Fed Rates Pause, USIP Loses Case, Israel Restarts Gaza Ground Invasion

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Speaker 3 I wouldn't want to put America through that, though.

Speaker 3 Even in my weakened condition.

Speaker 1 The Federal Reserve is warning that inflation is coming as it held interest rates steady.

Speaker 6 Clearly, some of it, a good part of it, is coming from tariffs.

Speaker 3 President Trump doesn't like it. He wants the Fed to lower rates.

Speaker 1 I'm Layla Falden. That's A.
Martinez, and this is Up First from NPR News.

Speaker 1 A federal judge says Doge probably terrorized people when they forced their way into the U.S. Institute of Peace.

Speaker 1 But while she found the way American citizens were treated offensive, she denied a request to stop the dismantling of the agency. We tell you why.

Speaker 3 And Israel launched a new ground invasion into Gaza after breaking the ceasefire with Hamas. What are Israel's goals, and what does it mean for the Palestinian people caught in the middle?

Speaker 3 Stay with us. We've got all the news you need to start your day.

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Speaker 3 The Federal Reserve is warning that President President Trump's new tariffs could hurt the U.S. economy.

Speaker 1 The central bank on Wednesday cut its economic growth forecast and raised its expectations for inflation. Fed Chair Jerome Powell said that tariffs are playing a role in inflation.

Speaker 6 Clearly, some of it, a good part of it, is coming from tariffs.

Speaker 1 President Trump said later on social media that the Fed, an independent agency, should lower rates as tariffs set in.

Speaker 3 NPR financial correspondent Maria Aspen joins us now to explain. So, Maria, President Trump often called on Jerome Powell to lower rates in his first term.
So why then and why now?

Speaker 8 Well, the Fed's interest rates set the bar for what consumers pay for all kinds of loans. Cars, credit cards, business loans, and lower rates mean, in general, lower loan prices for consumers.

Speaker 8 But yesterday, the Fed did exactly what had been expected. It held interest rates steady.
And it also signaled that it's still on track to cut interest rates twice later this year.

Speaker 8 That said, a lot has changed in the last several weeks.

Speaker 8 President Trump has been implementing a very aggressive and very very chaotic trade policy with these on-again, off-again tariffs against some of the country's largest trading partners.

Speaker 8 We've seen all this uncertainty hit consumers and businesses and stock market investors. And now the Fed is also saying that, yeah, it's dealing with more uncertainty around the economic outlook.

Speaker 8 The Fed isn't taking any major action yet, but it did say yesterday it's now expecting the economy to grow more slowly this year than it previously projected and inflation to grow faster.

Speaker 3 But why isn't the Fed taking more action?

Speaker 8 It says the underlying economy is still strong. Unemployment remains low and prices are still relatively stable compared to a couple of years ago.
This is Chair Powell yesterday.

Speaker 6 We will be watching very carefully for signs of weakness in the real data. Of course we will.
But given where we are, we think our policy is in a good place.

Speaker 6 to react to what comes, and we think that the right thing to do is to wait here for greater clarity about what the economy is doing.

Speaker 8 Now, the Fed's job is to take the long-term view and to be steady. That becomes even more important in an uncertain environment.

Speaker 8 And Powell is also trying to maintain the Fed's independence from the White House at a time when President Trump wants to exert more control over independent agencies.

Speaker 8 So, Powell is threading this needle of doing what's best for the overall economy without perhaps provoking the White House to take action against him or the Fed.

Speaker 3 Now, despite the Fed's warnings about the economy, investors seem pretty confident the Dow closed up more than actually almost 400 points. So, what has reassured investors so much?

Speaker 8 Powell was pretty mild in his comments overall, and that's kind of his job.

Speaker 8 As you know, A, some of the market sell-off we saw last week started when President Trump said he couldn't rule out a recession amid a lot of warnings about the economic damage his tariffs could do.

Speaker 8 And the argument Trump is making is that tariffs will be good for the U.S. long term, and that will be worth any shorter term pain.

Speaker 8 But most people don't really want to experience any pain, even if it does turn out to be shorter term. So when Powell emphasized yesterday that the U.S.

Speaker 8 economy is strong and prices aren't soaring up too much yet, at least for the day, that was a pretty reassuring message.

Speaker 3 All right, that's MPR's Maria Aspen. Thanks a lot.

Speaker 8 Thank you.

Speaker 3 A federal judge in Washington, D.C. has denied a request to block the Department of Government Efficiency's takeover of the U.S.
Institute of Peace.

Speaker 1 That's despite the fact that the judge has serious concerns about the tactics Doge used to force its way into USIP.

Speaker 3 MPR justice correspondent Ryan Lucas was at the federal courthouse yesterday in Washington. So, Ryan, all this stems from a lawsuit that was filed by several members of the U.S.
IP board.

Speaker 3 What is it that they were asking the court to do here?

Speaker 6 Right. Five members of the USIP board filed this lawsuit overnight Tuesday.
The court held a hearing on it Wednesday afternoon, so that gives you a sense of the urgency here.

Speaker 6 What the lawsuit argues is that the USIP board members were unlawfully removed from their positions by President Trump.

Speaker 6 They say that USIP is an independent nonprofit think tank created and funded by Congress, so it's not a part of the executive branch, they say.

Speaker 6 The board members who are suing, they want to be reinstated. They want to stop the Trump administration's efforts to dismantle the Institute and its operations.

Speaker 6 Now, at this hearing, what they were asking the judge to do was to temporarily block Doge's takeover of USIP, to get Doge out of the Institute and its systems, and to get the board members back in.

Speaker 3 Yeah, and the judge denied that request. So, what was her reasoning?

Speaker 6 Well, U.S. District Judge Beryl Howell said that there was confusion in this complaint itself, in the lawsuit.

Speaker 6 She also pointed out that a temporary restraining order, which is the specific ask that was being made yesterday, is really an extraordinary step.

Speaker 6 There are certain thresholds, legal thresholds, that have to be met for a court to agree to take that step.

Speaker 6 And what Howell said was that a couple of those thresholds just weren't met, including the likelihood of this lawsuit lawsuit to succeed on the merits? So she declined to block Doge's takeover.

Speaker 6 For now, Doge will be allowed to remain in control of the U.S. Institute of Peace for the time being as the court continues to consider this lawsuit.

Speaker 6 But still, Howell made very clear at this hearing that she had very serious concerns about Doge and how it had gone about gaining access to USIP.

Speaker 3 Trevor Burrus, Jr.: Yeah, the Doge staff went into that building with the help of D.C. police.
I mean, is that what the judge was concerned about? Is that what she was talking about?

Speaker 6 Yes, but it wasn't just that. Two FBI agents also made a house call to the head of USIP security over the weekend to question him.

Speaker 6 The lawsuit also alleges that FBI agents threatened a criminal investigation, that the D.C. U.S.
Attorney's Office also threatened a criminal investigation.

Speaker 6 I'll say prosecutors didn't dispute that at yesterday's hearing. And then you also have, as you said, armed D.C.
police officers showing up at USIP and escorting senior staff from the building.

Speaker 6 That includes the head of the Institute, who's a former ambassador who served in multiple administrations, both Democratic and Republican.

Speaker 6 Judge Howell said that she was, quote unquote, here, very offended by how Doge has operated at USIP, by how it treated American citizens, as the judge said, just trying to do their job.

Speaker 6 She said that those actions were probably terrorizing for folks at USIP, and she asked, why act like that? Why was it just because Doge was in a rush?

Speaker 3 Well, there's a lot of tension between the courts and the Trump administration, and this case is a part of that.

Speaker 3 Now, this ruling went the administration's way, but a lot of court rulings in the lawsuits challenging administration policies have not.

Speaker 6 That's right. There are a lot of cases out there right now challenging administration policies.
Some of those cases are expected to end up at the Supreme Court.

Speaker 6 The president and his allies have been lashing out at judges who have ruled against the administration. They've called for judges to be impeached.

Speaker 6 Chief Justice John Roberts issued a rare statement this week pushing back on that. Now, judges always say that they rule on the facts in the law that are before them in a given case.

Speaker 6 And look, I was in court last week when Judge Howell blocked a Trump order targeting a law firm.

Speaker 6 And then yesterday, same judge, Judge Howell, looked at the facts and the law in the USIP case and declined to block Doge's actions at USIP.

Speaker 3 All right, that's NPR justice correspondent Ryan Lucas. Ryan, thanks.

Speaker 6 Thank you.

Speaker 3 Israel has launched a new ground invasion into Gaza.

Speaker 1 That's expanding what it says is a new offensive in the enclave after it broke the nearly two-month-long ceasefire with Hamas.

Speaker 1 On Tuesday, there were a series of airstrikes that killed more than 400 Palestinians and wounded hundreds more.

Speaker 3 We're joined now by NPR's Kat Lonsdorf in Tel Aviv. Kat, so what can you tell us about the ground invasion and what's happening?

Speaker 9 So Israel is calling this a, quote, targeted ground operation into central and southern Gaza. But we've heard that language from the Israeli military before.

Speaker 9 It was used a lot in Gaza before the ceasefire, and that invasion caused widespread devastation and destruction and killed more than 49,000 Palestinians, according to health officials there.

Speaker 9 The Israeli military said its aim with this ground invasion is to expand what it calls the quote security perimeter that separates Gaza from southern Israel.

Speaker 9 Israel has also sent troops back into areas that they had retreated from during the ceasefire, like the Netsarim corridor. That's a large strip of land that divides Gaza's north and south.

Speaker 9 Early on in the war, Israel created that corridor and then closed passage for Palestinians between the north and south for more than a year. Just this morning, it partially closed passage again.

Speaker 3 Now, what have you been hearing from Palestinians living in Gaza and the situation around them?

Speaker 9 Yeah, I mean, people are worried and scared. Many had just started trying to pick up what they could of their lives during that eight weeks of relative calm.

Speaker 9 And they're now shocked to be back in the war with airstrikes and evacuation orders again.

Speaker 9 You know, it's important to remember that Israel has been blocking all aid, including electricity, into Gaza for more than two weeks now, trying to pressure Hamas into accepting a new ceasefire deal on different terms than were agreed to back in January.

Speaker 9 And there are still ongoing Israeli airstrikes. At least 70 people were killed yesterday, according to Gaza civil defense, and more were reported overnight.

Speaker 9 Our producer in Gaza, Anas Baba, spoke to one woman in Gaza City. She's a grandma named Um Saifa Khurra.

Speaker 9 She says her son and his whole family were killed earlier in the war, and now the building she was staying in with three of her grandchildren was damaged in these strikes.

Speaker 9 You can hear the pain and anger in her voice there. She said, this is a calamity.
We can't take it anymore.

Speaker 3 What are Israeli government officials saying?

Speaker 9 Israel Defense Minister Israel Katz put out a video statement yesterday addressing it to Gaza residents. He spoke in Hebrew with Arabic subtitles.

Speaker 9 And he told them that this is their, quote, final warning, saying that all the hostages must be released and Hamas must be removed from power.

Speaker 9 He said, What comes next will be much harsher, and you will bear the full consequences. He went on to say that Israel will act, quote, with force beyond anything you have ever seen.

Speaker 3 Okay, and how did Hamas respond?

Speaker 9 Well, Hamas has not yet responded militarily.

Speaker 9 In a statement on the militant group's telegram last night, it says it holds Israel, quote, fully responsible for the repercussions of this ground invasion.

Speaker 9 And it reiterated its commitment to the ceasefire agreement, making it clear that Palestinians will not leave Gaza voluntarily or otherwise.

Speaker 3 All right, that's NPR's Kat Lonsdorf in Tel Aviv. Kat, thank you very much for your reporting on this.

Speaker 9 Thanks so much.

Speaker 3 And that's Up First for Thursday, March 20th. I'm E.
Martinez.

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