden administration to raise rates, to articulate the concern with regard to the Biden administration's spending. We all knew on the outside – even Larry Summers knew that we were going to have an issue with regard to inflation. And we saw, you know, recent historical inflationary levels that we hadn't seen before. And now he is too late to lower inflation rates. And so that is the kind of thing that we want to see in the next chairman of the Federal Reserve. And one of the reasons why is… MARGARET BRENNAN: More of a focus on inflation? DIRECTOR RUSSELL VOUGHT: An ability to recognize the developments in the economic marketplace. In this case, we want to be able to see lower rates and to have an ability to get the economy going. And one of the things we saw with Powell is that one of the reasons he was so late was because he didn't understand that inflation is largely a monetary phenomenon. He kept saying that inflation was transitory. He didn't tackle the problem. And now he's again too late. And you marry that with fiscal mismanagement at the Fed. It's a huge problem that we're trying to raise the country's awareness level with. MARGARET BRENNAN: But, as you know, the Fed is structured in a way where he doesn't have unilateral control. There's a governing board. Others weigh in. You did work on Project 2025, and we went back and looked at what they said in there about the Fed. As people may know, that's a Heritage Foundation product that got a lot of scrutiny during the campaign. The chapter on the Fed called for Congress to overhaul the Fed's focus and powers. Is that what you're looking to do in 2026? DIRECTOR RUSSELL VOUGHT: I don't even know what that chapter says. All I know, in terms of the president, the president has run on an agenda. He's been very clear about that. All that we're doing is – in this administration is running on – is implementing his agenda. MARGARET BRENNAN: You don't want to overhaul the Fed? DIRECTOR RUSSELL VOUGHT: We want an economic system that works for the American people. That includes the Fed. And the president has been very clear that all he's asking from the Fed is lower interest rates, because he thinks it's important. MARGARET BRENNAN: I do want to ask about spending, or lack thereof, that the Trump administration is trying to direct. The White House said they will actually release the remaining $5 billion in education funds that had been withheld from public schools until recently. There were 10 Republican senators very worried about this, and came out and said your claim that the money goes to radical left-wing programs was wrong. What changed your mind? What made you release this money? DIRECTOR RUSSELL VOUGHT: Well, we had been going through a programmatic review with these funds. These are programs that, as an administration, we don't support. We've called for the elimination of them in the president's budget for precisely the reasons of which they flow to often left-wing organizations. Thankfully, the president came into office, put in an executive order that said it can't – these funds can't go to these types of initiatives. I will just give you one example. English language acquisition was flowing to the New York school public education system to go into illegal immigration advocacy organizations. Preschool development grants doesn't actually go to preschoolers. It goes to the curriculum for putting CRT into the school system for people as young – children as young as 4 years old. MARGARET BRENNAN: Well, these senators said it goes to adult learners working to gain employment skills and after-school programs. DIRECTOR RUSSELL VOUGHT: And what we… MARGARET BRENNAN: So you deemed it is necessary? DIRECTOR RUSSELL VOUGHT: We believe that it's important to get the money out right now, but we have taken an extended time frame to be able to make sure it doesn't go to the types of things that we saw under the Biden administration. MARGARET BRENNAN: Because, you know, Senator Lindsey Graham told "The Washington Post" the administration is looking at considering clawbacks from the Department of Education, this, you know, rescissions process. Is that the plan? Are you seeking to claw back education funds in a rescissions package? And, if so, when are you sending that up? DIRECTOR RUSSELL VOUGHT: We may be. We're always looking at potential rescission options. This is an – this is a set of funding that we wanted to make sure it got out. We did our programmatic review. We wanted to make sure it got out before the school year, even though it's multiyear funding. This is not funding that would expire at the end of this year. We are looking to do rescissions package. MARGARET BRENNAN: When… DIRECTOR RUSSELL VOUGHT: We're always gauging the extent to which the Congress is willing to participate in that process. And we're – be looking at a lot of different options along those lines, but certainly have nothing to announce here today. But we're thrilled that we had the first rescissions package in decades, and we've got the process moving again. MARGARET BRENNAN: So no rescissions package before September? DIRECTOR RUSSELL VOUGHT: Not here to say that. We're looking at all of our options. We will look at it and assess where the Hill is, what are the particular funding opportunities that we have, but nothing that we're going to announce today. MARGARET BRENNAN: Because some of the funds that do expire in September have also been held up on the health front. Senator Katie Britt of Alabama, 13 other Republicans came out with a letter saying that you've been slow in releasing funds for the National Institute of Health for research into cardiovascular disease, cancer. Are those funds going to be released? DIRECTOR RUSSELL VOUGHT: Again, we're going through the same process with the NIH that we did with the education. MARGARET BRENNAN: But there's a time cost here. DIRECTOR RUSSELL VOUGHT: I mean, $2 million for injecting dogs with cocaine that the NIH spent money on, $75,000 for Harvard to study blowing lizards off of trees with leaf blowers, that's the kind of waste that we've seen at the NIH. And that's not even getting to the extent to which the NIH was weaponized against the American people over the last several years, with regard to funding gain of function research that caused the pandemic. We have a – we have an agency that needs dramatic overhaul. Thankfully, we have a great new head of it, but we're going to have to go line by line to make sure the NIH is funded properly. MARGARET BRENNAN: Are you going to release the cancer funding research and the cardiovascular disease research funding? DIRECTOR RUSSELL VOUGHT: We're going to continue – we're going to continue to go to the same process that we have gone through with regard to the Department of Education at every one of these agencies. MARGARET BRENNAN: Before September, that money will be released? DIRECTOR RUSSELL VOUGHT: And we will release that funding when we are done with that review. MARGARET BRENNAN: Because, as you know, there's concern that you're withholding the money, hoping it just won't be spent. I mean, if you look at the White House budget, it does call for a 26 percent cut to HHS, $18 billion cut to NIH. Is this just a backdoor way to make those cuts happen? DIRECTOR RUSSELL VOUGHT: Well, I don't want to speak to any specific program with regard to what we might do with regard to rescissions throughout the end of this fiscal year, but we certainly recognize that we have the ability and the executive tools to fund less than what Congress appropriated and to use the tools that the Impoundment Control Act, a bill we're not – a law that we're not entirely thrilled with, gives us to – to send up rescissions towards the end of the fiscal year. MARGARET BRENNAN: So, just for our viewers, the Impoundment Control Act is the legal mechanism for the president to use to delay or avoid spending funds appropriated by Congress. Democrats think you want to have an argument over the power of the purse and who holds it. Do you want that to go to the Supreme Court? DIRECTOR RUSSELL VOUGHT: Well, look, for 200 years, presidents had the ability to spend less than the congressional appropriations. No one would ever dispute and our founders didn't dispute that Congress has the ability to set the appropriation ceiling. But 200 years of presidents, up until the 1970s, had the ability to spend less if they could find efficiencies or if they could find waste that an agency was doing. MARGARET BRENNAN: That sounds like a yes. DIRECTOR RUSSELL VOUGHT: We lost that ability in the 1970s. The president ran on restoring that funding authority to the presidency, and it's vital. If you look at when we started to lose control fiscally, it was right around the time of the 1970s. MARGARET BRENNAN: Well, many senators, Republican senators, are very uncomfortable with the tactics that you are using, Senator Murkowski, Senator Collins, that chair of the Appropriations Committee that is really running this – this funding process. And Senator Collins said you're pushing the limits of what the executive can do without the consent of the – of the legislative branch. You need to work with her to get your budget through. And, in fact, you need to also be able to get Democrats on board to get to that 60-vote threshold to pass any kind of government funding to avoid a government shutdown at the end of September. DIRECTOR RUSSELL VOUGHT: I have a great relationship with Senator Collins. I appreciate the work she does. She is the chairman of the Appropriations Committee, so obviously we're going to have differences of opinion as to the extent to which these tools should be used. I mean, she had concerns with the rescissions package. The rescissions package was a vote that Congress had to make these cuts permanent. And yet… MARGARET BRENNAN: Under – on a party-line vote. She says, you want to go do these clawbacks, you do it through regular order, and you can put – you can put rescissions into an appropriations bill. DIRECTOR RUSSELL VOUGHT: But that was, in fact, under regular order. That's the challenge, is, the appropriators want to use all the rescissions, they want to put them in their bills, and then they want to spend higher on other programs. We act – we're $37 trillion in debt, Margaret. We actually need to reduce the deficit and have a dollar of cut go to a dollar of deficit reduction. That's not what the appropriators want. And it's not news that the Trump administration is going to bring a paradigm shift to this town in terms of the business of spending the people's money. MARGARET BRENNAN: But you would acknowledge that you just added to the debt and to the deficit with this… (CROSSTALK) DIRECTOR RUSSELL VOUGHT: No, I would not acknowledge that. We reduced the deficit. MARGARET BRENNAN: The spending and tax bill that just passed? DIRECTOR RUSSELL VOUGHT: Correct. We… MARGARET BRENNAN: And you lifted the debt ceiling. DIRECTOR RUSSELL VOUGHT: The debt ceiling is an – is – is an extension of the cap on what's needed to pay your previous bills. In terms of the bill itself, it is $400 billion in deficit reduction, $1.5 trillion in mandatory savings reforms, the biggest we've seen in history. MARGARET BRENNAN: You said, a few weeks ago, that the appropriations process needs to be less bipartisan. You only have 53 Republicans. You do need Democrats to get on board, here. Is saying something like that intended to undermine negotiations? Do you actually want a government shutdown? DIRECTOR RUSSELL VOUGHT: No, of course not. We want to extend the funding at the end of this fiscal year. We understand, from a math perspective, we're going to need Democrats to do that. MARGARET BRENNAN: So, what does less bipartisan mean? DIRECTOR RUSSELL VOUGHT: Well, Margaret, the whole week, the Democrats were making the argument that, if you pass the rescissions bill, that you were undermining the bipartisan appropriations process. So, if Brian Schatz and every other appropriator is making that argument for a week… MARGARET BRENNAN: But the chair of the Senate Appropriations Committee, a Republican, said that. DIRECTOR RUSSELL VOUGHT: … you have to be able to respond and say, if you're going to call a rescissions package that you told us during the month of January and February that we should use to do less spending, if you're going to say that is undermining the bipartisan appropriations process, then maybe we should have a conversation about that. That is all it was meant to convey. MARGARET BRENNAN: But the alternative to this process is another continuing resolution, these stopgap measures. Are you open to that, because that would lock in Biden era funding? What is your alternative here? If you want a less bipartisan process, how do you solve for this? Because it sounds like you're laying the predicate for a shutdown. DIRECTOR RUSSELL VOUGHT: We are open to – we are not laying the predicate for a shutdown. We are laying the predicate for the fact that the only thing that has worked in this town – the bipartisan appropriations process is broken. It leads to omnibus bills. We want to prevent an omnibus bill, and all options are on the table to be able to do that. MARGARET BRENNAN: Russell Vought, thank you for your time today. Face the Nation will be back in one minute. Stay with us. (ANNOUNCEMENTS) MARGARET BRENNAN: And we're joined now by Maryland Democratic Senator Chris Van Hollen, who is one of those appropriators we were just speaking about with the budget director. You just heard everything he laid out. There were no specifics on when these clawbacks could be coming, but they're on the table. He says they don't want a shutdown. He didn't seem to say they want a continuing resolution. Do you know what's coming? SENATOR CHRIS VAN HOLLEN (D-Maryland): Not really. The one thing we know – and you asked Russ Vought about this – was, he says that the process is too bipartisan right now, meaning that they want to use this process just to ram through the agenda. And the overall agenda, we saw when they passed the so-called Big Beautiful Bill, which was beautiful for billionaires, but not really for anybody else, which is to provide tax cuts for very wealthy people at the expense of everybody else. And I do want to say, Margaret, I heard him deny that that bill increased the deficit and debt. The nonpartisan Congressional Budget Office just said it increased our debt by $3.5 trillion before added interest. MARGARET BRENNAN: He's using an accounting gimmick in regard to the benchmark. SENATOR CHRIS VAN HOLLEN: As – and Republicans have called out this accounting gimmick. So, when they come… MARGARET BRENNAN: But it was accepted. SENATOR CHRIS VAN HOLLEN: Well, they sort of unilaterally imposed it. It was not accepted by Democrats. MARGARET BRENNAN: Right. SENATOR CHRIS VAN HOLLEN: And it was a departure from previous efforts. But then they come back and they say that they want to cut these important programs, NIH and other things, to reduce the deficit, when, in fact, what they're doing it for is to help try to finance those tax cuts for very wealthy people. MARGARET BRENNAN: So it's just heading us towards pretty unchartered territory and very unclear whether we will be able to avoid a government shutdown. Democrats are going to be blamed if there's a shutdown, don't you think? I mean, how do you sidestep this? SENATOR CHRIS VAN HOLLEN: Well, we certainly don't want a government shutdown. And I think everybody has heard Russ Vought say that they want a less bipartisan process. What that tells me is they're willing just to use their powers to try to shut down the government if they don't get their way. And what's ironic about this, Margaret, is, you have Russ Vought calling for these deep cuts to education, NIH, when he has asked for an increase for his OMB budget. He asked for a 13 percent increase for his OMB budget. He's asked for more people to join the OMB staff, while he's talking about RIFing people at other departments, like the Department of… MARGARET BRENNAN: Reductions in force. SENATOR CHRIS VAN HOLLEN: Yes, getting rid of firing people in the Department of Veterans Affairs and other important priorities. So it's hard to take the OMB director seriously when he says that they didn't increase the debt and when he says he wants to cut things, except for his own budget and staff. MARGARET BRENNAN: But if they do head towards a government shutdown, why would there be any benefit, unless it is to prioritize funding certain agencies and deprioritizing other agencies? SENATOR CHRIS VAN HOLLEN: Well, that… MARGARET BRENNAN: Because that goes back to the executive, doesn't it, that authority? SENATOR CHRIS VAN HOLLEN: Well, that – ultimately, though, you need, for example, four Republican senators to stand behind what he's calling for. And what they called for is sort of just a double cross on the process, right? That's what the so-called – rescissions is just a Washington name for double cross. They support one thing one day. The president even signs off. And then they come back and say they changed their mind. And what we're asking is for four Republican senators just to publicly declare that, when they say they're going to fund the Veterans Affairs Department, that they actually mean it. MARGARET BRENNAN: That they won't later agree to claw that money back. SENATOR CHRIS VAN HOLLEN: Exactly. MARGARET BRENNAN: Right. So one of the things the Trump administration is clear and did get clawbacks of is foreign assistance. However, there's an exception. In June, the administration announced it would give $30 million to this Israeli- backed organization called the Gaza Humanitarian Foundation, the GHF. I know you're familiar with it. It delivers aid through armed military contractors who stand behind the Israeli military in four designated zones that Gazans then have to get themselves to in order to receive the aid. The State Department says they're sending this money. Have they? SENATOR CHRIS VAN HOLLEN: To my knowledge, they have. Although we have asked for the details, we haven't gotten them. In fact, just today, I'm sending a letter to Secretary Rubio signed with 20 of my colleagues calling for more information, but also calling for defunding this. American taxpayers should not be spending one penny to fund this private organization backed by mercenaries and by the IDF that has become a death trap. Over 1,000 people have died from being shot and killed as starving people crowd to try to get food at just these four sites. MARGARET BRENNAN: The – just to be clear here, the State Department says they're going to send $30 million. Reuters had reported that there were documents they obtained showing $7 million had already been sent to these what you call armed mercenaries. But the Trump administration says this is the best way, this is the only way to keep money – to keep food out of the hands of Hamas, which financially benefits off reselling it to desperate, starving people. Is there another way to feed desperate, starving people? SENATOR CHRIS VAN HOLLEN: Yes. And this is a big lie, the claim that, when the U.N. organizations were delivering food to Palestinians, civilians, that it was being systematically diverted to Hamas. I want to say loudly and clearly this is a big lie. Trump and the… MARGARET BRENNAN: The systematic part of that? SENATOR CHRIS VAN HOLLEN: The systematic, but that is their claim. They claim that essentially large amounts of aid are being diverted to Hamas. What we know now from testimony of American officials, Cindy McCain and just this week high-level Israeli military officials is that there's no evidence to support that. AID – USAID just released a report saying there's no evidence to support that. So what the Netanyahu government did was scrap a delivery system that was working at delivering food and assistance in favor of this other effort. That was a pretext, this claim that Hamas was systematically diverting food. The real goal of this other effort is to use food as a weapon of war and population control. MARGARET BRENNAN: That's a violation of international law. SENATOR CHRIS VAN HOLLEN: Yes, it is. MARGARET BRENNAN: That's a human rights abuse. Senator Lindsey Graham was on "Meet the Press" this morning. And I want to ask for your reaction to something he said, because he was very strong in his words. He said, because the cease-fire talks fell apart, Israel's reassessing. He said to expect a full military effort by Israel to take Gaza down – quote – "like we did in Tokyo and Berlin. They're going to do in Gaza what we did in Tokyo and Berlin, take the place by force, start over again, present a better future." The United States is a huge supporter of the state of Israel. Is there anything that could prevent what he says is about to happen? SENATOR CHRIS VAN HOLLEN: Well, the United States should make very clear that it's unacceptable to use U.S. weapons to target or indiscriminately fire on civilians and civilian infrastructure. So… MARGARET BRENNAN: Because this sounds like an occupation. SENATOR CHRIS VAN HOLLEN: Well, we also know just this week members of the Netanyahu coalition, in fact, government ministers, called for essentially erasing Gaza, and they said it will become a Jewish state, statelet, and part of – so this was one of the… MARGARET BRENNAN: Netanyahu did say he didn't agree with the statement. SENATOR CHRIS VAN HOLLEN: Well, here's the problem, though, Margaret. We continually see that Netanyahu at the end of the day does cater to his most far right wing of his government, people like Ben-Gvir, people like Smotrich. That is what has allowed him to stay in power. And so, at the end of the day, he takes the most extreme positions. MARGARET BRENNAN: Senator Van Hollen, thank you for your time today. SENATOR CHRIS VAN HOLLEN: Thank you. MARGARET BRENNAN: We will be right back with a lot more Face the Nation. Stay with us. (ANNOUNCEMENTS) MARGARET BRENNAN: If you're looking for more Face the Nation, including extended interviews and special content, you can find it on our YouTube page or subscribe to our podcast. It's available on all platforms, including Apple Podcasts, Spotify and Amazon. We will be right back. (ANNOUNCEMENTS) MARGARET BRENNAN: We will be right back with a lot more Face the Nation, including an update on the dire humanitarian crisis in Gaza, an interview with the French foreign minister, and a conversation about the future of higher education with the president of The Ohio State University. Stay with us. (ANNOUNCEMENTS) MARGARET BRENNAN: Welcome back to FACE THE NATION. We turn now to the crisis in the Gaza Strip where Israel's partial pause in fighting will end in a few hours. Our Elizabeth Palmer has the latest. (BEGIN VT) ELIZABETH PALMER (voice over): In an abrupt reversal, Israel cleared the way for more aid to Gaza. Overnight, the military air dropped food and supplies. But those pallets are a fraction of what's needed. The bulk of the aid is on trucks, waiting to go. And in what could be a game changer, Israel says it will establish secure routes through the war zone so that trucks will no longer be shot at or looted. Gaza's misery has shocked the world. And international medical agencies say children, especially the poorest and those with special needs, are suffering from acute malnutrition. Since March, when the ceasefire ended, aid has trickled into the war zone, but not nearly enough. Israel sidelined the main U.N. agencies and funneled most aid through the privately run Gaza Humanitarian Foundation, which has only four distribution hubs for 2 million people. As hunger grew, so did reports of Israeli soldiers shooting a crowds trying to get something to eat. Even so, desperation pushed Gazans to risk death, plundering aid from moving convoys. Alongside the shooting war, there was also a war of words. Israel's military insisted it was letting in plenty of aid, it's just the U.N. agencies weren't picking it up. The agencies said the army made it too dangerous. And while the blame game played out, Gazans grew thinner and sicker. Now, Israel has announced a change of policy. Aid has begun moving under the new rules today. For Gazans, it's not a minute too soon. (END VT) MARGARET BRENNAN: That was our senior foreign correspondent Elizabeth Palmer. We turn to the French Foreign Minister Jean-Noel Barrot, who joins us this morning from Paris. Welcome to FACE THE NATION. I want to begin on what is happening in Gaza with those horrific images that we are seeing of starvation. Overnight, Israel has begun air drops. We know Jordan, other states, are looking to organize more aid. Are you exploring any further avenues to bring aid into Gaza? JEAN-NOEL BARROT (Foreign Minister of France): What's happening in Gaza right now is appalling. Gaza is – is – is now on the brink of a food catastrophe. And we've been working out over the months to try and relieve the sufferings of the Palestinian people. We actually have 52 tons of humanitarian help stuck in Elavish (ph), in Egypt, a few kilometers away from Gaza. So, we're exploring all options to seize the opportunity afforded by the Israeli government by opening the skies of Gaza, but we call for immediate, unhindered and massive access by all means of humanitarian help to those who need it most. MARGARET BRENNAN: Has Israel responded to your calls? JEAN-NOEL BARROT: We have with the European Union started tough discussions with the Israeli government who have made first commitments that have not been fulfilled yet. In the next few days, the European Commission will make clear what our expectations are. We expect the Israeli government to stop the operations of the Gaza Humanitarian Foundation that has caused blood bath in humanitarian help distribution lines in Gaza. We expect them to pay the 2 billion euros they owe to the Palestinian Authority and to lift the financial blockage that is now preventing the Palestinian Authority to implement its most basic missions. We also expect the Israeli government to bring to a stop its latest settlement projects, the E1 projects, with 3,400 housing units that might split the West Bank in two pieces and prevent the emergence of a political – a two-state solution. But what we call for is, of course, the immediate ceasefire, the liberation of whole hostages of Hamas that needs to be disarmed, and the entry, the massive entry, of humanitarian help in Gaza. MARGARET BRENNAN: You are headed to New York, to the United Nations, to help lead a summit to talk about a two-state solution. Your president announced France will formally recognize the state of Palestine at the U.N. in September. More than 100 countries recognize Palestine, but France is the first Western U.N. Security Council member to do so. And the United States opposes what you are saying. Secretary of State Rubio called it "reckless." He says it "serves Hamas propaganda," "sets back peace," and considers it "a slap in the face to the victims of October 7th." In your government's view, why is he wrong? JEAN-NOEL BARROT: So, we – the reason why President Macron made this decision is that it was absolutely necessary to restart a political process, the two-state solution process, that was – that is today threatened, more threatened, that it – it has ever been. And the conference that will take place in New York tomorrow and Tuesday is a very significant milestone because by work – by – by recognizing or announcing the recognition of Palestine, France has been able, alongside Saudi Arabia, that has – that will be co-chairing this conference with us, to collect very significant, historic commitments by all stakeholders, including the Palestinian Authority president and Arab countries, in favor of this two- state solution and guarantee its security guarantees for (INAUDIBLE). The two-state solution is very simple. And I think everyone can understand what we mean by that. The only way to bring peace and stability back into this region is to have two state, the state of Israel and the state of Palestine, living side-by-side in peace and in security. And what we're doing by bringing the Palestinian authority leader to recognize 7th of October as a terrorist attack, by calling the Hamas – the disarmament for the – the disarmament of Hamas and the liberation of hostages, by committing to deep reform of the Palestinian Authority and by committing to elections within one year, by bringing the Arab countries for the first time to condemn Hamas and call for its disarmament, we are creating or recreating the conditions for this political solution that, again, is the only path forward. And we are paving the way. MARGARET BRENNAN: Minister Barrot, the president of the United States dismissed what President Macron said. The U.S. ambassador mocked it. Do you believe that your plans can succeed without U.S. support? JEAN-NOEL BARROT: Again, our efforts are very complementary. We shall – the short-term objectives, ceasefire, liberation of all hostages of Hamas and the long-term objective, peace and stability in the region. But in the meantime, until the U.S. administration provides, through the Abraham Accord logics (ph), a political horizon for this crisis, we need to act in order to facilitate the – or create an off-ramp for the catastrophe ongoing in Gaza. Now, the terms we will welcome and support future Abraham Accords. But in the meantime, inaction is not an option. MARGARET BRENNAN: I want to ask you briefly about an incident that has gained a lot of attention this past week involving some young French citizens who were removed from a flight from Spain. The airline claims they were kicked off for being disruptive. The Israeli government came out, though, and said, "the French students were removed because they're Jewish." Have you determined whether this was, indeed, an act of anti- Semitism? JEAN-NOEL BARROT: I have called the CEO of this company, who has – to express our – our serious preoccupation. She has confirmed that an internal investigation is ongoing. My team has been reaching out to the ambassador of Spain in – in France, and we've made the same request. We keep following this situation as it unravels. MARGARET BRENNAN: So, to – to early to say, despite what the Israeli government is indicating? JEAN-NOEL BARROT: I cannot comment on that at this point. MARGARET BRENNAN: France has been very active diplomatically on a number of fronts. It was just five weeks ago when the United States and Israel bombed Iran. Since that time, France has talked to the Iranian government, along with other European powers, about what remains of Iran's nuclear program. How concerned are you that after these bombings Iran may now covertly attempt to make a weapon and the world won't know. JEAN-NOEL BARROT: This is still a risk that we are facing. And alongside the Germany and the U.K., we have been very clear, Iran cannot have a nuclear weapon. And we've been, over the past few months, reaching out to the Iranian authority, in close coordination with U.S. authorities, in order to express what our expectations are. Ten years ago, we reached a deal on the nuclear program that allowed for a significant roll-back of Iranian nuclear capacity. Of course, things have changed. Until then and since then, Iran has violated all commitments it had taken at the time of signing this agreement. We now want more comprehensive agreement that would encompass both the nuclear dimension of Iranian destabilization activities, but also its – the ballistic component as well as the regional destabilization activity that Iran has been conducting. Unless we – unless a new and robust and durable and verifiable agreement is reached by the end of the summer, France, Germany and the U.K. will have no other choice but to reapply the global embargoes that were lifted ten years ago when the nuclear agreement with Iran was signed, embargoes on weapons, on nuclear equipment and on banking. MARGARET BRENNAN: So, France is ready to snap back sanctions on Iran as soon as August. Are you asking Iran to speak directly to the United States in order to avoid that fate? JEAN-NOEL BARROT: Oh, we've been speaking with Special Envoy Witkoff, Secretary Rubio on a weekly basis on this topic that is highly important for the U.S., as for Europeans. We – we have supported U.S.-led efforts to enter into discussions with Iran. We have pressed Iran after the 12-day war to go back to a discussion with the U.S. And we'll keep pressing them to do so because indeed if there is no solid agreement that can be found by the end of August, we will have no other option but to snap back, meaning to reapply those global embargoes, and we are ready to do that. MARGARET BRENNAN: Minister Barrot, thank you very much for your time this morning. We'll be back in a moment. (ANNOUNCEMENTS) MARGARET BRENNAN: We go now to Columbus, Ohio, and the president of The Ohio State University, Ted Carter. President Carter, welcome to FACE THE NATION. TED CARTER (President, Ohio State University): Good morning, Margaret. Good to be with you on this Sunday from Columbus, Ohio. MARGARET BRENNAN: I wanted to ask you very directly about these Trump administration claims that Ohio State is one of 60 universities that they deemed may have anti-Semitic practices and policies on campus. They say you're being investigated for them and for failing to end diversity policies, which could be a violation of the Civil Rights Act. What's the status of the probes and – and how much pressure are you under? TED CARTER: To be quite frank, I'm not feeling a lot of pressure. Our understanding is that we're on those lists because we had been previously on those lists under the Biden administration. We had been working with the Office of Civil Rights during that administration. And I think mostly that was a holdover. We are more than happy to talk to anybody from the Office of Civil Rights. We stand behind our actions. We know how we acted during the time of the protests. We never had an encampment here at Ohio State. We had some attempted. We didn't allow them. That's our long-standing rules on The Oval, which is the centerpiece of our campus. So, I'm confident that as this played out forward, that we're going to be just fine. MARGARET BRENNAN: The Trump administration did publish Ohio State on the list of universities it's probing. And when you look at some of the issues they've raised at other places, you look at the results of freezing $3 billion in contracts at Harvard, $1 billion at Cornell, hundreds of millions of dollars of research funding at universities like Brown. Are you worried that your federal funds could be in jeopardy because of this? TED CARTER: Well, like I always say to my staff and my people, if we do the right things for the right reasons, everything will play out. And we've been doing it that way since I've been here since 1 January of 2024. Our research funding here at Ohio State has grown leaps and bounds over the last couple years. We're actually ranked number 11th in the country, ahead of Harvard, ahead of UNC-Chapel Hill. Our revenues last year were $1.6 billion, $775 million of that came from the federal government, largely in NIH and NSF. As we sit here today, we've had some research grants impacted, but in the tens of millions of dollars. Nothing like you're seeing at our Ivy League colleagues. And a lot of that is still in litigation. So, I can't even tell you what the – the number of dollars that we may lose. But against the $1.6 billion, it's pretty small, even though it's had some impact on some of our researchers. Unlike some of our counterparts, we have a significant research arm here, 14,000 faculty, post doc students that do the research here, and it is significant. It goes way beyond the numbers and the dollars. It's what it's doing for the community, what it's doing to extend and save and change lives and what it's doing in agriculture, what it's doing for our police force. So, what I would tell you is the – at this moment today, even compared to where we were last year, we're still up in our research revenue about 7 percent from where we were last year. And we're – we're proceeding to ask for more grants so that we can be a cancer-free world here in our lifetime. MARGARET BRENNAN: Well, we all hope for that future, sir. But you sound not to be concerned, but I did read that earlier when you had the Buckeyes football team at the White House earlier in the year, and that was well covered, "The Wall Street Journal" said you told President Trump and Vice President Vance that, quote, "Ohio State is not the enemy." Why did you feel you had to say that? What did you mean? TED CARTER: Well, that might have been taken a little bit out of context. I kind of said that in jest a little bit to the vice president when I had a chance to meet with him. And we had a long conversation. It was a very productive conversation. I won't go into all the details. But the point is, they know that Ohio State is doing the right things for the right reasons. I have said publicly that I believe the future of higher education is going to go through the large public land grant flagship institutions like The Ohio State University. I look at what we're doing today. And, yes, like many other universities, there's a lot of concern about the future, what's coming out of the federal government, and even what's coming out of our state government here in Ohio. But right now, I feel like we can still play defense, still understand how to adjust, kind of make sure that we're getting our bat on the ball, so to speak, and playing defense and protecting the plate. But we're also looking at how we can play offense. This is a time where institutions like Ohio State, we are very financially secure. We're actually looking to invest in ourselves. You know, I just reflect on the graduation ceremony that we just had this past May. We produce about 18,000 graduates a year. But at that ceremony, we graduated 12,400. All of them, by the way, got their diploma that day that they earned. And 90 percent of those students, 90 percent, already had a job or they were going to another higher academic endeavor. And 70 percent of those undergraduate students are staying in the state of Ohio, 66 percent of the Ph.D. and masters are staying in the state of Ohio. This is a wonderful workforce development program that is what is raising the confidence of Ohioans and the American public in higher education. And that is starting to change. MARGARET BRENNAN: Vice President Vance was on this program a number of times. And one when them when he was still a senator. I spoke to him about his views on higher education. He is an Ohio State alum undergrad. And he said he believes universities – he wasn't speaking of yours, but he said "universities are controlled by left-wing foundations and they're going in the wrong direction." Do you think he has a point? TED CARTER: I think higher education has started to build that reputation. And you can even see that in the Gallup-Lumina polls. You know, I was the superintendent of the Naval Academy from 2014 to 2019. You know, in that Gallup poll in 2015 said that nearly 60 percent of Americans had high confidence in post-secondary education. Now, go ahead and just move that needle nine years forward, and yet two in three Americans said they did not have confidence in higher education. That's a really bad mark. Americans were saying higher education costs too much. They were saying that the return on investment was difficult to prove. They were even saying some of the research being done may not impact them or their families. And, yes, there was this conversation about the potential indoctrination of students or that institutions were leaning very liberal. You know, we, as administrators of higher education, maybe ought to listen to the American public and say, maybe we haven't always gotten it right. So, I'm here to say here at The Ohio State University, we have paid attention to that. We are making efforts to make affordability a key issue for students. MARGARET BRENNAN: Yes. TED CARTER: I mentioned that graduating class, 57 percent of those undergraduates left with zero debt. Zero debt. And the other 43 percent that left with debt was less than $24,000. And as we look across, you know, our hiring practices, I have 8,500 faculty. MARGARET BRENNAN: Yes. TED CARTER: It is the best group of faculty I have ever worked with in my 12 years in leading in higher ed, and that's saying quite a bit. MARGARET BRENNAN: Well, I – on that – TED CARTER: And I will tell you that as we hire the future, we're looking across the entire political spectrum for who we hire. MARGARET BRENNAN: On that point, you talked about what happened at the state level. The Republican-controlled state legislature passed a law that eliminates the diversity programs, does a number of things, but it also requires professors to post their course syllabus, syllabi, online, and their contact information. Do you think that this is meant to intimidate? Are you concerned? Is your faculty concerned about the focus on what they're doing? TED CARTER: Yes, I have talked to our faculty, our – you know, through our faculty senate and our leadership. There are some concerns, of course, because we have not done that before. We've got some time before we implement that. We have put all the pieces of Senate Bill 1, which is the general assembly's bill here in the state of Ohio, into implementation phase. We're still working through some of the details. But let me tell you, the principles of academic freedom, what is taught in the classroom, the – the move towards scholarly pursuit, the research that we do here at Ohio State, those are things that we are still very passionate about. And I know that we're going to continue that work. And yet we'll still follow the law. We'll still follow some of the federal policies that are coming out. We're ready and prepared to do all of that. MARGARET BRENNAN: Well, to – to that point, you saw what Columbia University did this week in paying that $200 million fine to settle their dispute with the Trump administration. They also agreed to an outside monitor to assure the school complies with stamping out diversity programs. Does this precedent trouble you? I mean, would you take a deal like that? TED CARTER: Well, I can't speak to those institutions because I'm not leading them. I – I know both the – President Shipman and some of the other Ivy League presidents. They're colleagues. And they're having to do, I think, what I would call be in survival mode, quite frankly. We're not going through any of that here at Ohio State, and nor do I think that we will. I mean, obviously, we have a new state law where public institutions MARGARET BRENNAN: Yes. TED CARTER: So, that means we're going to be transparent and put out everything that we do so that the state of Ohio – MARGARET BRENNAN: OK. TED CARTER: The people and the entire country can see it. MARGARET BRENNAN: We will watch to see what happens. Good luck to you, sir. We'll be right back. TED CARTER: Thank you. (ANNOUNCEMENTS) MARGARET BRENNAN: That's it for us today. Thank you all for watching. Until next week. For FACE THE NATION, I'm Margaret Brennan. (ANNOUNCEMENTS)
CNN
11 minutes ago
- CNN
On GPS: Is a second ‘China shock' coming?
The 'China shock' at the turn of this century wreaked havoc on US manufacturing and upended the global trade system. Fareed speaks with David Autor, one of the economists who first identified the 'China shock.' He warns that a second shock is coming — and this one will be worse.
Yahoo
35 minutes ago
- Yahoo
This could be the most consequential week for the economy in years
The state of President Donald Trump's economy is about to come into full view. A slew of crucial economic data is set for release this week, including the jobs report, inflation, consumer confidence and corporate earnings. We'll get the first glimpse at America's second-quarter gross domestic product, the broadest measure of the economy. And, most crucially, the Federal Reserve will decide whether to cut rates or hold steady one more time. As if that weren't enough, Trump's trade polices also come due: Friday is the administration's self-imposed deadline for settling tariff rates for all 200+ US trading partners. Trump's top economic advisers will be negotiating a trade framework with China in Sweden. And an appeals court will hear arguments this week about whether the bulk of Trump's tariffs are even legal, to begin with. Altogether, the data could paint a picture of an economy that is resilient — but slowing under the weight of Trump's dizzying tariff changes, reductions in government workers and spending, and an aggressive deportation of foreign-born workers. Here's a look at what to expect this week and why the data matters: Corporate earnings Some of the biggest names in tech are set to release earnings this week, including Microsoft, Meta, Amazon and Apple. That will set the tone for market sentiment. Tech stocks have fueled record market growth in recent months as investors focus on gearing up for AI expansion. So far, around 80% of S&P 500 companies reporting earnings this season have beaten estimates, according to FactSet. Overall, stocks have marched higher into record territory recently, supported by cautious optimism in trade deals and better-than-expected economic data. That has emboldened Trump to push harder on his trade deals, telling NBC News earlier this month that markets hit new highs because 'tariffs have been very well received.' Why it matters: Strong earnings could continue to boost the stock market, which is starting to look a bit expensive for some investors. That could also convince Trump that the market — which turned on him in April — has acquiesced to his plan for higher tariffs. Consumer confidence and sentiment Two separate reads on the way Americans are feeling about the economy are set to be released this week. Consumer confidence, as measured by Conference Board, sank to the lowest level since the pandemic when Trump slapped massive tariffs on major trading partners. Shoppers expressed concern about the negative impact on the economy and prices. But consumers are generally more optimistic now that trade deals are beginning to emerge. The consumer sentiment survey from the University of Michigan continues to show that shoppers are wary of inflation levels rising again, after the economy batted down historic price increases following the pandemic. Although sentiment has rallied back from near-record lows earlier this year, it remains depressed because of Trump's trade policy. Why it matters: Economists pay close attention to consumers' optimism, since their spending powers two-thirds of the economy — and when shoppers think prices are about to rise, they tend to pull back. The latest retail sales data shows that consumers are spending cautiously. Second-quarter GDP GDP is a key indicator of economic success and, arguably, a validation of Trump's policies. But this quarterly assessment has slumped in recent months, even shrinking in the first quarter of the year for the first time since 2022. Economists expect an improvement for the April-June quarter as imports rebalance after companies raced to front-load their purchases ahead of Trump's tariffs. They warn that, just as an inventory spike may have artificially hurt GDP in the first quarter, companies working through their warehoused goods in the second quarter may make the economy look better than it actually is. Why it matters: The US economy is large and resilient, and it has continued to support hundreds of thousands new jobs each month for years. But if Americans are getting cold feet, things could take a turn for the worse. Fed decision Trump has repeatedly — and publicly — berated Fed Chair Jerome Powell for not lowering the bank's interest rate (their recent détente notwithstanding), but the central bank is overwhelmingly expected to hold rates steady Wednesday at the conclusion of its two-day monetary policy meeting. In an unusual kink, two governors are expected to vote against the consensus of the board, which hasn't happened in three decades. With the job market still relatively strong, most Fed officials have said the economy can withstand higher rates for the time being. Meanwhile, they want to wait to see how Trump's policies of high tariffs and deportation of foreign workers impact inflation and the labor market. Why it matters: The bank is widely expected to start cutting its key overnight lending rate in September — a good sign for Americans hoping to borrow money, and especially for first-time homebuyers, who have been effectively locked out of the market with mortgage rates close to 7%. Inflation The Fed's favorite inflation gauge, the Personal Consumption Expenditures index, has been creeping higher — moving further away from its 2% goal in recent months. That's just one factor behind the central bank's position on rate cuts. Why it matters: Shoppers have been pulling forward purchases, including back-to-school items, to mitigate expected higher prices, but the July data will likely still bear the fingerprints of Trump's tumultuous trade policy: Items like furniture and toys are starting to reflect elevated costs as pre-tariff inventory is depleted. Trade deadline Trump's pause on the hefty and unpopular tariffs he rolled out in April expires on August 1. In the intervening period, the White House has scrambled to make deals with a slew of partners, announcing preliminary arrangements with the UK, China, Vietnam, Indonesia, the Philippines and Japan. As the final deadline approaches, Trump said Friday he would be sending out letters to roughly 200 countries this week unilaterally setting a range of tariff rates. 'It's basically going to say, you're going to pay 10%, you're going to pay 15%, you're going to pay maybe less, I don't know,' Trump told reporters before he left for a trip to Scotland. US markets are 'very, very fixated' on the levels that are set, and an effective tariff rate beyond 20% on major trading partners could trigger a downturn on Wall Street, one analyst told CNN. Why it matters: Trump's tariffs that are currently in effect have raised the effective US tariff rate — the average tax that US importers pay on foreign goods — from around 2% to 18%, the highest since 1934, economists at Yale's Budget Lab said in a recent report. That works out to $2,400 a year in added costs for the average American household. The US economy and markets have been able to withstand that so far. A considerably higher tariff rate could put that to the test. Trade negotiations Talks with China are ongoing, however. Treasury Secretary Scott Bessent is set to meet Monday and Tuesday with Chinese officials to iron out the details of the framework the two countries agreed upon at their London and Geneva meetings. Trump in April slapped a 145% tariff on imports from China, prompting Beijing to respond with a 125% tariff on imports from the United States. That effectively created a total embargo between the world's two largest economies before they agreed on a pause until August 12. Meanwhile, on Thursday, the US Court of Appeals will hear oral arguments about whether Trump can use his emergency powers to levy tariffs after a lower court ruled he had exceeded his authority in doing so. Why it matters: One of the Trump administration's goals is to shift China towards a more consumer-driven domestic economy, thereby reducing global oversupply of its manufactured goods. While it's unlikely that the United States will dramatically reshape Chinese President Xi Jinping's economic policy, small changes could open some of China's market to US manufacturers, while helping to increase American factory jobs. Jobs report Trump has promised a 'Made in America' revival, but the July jobs report is expected to show that average monthly employment gains have dropped to a level not seen since 2010 (excluding the pandemic-era losses). The labor force has shrunk in recent months, a potential indication of how anti-immigrant rhetoric and mass deportations are weighing on employment. In addition, the most recent report showed that the manufacturing sector lost jobs for the second-straight month — a murky development for one of Trump's benchmark economic priorities. Why it matters: America's labor market has been its strong suit for years, routinely defying expectations since the pandemic. But it's showing cracks. Americans who lose their job are now staying unemployed for longer as businesses stall on making decisions, including hiring, as the trade war continues to raise costs. 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