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(WASHINGTON) -- The Senate voted Wednesday to confirm Federal Reserve chair nominee Kevin Warsh, clearing the way for Warsh to replace central bank head Jerome Powell when his term ends later this week.

The Senate confirmed Warsh by a vote of 54 to 45. Sen. John Fetterman, D-Pa., was the lone Democrat to vote in favor of Warsh.

The vote comes weeks after the Department of Justice moved to drop its criminal probe into Powell. Before that, Warsh had faced a bipartisan stonewall in the Senate Banking Committee over the investigation.

The probe into Powell focused on alleged false testimony to Congress about an office renovation. Powell, whose term ends on Friday, called the investigation a politically motivated effort to influence interest-rate policy.

Last month, Washington U.S. Attorney Jeaninne Pirro said the investigation into the office renovation would be taken up by the Fed’s inspector general.

Sen. Thom Tillis, R-N.C., who previously vowed to oppose Warsh's nomination on account of the investigation, said he would flip his vote after the investigation was set aside. Tillis greenlit the nomination in a committee vote last month, helping advance Warsh to a confirmation vote on the full Senate floor.

Powell said last month that he would stay on at the central bank's board of governors after his term expires next month as the investigation into the central bank's office renovation continues.

"I've said I won't leave the board until this investigation is well and truly over with transparency and finality, and I stand by it," Powell said at a press conference in Washington, D.C.

"My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors," Powell added.

Trump previously denied any involvement in the criminal investigation.

Powell could remain on the Fed's 12-member policymaking board until 2028, retaining a role in the central bank's interest-rate policy over that period.

Warsh, a former Fed official, will serve a 4-year term as chair. He is currently a fellow at the Hoover Institution conservative think tank, which is based at Stanford University.

During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.

In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.

Warsh is set to take the helm of the Fed in a challenging period for central bank policymakers.

Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. Annual inflation jumped to its highest level in three years, according to the U.S. Bureau of Labor Statistics.

The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.

Markets forecast a roughly 60% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool. The odds of an interest-rate hike by the end of the year stand at about 30%.

Copyright © 2026, ABC Audio. All rights reserved.

(NEW YORK) -- Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. The inflation report matched economists' expectations.

Prices rose 3.8% in April compared to a year earlier, marking an increase from a year-over-year inflation rate of 3.3% in the prior month. Annual inflation jumped to its highest level in three years, U.S. Bureau of Labor Statistics (BLS) data showed.

"I don't think about Americans' financial situation," President Donald Trump told reporters Tuesday as he was departing for a high-stakes trip to China, when asked to what extent Americans' financial situations were motivating him to make a deal with Iran.

"The most important thing, by far, is Iran cannot have a nuclear weapon," the president further said, adding, "Every American understands."

As recently as February, inflation stood at 2.4%, clocking in just a tick above the Federal Reserve’s target level of 2%.

The jump in prices last month owed in large part to a sharp rise in costs for products impacted by a global oil shock. Gasoline prices were 5% higher in April than March, the BLS report said. Airline fares climbed 2.8% from the previous month.

The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff prompted one of the largest oil shocks ever recorded.

The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.

Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration.

The price of an average gallon of gas stood at $4.50 as of Monday, AAA data showed – an increase of $1.52 per gallon since the war began on Feb. 28. That amounts to a roughly 50% price jump in about two-and-a-half months.

The surge in fuel prices sent costs surging for gas-dependent transportation, such as airline tickets. In March, airfare costs jumped more than 3% from a month earlier.

Within weeks, the jump in prices could spread to groceries, furniture and just about any other item delivered by diesel-fueled trucks and tankers, some analysts previously told ABC News.

The recent rise in prices has left many consumers feeling glum. In May, consumer sentiment fell to the lowest level ever recorded, according to a monthly survey conducted by the University of Michigan since 1978.

Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shoppers remain pessimistic. In theory, a slowdown of spending could slow the economy.

By some measures, however, the U.S. economy has proven resilient amid the war.

Hiring slowed in April but remained solid, exceeding economists’ expectations, federal government data last week showed. The unemployment rate held steady at 4.3% in April, a low level by historic standards. Additionally, the economy grew at an annualized rate of 2% in the first quarter of 2026, marking an acceleration from 0.5% growth recorded in the previous quarter.

However, a persistent increase in consumer prices may put pressure on the Fed to raise interest rates as a means of dialing back inflation.

The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.

Markets forecast a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.

ABC News' Karen Travers, Emily Chang and Fritz Farrow contributed to this report.

Copyright © 2026, ABC Audio. All rights reserved.

(LOS ANGELES) -- A Chevron gas station in Los Angeles elicited headlines in recent weeks for charging an eye-popping $8.71 a gallon, becoming an emblem for the spike in fuel costs set off by the Iran war.

Sky-high gas prices nationwide owe primarily to a historic oil shock that followed Iran’s effective closure of the Strait of Hormuz. But a lesser-known contributor helps account for just how high prices have gotten, at least at some name-brand stations selling fuel from the likes of Chevron, Shell and ExxonMobil.

Branded stations, which make up almost half of gas stations nationwide, charge about 6 cents more per gallon on average than their unbranded counterparts, according to data from the Oil Price Information Service (OPIS), a Dow Jones company, for the week ending on May 2. That price gap marks little change from where it stood before the war, OPIS data showed.

In at least one state, the price disparity runs significantly higher. Gas at a Chevron station in California costs an average of 48 cents more per gallon than the price at an unbranded station, the California Energy Commission (CEC) found in 2024. After Chevron, the most expensive average gas prices in California were found at Shell, 76 and Arco-branded stations, the CEC said.

Some analysts said the higher price of branded gas is due to additional costs, such as proprietary additives in the fuel, as well as a producer’s marketing budget and the payment forked over by stations for guaranteed access to its gas – costs that are passed on to consumers.

Other analysts and a California state watchdog, however, have said that the price disparity may stem from the market dominance of a handful of companies, allowing them to drive up the retail price.

The scrutiny comes as some large oil companies like British Petroleum, Valero and Marathon Petroleum report soaring profits amid the Iran war, though Chevron and Exxon saw profits decline due in part to one-time paper losses stemming from financial hedges meant to protect them against a possible price drop.

The price of an average gallon of gas currently stands at $4.52, an increase of $1.54 per gallon since the war began on Feb. 28, AAA data showed. That amounts to a nearly 52% jump in about two-and-a-half months.

Patrick Penfield, a professor of supply chain practice at Syracuse University, said the recent surge in prices could prompt a reexamination of the costs baked into the price at the pump, including the added charge for branded gas.

“When you see such big price increases for gasoline, everything should be looked at,” Penfield said.

Chevron did not directly respond to an ABC News request for comment. However, Jim Stanley, director of media relations at the Western States Petroleum Association, a industry trade group, contacted ABC News at Chevron's request.

Drivers choose branded gas stations as a matter of customer preference centered on issues like lighting, bathroom cleanliness or location, Stanley said.

"Any branded product – whether it’s medication or groceries or clothing – is going to generally cost more than a generic alternative," he added.

Stanley further said roughly 95% of branded gas stations operate as franchises, meaning they enter into agreements with big-name companies but retain self-ownership.

"Branded gas stations can have these brand standards that they hold their franchisees to: a higher standard than an independently owned store," Stanley added.

Kelly Davila, a spokesperson for Exxon, said the company doesn't "own or operate our retail stations."

Shell declined to respond to ABC News' request for comment.

Phillips 66, the parent company of 76, did not respond to ABC News' request for comment. Neither did Marathon Petroleum, the parent company of Arco.

Branded gas stations account for about 45% of stations nationwide, selling gas under the name of a major fuel company, OPIS data shows. Each of the brands touts a unique blend of additives that it says improves the gasoline and eases its effect on car engines. The extra ingredients go beyond the minimum standards mandated by federal and some state regulators, Denton Cinquegrana, chief oil analyst at Dow Jones Energy, told ABC News.

“At the end of the day, all gasoline has to meet a federal standard,” Cinquegrana said. “The branded gasoline goes above and beyond that minimum requirement.”

Higher prices charged by name-brand stations – a dynamic that stretches back decades – can be traced in part to spending on the development and production of the additives, Cinquegrana added: "They’re trying to recoup some of that investment.”

Some analysts, however, said it remains unclear whether the added ingredients deliver a meaningfully improved product.

“Regardless of each company’s claim, there is not sound evidence supporting the fact that additives do indeed improve the quality of gasoline, at least to the extent that the consumers perceive it to,” a study issued by the non-profit RAND corporation found in 2010.

The California Division of Petroleum Market Oversight (DPMO), a state watchdog agency, last year said it was "unable to independently verify claims that branded gasoline is superior to unbranded gasoline."

When asked about studies disputing the value of additives, Stanley, of the Western States Petroleum Association, declined to comment.

The higher price of branded gas also owes to marketing budgets borne by the big-name companies as well as elevated costs paid by retailers as part of agreements with the brands that guarantee them priority access in the event of a supply shortage, the U.S. Government Accountability Office said in a study of the issue published in 2005.

“Gas stations pay more for a contract for branded gasoline because they have a guarantee of supply. And they have a major global brand backing them up,” Cinquegrana said.

Some analysts and a California watchdog disputed those explanations. Rather, they said, the higher prices may reflect market power enjoyed by the large firms, giving them leeway to raise prices without fear of competition.

“My own reading of the data is that the branded companies are able to take advantage of a lack of a competitive market and are acting almost like an oligopoly,” Paasha Mahdavi, a professor of energy governance and political economy at the University of California, Santa Barbara, told ABC News, using a term that describes an industry dominated by a small number of companies.

Mahdavi focused on the relatively large price gap in California between branded and unbranded gas, which has widened in recent years.

In 2019, branded gas from companies like ExxonMobil, Arco, Valero and Chevron cost an average of 20 cents more per gallon in California; within five years, that price disparity had climbed to 31 cents, according to a DPMO study issued last year. Over that same period, the profitability of oil refiners in California has increased, DPMO said.

The rise in refinery profitability may be traced to the “exercise of market power by gasoline suppliers,” DPMO added, saying 90% of in-state refining capacity is controlled by four companies. As a result, elevated wholesale prices could be passed along the supply chain, DPMO said.

The largest companies appear to have “pretty strong control of not only upstream assets like oil and gas, but also control of the gas stations that are preferred by consumers based on location,” Mahdavi said. “They’re able to charge a higher premium.”

Valero did not respond to ABC News' request for comment.

Stanley, of the Western States Petroleum Association, said he is unsure why California features a larger gap in price between branded and unbranded gas than other states. One contributor, he said, could be the relatively low density of gas stations in the state.

"Competition brings down costs. When a retailer doesn't see that same level of competition, you can see that reflected in higher prices."

Stanley faulted environmental regulations in California for high overall gas prices.

"Branded or unbranded, gas in California is the most expensive in the country. That's because of supply constraints that have been created by state policies."

Mahdavi further said that the locations of branded gas stations may carry additional costs due to higher rents, accounting for some of the price gap.

The rise in prices during the Iran war offers an opportunity to revisit the factors that contribute to the price at the pump, according to Mahdavi.

“We can shine more light on what is driving these higher prices," he said.

Copyright © 2026, ABC Audio. All rights reserved.

(WASHINGTON) -- PayPal has agreed to waive $30 million in processing fees in order to resolve a federal investigation into an investment program that sought to boost Black and minority-owned businesses, the Justice Department announced Tuesday.

The probe is just one of a number launched under the Trump Justice Department scrutinizing companies that launched diversity, equity and inclusion (DEI) initiatives that Republicans have cast as unlawful and discriminatory.

DOJ had been probing whether PayPal's program, which was launched in 2020 following the killing of George Floyd amid social unrest around the country, violated a federal law prohibiting creditors from discriminating against applicants based on race.

In order to avoid further investigation, the company has agreed to waive processing fees for roughly $1 billion in transactions — estimated at $30 million -- "for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology."

The announcement by DOJ does not explain why PayPal's transaction fee waivers will be directed to those specific classes of small businesses.

It has also agreed to launch a new small business initiative that does not account for "the race or national origin of the business owners."

“This Department of Justice is delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America,” Acting Attorney General Todd Blanche said in a statement announcing the settlement. “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”

The settlement does not include any admission of wrongdoing by PayPal, and under the agreement, the DOJ acknowledges it "has not made any determinations or findings regarding PayPal violating [the Equal Credit Opportunity Act] or any other federal law related to the economic opportunity fund."

“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools," a PayPal spokesperson said in a statement to ABC News. "We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”

Copyright © 2026, ABC Audio. All rights reserved.

(NEW YORK) -- An inflation report on Tuesday will provide a fresh gauge of prices as the Iran war ratchets up costs for gasoline, airfares and other expenses.

Economists expect consumer prices to have risen 3.8% in April, when a surge in gasoline costs took hold weeks into the war, which would mark a significant acceleration from 3.3% in the previous month.

As recently as February, inflation stood at 2.4%, clocking in just a tick above the Federal Reserve’s target level of 2%.

The Middle East conflict prompted the Iranian closure of the Strait of Hormuz in March, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff prompted one of the largest oil shocks ever recorded.

The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.

Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration.

The price of an average gallon of gas stood at $4.52 as of Monday, AAA data showed – an increase of $1.54 per gallon since the war began on Feb. 28. That amounts to a nearly 52% price jump in about two-and-a-half months.

The surge in fuel prices sent costs surging for gas-dependent transportation, such as airline tickets. In March, airfare costs jumped more than 3% from a month earlier.

Within weeks, the jump in prices could spread to groceries, furniture and just about any other item delivered by diesel-fueled trucks and tankers, some analysts previously told ABC News.

The recent rise in prices has left many consumers feeling glum. In May, consumer sentiment fell to the lowest level ever recorded, according to a monthly survey conducted by the University of Michigan since 1978.

Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shoppers remain pessimistic. In theory, a slowdown of spending could slow the economy.

By some measures, however, the U.S. economy has proven resilient amid the war.

Hiring slowed in April but remained solid, exceeding economists’ expectations, federal government data last week showed. The unemployment rate held steady at 4.3% in April, a low level by historic standards. Additionally, the economy grew at an annualized rate of 2% in the first quarter of 2026, marking an acceleration from 0.5% growth recorded in the previous quarter.

However, a persistent increase in consumer prices may put pressure on the Fed to raise interest rates as a means of dialing back inflation.

The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.

Markets forecast a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.

Copyright © 2026, ABC Audio. All rights reserved.