Fed Chair Powell sounds alarm on tariffs, sending stocks lower

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(WASHINGTON) -- Federal Reserve Chair Jerome Powell said Wednesday that he expects President Donald Trump's tariffs policy to cause higher inflation and slower economic growth, complicating potential central bank efforts to ease the fallout.

"The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell told the audience at the Economic Club of Chicago.

Powell's remarks immediately sent stocks lower as investors digested the top central banker's concern about the tariffs.

Within minutes, the Dow Jones Industrial Average fell 690 points, or 1.7%, more than tripling losses suffered over the course of the day before Powell's comments. At the close of trading, the Dow dropped 1.7%.

The S&P 500 dropped 2.2% at market close, while the tech-heavy Nasdaq plunged 3%. Both indexes deepened losses suffered earlier in the day.

Stocks had fallen in early trading on Wednesday after chipmaker Nvidia disclosed it was recording a $5.5 billion charge in accordance with a new Trump administration restriction on exports to China.

Wednesday's address marked Powell's first public remarks since Trump last week paused his so-called "reciprocal tariffs" on most countries for 90 days. Stocks soared minutes after Trump's announcement, recovering much of the losses suffered in the aftermath of the "Liberation Day" tariffs start a week earlier. It amounted to one of the most volatile weeks in the history of Wall Street.

"Markets are struggling with a lot of uncertainty and that means volatility," Powell said on Wednesday. Still, he added, the volatility reflected the significance of the policy changes, rather than abnormal behavior in the markets.

"They're functioning just about as you'd expect them to function," Powell said.

At the same time Trump paused some tariffs last week, he also increased tariffs on China, bringing levies on Chinese goods to a cumulative level of 145%. In response, China hiked tariffs on U.S. goods to 125%, escalating a trade war between the world's two largest economies.

Powell said earlier this month that he expected Trump's tariff policy would hike prices and slow economic growth, while noting that key indicators "still show a solid economy."

Policy changes implemented by the White House have contributed to a "highly uncertain outlook," Powell said.

Last month, the Fed opted to hold interest rates steady, even as the central bank said it expected higher inflation and slower economic growth than it had forecast in December. The Fed will announce its next interest-rate decision on May 7.

Powell on Wednesday indicated that the Fed may approach interest rates with restraint as policymakers observe the economic effects of Trump's tariffs.

"The U.S. economy is still in a solid position," Powell said. "For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance."

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Texas developer at center of Paxton’s impeachment sentenced to supervised release, $1 million fine

AUSTIN — A real estate developer, whose relationship with Texas Attorney General Ken Paxton was at the center of the Republican’s historic impeachment trial in 2023 and a recently-ended federal corruption investigation, was sentenced Wednesday to five years’ supervised release and fined $1 million for lying to a financial institution.

Nate Paul, 38, was also ordered by U.S. District Judge David Ezra to serve four months’ home confinement at night, but he is allowed to leave for work and other appointments during the day. Paul had faced up to six months in prison under a previous plea agreement.

Paul’s attorney, Gerry Morris, did not immediately respond to emails requesting comment. A spokesman for the U.S. Attorney’s Office for the Western District of Texas declined comment.

Paul was accused by federal prosecutors of overstating his assets and understating his liabilities while seeking loans in 2017 and 2018.

Paul had claimed that federal investigators acted improperly when they raided his Austin home in 2019. He later sought help from Paxton, and the relationship and dealings between the two men played a prominent role in state lawmakers impeaching Paxton, who was later acquitted in the Senate.

Paxton has long denied wrongdoing and was not mentioned in federal indictments against Paul.

A close ally of President Donald Trump, Paxton is now running for U.S. Senate in the Republican primary against Sen. John Cornyn.

A separate federal criminal investigation of Paxton over his relationship and dealings with Paul was quietly ended by President Joe Biden’s administration in late 2024 with no charges. Paxton has called that investigation a “bogus witch hunt.”

Earlier this month, a state district judge awarded more than $6 million to four former Paxton aides who were fired in retaliation for reporting allegations that he was using his office to accept bribes from Paul.

Bill banning LGBTQ, other advocacy flags in public schools clears Texas Senate

AUSTIN – The Dallas Morning News reports A proposal to ban public school displays of unapproved flags is heading to the Texas House after passing the Senate on Tuesday in a 23-8 vote. Public schools would only be allowed to display a dozen specific flags, including those of the United States, Texas, the armed forces, flags representing colleges and universities, a school’s official flag and flags that are temporarily displayed as part of required class curriculum. The list of approved flags do not include flags representing LGBTQ pride or transgender people. If enacted, schools that violate the bill and fail to report a remedy within a certain timeframe would be subject to a $500 daily fine. Shortly before the vote, Sen. Molly Cook, D-Houston, told her colleagues she would oppose the bill because it targets LGBTQ students and teachers.

“It’s truly devastating to me that this bill fails to distinguish between messages of hate and those of community,” Cook said on the Senate floor. “If pride flags are political, then so are the values of respect and belonging. Our students deserve better than a false neutrality.” In a committee report released earlier this month laying out the bill’s intent, Sen. Donna Campbell, R-New Braunfels, said her proposal addresses concerns over political or ideological classroom displays — such as pride flags, Confederate flags, Blue Lives Matter flags and Black Lives Matter banners — that have led to administrative bans, protests and lawsuits. Campbell cited as an example a North Texas high school where students staged a walkout after administrators removed rainbow “safe space” stickers and pride flags. “Similar incidents across the state illustrate the divisiveness and disruption that competing political symbols can generate in school settings,” Campbell wrote. “S.B. 762 ensures schools prioritize education and shared civic values by establishing a uniform standard that prevents political symbol conflicts, maintaining a neutral learning environment.”

Trump’s tariff fight upsets the ports that bring Texas $700 billion a year in business

HOUSTON – The Houston Chronicle reports leaders of Texas ports and the companies that rely on the ports have spent the past two weeks of tariff upheaval doing what the ship captains do practically every minute of every day: Study the information and keep an eye on the horizon. The one thing they agree on is nobody really knows for sure what the conditions will be for very long at the 23 Texas ports that by many estimates generate more than one-quarter of the state’s gross domestic product. A few predict calm seas. Others see nothing but icebergs. More still cannot even predict what waves and thunderstorms lie ahead. “We’re trying to assess the situation,” Port of Freeport Executive Director Phyllis Saathoff told the crowd at a Greater Houston Port Bureau luncheon on April 10.

Despite the uncertainty of global trade markets as the Trump administration announces American tariff policy, then alters it, and then alters it again, port officials in Freeport and Houston have so far declined to elaborate on what immediate steps they are taking — including the possibility of slowing investment on their own docks or reducing their workforces. Citing the uncertainty and near-daily changes in what tariffs will be in effect and what specific goods will cost, they said it is too soon to either sound an alarm or give the all-clear. “Looking ahead, we will approach our work as we always have,” Port Houston public relations director Lisa Ashley said in a statement. Companies, however, are not waiting to take action, and have been doing so since before tariffs were even discussed, said Tim Sensenig, CEO of TMSfirst, a Spring-based transportation management company whose software helps companies with some 20 million shipments globally each day. Many companies — Sensenig noted the apparel industry — have already changed their patterns to get inventory moved in before tariffs can take effect. Others, such as Apple’s widely reported last-minute flight of Iphones, were temporary measures as they examined the long-term possibilities. “The last thing they want to do is be caught with their pants down with no inventory,” he said of retailers. Other sectors are taking more decisive steps. The impacts of proposed tariffs on auto imports and exports are already leading to layoffs at some automotive factories, as well as declines in the number of cars arriving at Texas ports.

Trump’s AI infrastructure plans could face delays due to Texas Republicans, including Dan Patrick

AUSTIN – The Guardian reports that Donald Trump’s plans to expand infrastructure to produce artificial intelligence in the US could face years of delays with the Republican-controlled Texas statehouse poised to pass legislation that imposes regulatory hurdles on data centers. The Trump administration earlier this year announced that a joint venture called Stargate would construct a total of 20 data centers to provide computing power for AI as part of an effort to help the US compete against China for leadership of the technology and spur investors to pursue AI projects. The companies behind Stargate – OpenAI, SoftBank, Oracle and MGX, an investor backed by the United Arab Emirates, which together have pledged up to $500bn – chose Texas, with its loose regulation and pre-existing energy infrastructure for the first data center.

But the construction of future data centers to support Trump’s AI agenda faces headwinds as a result of the Texas legislation SB6, which introduces new regulatory measures including a six-month review process in addition to the existing 6-18 month evaluation period with the goal of protecting its own power grid in the face of storms. The effects of the proposed bill are two-pronged: the regulatory measures could result in a maximum 24-month approval process, while the requirement to pay additional fees to the Texas grid operator and install backup generators would dramatically raise construction costs. That could lead tech companies to scale back planned construction of data centers in the state, according to equity analysts. Stargate, for instance, has started building its first 10 data centers in Abilene, Texas, but it is unclear if the second set of 10 would be subject to the bill. And if tech companies do not build in Texas, they might not build the data centers at all, directly hampering Trump’s AI initiative. Other states, from Wyoming to Wisconsin to Tennessee, have courted those construction projects, but lack the infrastructure that exists in Texas.

Shots fired at Hideaway Lake

LINDALE – Shots fired at Hideaway LakeSmith County Sheriffs Department was involved in a high-speed chase late Wednesday morning leading to the arrest of a suspect firing guns at Hideaway Lake. According to Smith County Sheriff’s Sgt Larry Christian, the first report came in about 11 AM. It said that the suspect, 45-year-old Mason Lowell Ahrens of Hideway, had been firing gun shots out of a pickup truck towards unidentified buildings at Hideaway. By 11-30, deputies pursued Ahrens on highway 69 south through Lindale. He was arrested near Tyler Pipe south of Interstate 20. No injuries were reported.

Trump administration likely acted in contempt of court by not turning around deportation flights, judge says

Kyle Mazza/Anadolu via Getty Images

(WASHINGTON) -- A federal judge has found probable cause that the Trump administration acted in contempt of court when officials last month defied his order to turn around two planes carrying alleged Venezuelan gang members to El Salvador.

The administration's "willful disobedience of judicial orders" without consequences would make "a solemn mockery" of "the Constitution itself," U.S. District Judge James Boasberg wrote Wednesday.

Boasberg last month ordered that the government turn around two flights carrying more than 200 alleged Tren de Aragua members to El Salvador after the Trump administration invoked the Alien Enemies Act -- a wartime authority used to deport noncitizens with little-to-no due process -- by arguing that the gang is a "hybrid criminal state" that is invading the United States.

Authorities failed to turn the flights around.

Boasberg faulted the Trump administration for conducting a "hurried removal operation" on March 15 and 16 in the hours after he issued an order blocking the deportations and ordering the men returned to the United States.

"As this Opinion will detail, the Court ultimately determines that the Government's actions on that day demonstrate a willful disregard for its Order," he wrote.

Boasberg noted that he gave the Trump administration "ample opportunity to rectify or explain their actions" yet "none of their responses has been satisfactory."

While the Supreme Court ultimately vacated his court order, Judge Boasberg concluded that the Trump administration still defied the order during the three weeks it was in effect, even if the order suffered from a "legal defect."

"The Constitution does not tolerate willful disobedience of judicial orders -- especially by officials of a coordinate branch who have sworn an oath to uphold it. To permit such officials to freely 'annul the judgments of the courts of the United States' would not just 'destroy the rights acquired under those judgments'; it would make 'a solemn mockery' of 'the constitution itself,'" he wrote.

Boasberg gave the Trump Administration a one-week deadline to file "a declaration explaining the steps they have taken and will take to do so."

The way to "purge" the potential finding of contempt, Boasberg said, would be to obey his initial order.

"The most obvious way for Defendants to do so here is by asserting custody of the individuals who were removed in violation of the Court's classwide TRO so that they might avail themselves of their right to challenge their removability through a habeas proceeding," Boasberg wrote, referring to the temporary restraining order he issued.

"Per the terms of the TRO, the Government would not need to release any of those individuals, nor would it need to transport them back to the homeland. The Court will also give Defendants an opportunity to propose other methods of coming into compliance, which the Court will evaluate."

If the Trump Administration does not wish to purge Boasberg's contempt finding, the judge said he will "proceed to identify the individual(s) responsible for the contumacious conduct by determining whose "specific act or omission" caused the noncompliance."

Boasberg said he will begin by requiring declarations from the government, and if those prove to be unsatisfactory, he will "proceed either to hearings with live witness testimony under oath or to depositions conducted by Plaintiffs."

As a final potential step, Boasberg raised the remarkable prospect he could appoint an independent attorney to prosecute the government for its contempt.

"The next step would be for the Court, pursuant to the Federal Rules of Criminal Procedure, to "request that the contempt be prosecuted by an attorney for the government," Boasberg said. "If the Government "declines" or "the interest of justice requires," the Court will "appoint another attorney to prosecute the contempt."

This is a developing story. Please check back for updates.

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David Hogg-run group announces $20M initiative to support primary challengers to House Democrats

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(WASHINGTON) -- Leaders We Deserve, a political organization led by Marjory Stoneman Douglas High School shooting survivor and Democratic National Committee Vice Chairman David Hogg, announced Wednesday that it will spend $20 million to help elect younger leaders -- including primary challengers to House Democrats who are in safely Democratic seats.

"The first most important thing here is to understand it isn't necessarily just out with the old and in with the new. I would say it's out with the ineffective and in with the effective. That is what we are doing here," Hogg, 25, told ABC News' Jay O'Brien Wednesday afternoon. "Any person that has eyes can see that we are 27% approval with our base and we need dramatic change."

The move puts Hogg, a member of party leadership as one of its vice chairs, at odds with the party establishment and other Democratic leaders, who usually shy away from supporting challengers to Democratic incumbents.

But it comes as Democratic-aligned voters express discontent with how the Democratic Party is responding to the second Trump administration -- and as some within the party call for a new generation of leadership and representation in Congress amid consternation with some older House and Senate Democrats.

"While [President Donald] Trump creates new existential crises every day, too many elected leaders in the Democratic Party are either unwilling or unable to meet the moment," he added in an earlier statement.

"We need a stronger Democratic Party that is ready to fight back," he added. "Part of making that a reality is replacing ineffective, asleep-at-the-wheel members with Democrats who have the energy, passion, and vision to meet this moment with the urgency our country deserves."

A few Democrats have already announced they will challenge longtime House members in the 2026 congressional primaries. Researcher and social media personality Kat Abughazaleh has announced she is mounting a primary challenge to 14-term Rep. Jan Schakowsky, D-Ill. Schakowsky has not said whether she will run for reelection.

"This cycle, we're focused on House seats in particular. Those are the types of seats that we are focused on because we want to be as effective as possible in helping to give these young people a chance," Hogg told ABC News.

The announcement from Leaders We Deserve, a group Hogg co-founded in 2023 and of which he serves as president, did not name any specific candidates the group plans to support. The group said it will not challenge "front-line" members facing tough reelection battles against Republicans or "older Democratic leaders like Congresswoman Nancy Pelosi" who it said have been taking on Trump and Republicans successfully.

The announcement was first reported by the New York Times.

In a statement to ABC News, Democratic National Committee Chairman Ken Martin thanked Hogg for his work for the party but reiterated the DNC's position of not taking sides in primary elections.

"David Hogg is a passionate advocate and we are grateful for his service to the Democratic Party, whether it be in his role as a DNC Vice Chair or in an outside capacity," Martin wrote. "In order to ensure we are as effective as possible at electing Democrats to office, it is the DNC's longstanding position that primary voters -- not the national party -- determine their Democratic candidates for the general election."

According to the DNC, the party does not intervene in primaries both to allow voters to express their views and to maintain relationships with candidates. The DNC also shared that Hogg was the only party officer not to sign a "neutrality policy" that mandates those officials do not take any actions that may throw their or the party's impartiality into question.

The party said it will be figuring out unspecified next steps with Hogg and party committees.

Hogg was elected as one of the DNC's vice chairs in the party's February elections.

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US missionary kidnapped in South Africa rescued in ‘high-intensity shootout’: Police

Courtesy of Fellowship Baptist Church

)LONDON and PRETORIA) -- An American missionary allegedly kidnapped at gunpoint during a church service in South Africa last Thursday has been rescued in "a high-intensity shootout" between police and his suspected captors, authorities said on Wednesday.

Three unidentified suspects were killed during Tuesday's rescue operation, which was led by the South African Police Service's elite Hawks unit, according to a statement from police spokesman Lt. Col. Avele Fumba.

While police have not yet named the rescued American, the Tennessee church with which he is affiliated has identified him as Josh Sullivan.

"Josh has been released. I just got 'the go ahead to let it be known," Tom Hatley, pastor of Fellowship Baptist Church in Maryville, Tennessee, said in a Facebook post early Wednesday. "Thank you for your support and prayers. Please do not stop praying for The Sullivans. Praise The Lord Jesus Christ!"

Investigators discovered that the abducted U.S. citizen, believed to be a pastor at a church in the South African port city of Gqeberha, was being held at a safe house there, Fumba said. As officers approached the house on Tuesday, suspects inside a vehicle opened fire and attempted to flee the scene, Fumba said, "leading to a high-intensity shootout in which three unidentified suspects were fatally wounded."

"The victim was found inside the same vehicle from which the suspects had launched their attack," Fumba added. "Miraculously unharmed, he was immediately assessed by medical personnel and is currently in an excellent condition."

The investigation remains ongoing, according to Fumba.

Sullivan's mother, Tonya Rinker of Maryville, Tennessee, previously confirmed that her son had been abducted.

"As a mother, you never think about something like this happening to your child, but faith carries you through the uncertainty," Rinker told ABC News in a statement last week. "Joshua's humor and wit are a blessing; he’s always ready with a joke, and forever seeking to make people laugh."

Rinker described her son as "an exceptional father, husband, and son, embodying kindness, strength and generosity. He has a servant's heart, a kind, compassionate spirit and is filled with selflessness. He has a burden for lost souls and has devoted his life to serving God in South Africa."

Sullivan was reportedly abducted by armed men who burst into a church in Motherwell, a township near Gqeberha in the Eastern Cape province of South Africa, the Fellowship Baptist Church in Maryville said on its Facebook page last week.

The incident unfolded at about 7 p.m. local time on Thursday when the pastor of the church "was allegedly confronted by at least four unknown armed suspects during a church service," Fumba told ABC News in a statement.

Witnesses told investigators that the suspects forced the minister into his own vehicle and then fled, Fumba said.

According to a biography on what appears to be Sullivan's website, he describes himself as a “church-planting missionary to the country of South Africa,” who arrived there in November 2018 with his wife, Meagan, and their children to run Fellowship Baptist's Motherwell church there.

Sullivan has been on the staff at Fellowship Baptist Church in Maryville since 2012, according to his website.

ABC News' Kevin Shalvey and Bill Hutchinson contributed to this report.

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Schumer moves to block Trump nominees for 2 key New York prosecutor positions

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(WASHINGTON) -- Majority Leader Chuck Schumer announced Wednesday that he'll use a Senate procedure that allows home state senators to object to judicial nominees to attempt to block President Donald Trump's picks for two keep prosecutor positions: the U.S. Attorneys for the Southern and Eastern Districts of New York.

The blue slip process, which has long been honored by the Senate Judiciary Committee, asks for the signoff of home-state senators before proceeding with nominations for U.S. Attorney positions.

Schumer, a New York Democrat, is refusing to return his blue slip for the nominations of Jay Clayton to be the U.S. attorney for the Southern District of New York and Joseph Nocella Jr. to be the lead prosecutor in the Eastern District of New York.

“Donald Trump has made clear he has no fidelity to the law and intends to use the Justice Department, the U.S. Attorney offices and law enforcement as weapons to go after his perceived enemies," Schumer said in a statement. "Such blatant and depraved political motivations are deeply corrosive to the rule of law and leaves me deeply skeptical of the Donald Trump’s intentions for these important positions. For that reason, I will not return the blue slip for the U.S. Attorney nominees for the Southern and Eastern Districts of New York.”

This blue slip tradition in the Senate is just that: a tradition, not a law.

It will be up to Judiciary Committee Chairman Chuck Grassley whether he ultimately honors this blue slip process in this case.

"The Judiciary Committee has long honored the traditional blue slip process for U.S. Attorney nominees," a spokesperson for Grassley, an Iowa Republican, told ABC News when reached for comment on Schumer's intention not to return his blue slip on the two New York U.S. attorneys.

Grassley recently told the New York Times he would honor the right of Senators to refuse return of their blue slips.

“The answer is yes,” Grassley said when asked whether he would honor the blue slip position of senators. “If they are from the state the nomination comes from."

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East Texan appointed to Municipal Water Authority Board

East Texan appointed to Municipal Water Authority BoardAUSTIN – According to our news partner, KETK, Governor Greg Abbott has appointed a new member, Jay Herrington of Palestine, to the Upper Neches River Municipal Water Authority Board of Directors.

The Board’s purpose is to develop resources that help conserve water in the Upper Neches River basin in Anderson, Henderson, Smith and Cherokee counties.

Herrington is well educated in actuarial resources and science. He earned a Bachelor of Business Administration in Actuarial Science from the University of Texas at Austin and a Master’s in Actuarial Science from the University of Michigan Ross School of Business. Before retiring from the financial industry after 34 years, Herrington was a fellow of the Society of Actuaries and a member of the American Academy of Actuaries.

Jay Herrington’s term as a UNRMWA director will expire on Feb. 1, 2029.

Secretary of Treasury faces lawsuit from an ETX company

Secretary of Treasury faces lawsuit from an ETX companyTYLER – Our news partner, KETK, reports that a lawsuit has been filed by the East Texas Title Company in an attempt to block a rule requiring intrusive data collection and reporting for cash real estate purchases.

The lawsuit was filed against the Financial Crimes Enforcement Network (FinCEN), which is operating under the supervision of U.S. Secretary of Treasury Scott Bessent. In 2024, the network finalized a rule that would require companies to report information about non-financial real estate transactions, including personal information from everyone involved in the sale. The rule is currently set to go into effect in Dec. 2025.

Luke Wake, an attorney at the Pacific Legal Foundation representing East Texas Title Company, spoke about how they believe FinCen is unethically collecting personal information from citizens. Continue reading Secretary of Treasury faces lawsuit from an ETX company

Senator Cornyn must ‘activate the silent majority’ to compete against Paxton

Senator Cornyn must ‘activate the silent majority’ to compete against PaxtonTYLER – According to our news partner, KETK, Smith County Republican Party Chairman David Stein is responds after Texas Attorney General Ken Paxton announced his intention to challenge U.S. Sen. John Cornyn in the 2026 Republican primary.

“It was expected,” Stein said. “The people were encouraging him, and I think he’d been thinking about it for quite some time.”

According to Stein, Paxton’s decision ultimately stems from political momentum and strategic confidence. “Paxton has both statewide and national appeal,” he said. “It makes him a very formidable candidate.”

Paxton enters the race with an early advantage, according to a recent poll from Texas Public Opinion Research, which shows him holding an 11-point lead over Cornyn in a hypothetical Republican primary. Stein also addressed the path forward for Cornyn, emphasizing the importance of energizing the base across the state. Continue reading Senator Cornyn must ‘activate the silent majority’ to compete against Paxton