SCOTT SIMON, HOST:
President Trump continued his attacks on the Federal Reserve this week for not lowering interest rates. Then yesterday, the Fed chair, Jerome Powell, said a possible cut might be in the offing. We're joined now by NPR's Ron Elving. Ron, thanks so much for being with us.
RON ELVING, BYLINE: Good to be with you, Scott.
SIMON: Just the hint of that possibility sent up the stock market. Is it potentially good news for the economy?
ELVING: Well, a lot of investors surely think so, or at least they think a lot of other investors will think so, and stock prices will therefore rise. And they certainly spiked yesterday. But it's good to remember that Powell was teasing a possible rate cut because he says he sees potential weakness in the economy. A softer labor market, among other things. He also worried out loud about stubborn inflation and the impact of tariffs. But he does not want his tight money policy to tip the economy into recession. So much depends on what the numbers say in September. If Powell sees the tariffs driving up inflation more than he expected, he could pull back on the rate cut. But if he likes the trends in a month, he can make a modest cut and hint at more to come. A rate cut of any size would be a trophy for Trump and his high-pressure style of governing.
SIMON: Republican lawmakers in Texas have voted to redraw congressional maps to try to boost the party's electoral odds. Democrats in California have retaliated, starting down the same kind of path. Now Missouri, Indiana, other states contemplating the same. Is there a gerrymandering arms race going on?
ELVING: Oh, it's on. Trump is letting the red states know he expects them to report for duty. He wants them to lay claim to some swing district seats in the House that, in a midterm year, like next year, might well vote against the party in the White House. And if it's an arms race, the Republicans are better armed. There are more states where they control the governorship and the legislature. So if it's going to be an all-out war with everybody pushing super-partisan mapping to the max, the likely winners, at least in the short run, would be Republicans.
The losers, once again, are the voters in all the districts where they thought they'd be able to cast a meaningful vote for Congress in a competitive race. It's obviously not good for democracy. It's an abuse of power, but it's been practiced by both parties back to the 1700s. It was greatly enhanced, of course, by modern computing and contemporary data applications. So we see the newest tech serving the oldest of political motives.
SIMON: Ron, the week began with the hopes for peace between Russia and Ukraine. Trump has now set a new two-week deadline. Closer to any kind of agreement, do you think?
ELVING: One hates to say no, after all the effort that's been made, after all the show of unity by the European allies. But it's hard to see what's brought peace any closer this month or might do so in Trump's latest two-week window. Trump dropped his demand for a ceasefire as a precondition for a deal. Putin gave up. Well, Putin gave up what? He has yet to commit even to a meeting with Ukrainian President Zelenskyy. Putin continues to bomb Ukraine's cities and the people who live there. He continues to insist that Ukraine give up land seized by the Russian army and maybe more besides.
And where is Trump in all this? It seems clear that he does want peace to happen for the combatants and for his own legacy. But do the Russians? Trump needs a tool or a tactic to turn Putin around. And unless he's willing to commit U.S. forces, he has to fall back on more economic sanctions. And when he's threatened tougher economic measures of late, he's backed off again. So the present moment has to be very discouraging for Ukraine and its defenders.
SIMON: District of Columbia, the troop deployments going into its third week. The president says he'll ask Congress for more money for upgrades in the city. Says it'll be maxed out in terms of beauty. Is this going to happen in other cities?
ELVING: Well, we're not sure yet it's going to happen in D.C. for starters. But if it does, it will surely tempt Trump to take on the larger constitutional and political problems of taking over cities that are in states that are not as subject to federal orders as D.C. This city is a unique situation. As for maxing out on beauty, perhaps the model here would be the new Oval Office. This may be the ultimate case of beauty being in the eye of the beholder.
SIMON: NPR's Ron Elving. Thanks so much.
ELVING: Thank you, Scott. Transcript provided by NPR, Copyright NPR.
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