Washington, DC

1. Trump extends ceasefire
2. Senate GOP releases budget
3. Warsh’s AI case for cuts
4. Cherfilus-McCormick fallout
5. Consumers keep spending

S&P 500 ▼ 0.6% after Vance scraps Pakistan trip, erasing a run-up that would’ve put the index on pace for a record.

Trump announces open-ended ceasefire extension

President Donald Trump announced an open-ended extension of the US-Iran ceasefire agreement, which was set to expire tomorrow, capping a day of uncertainty around the future of negotiations. A second round of peace talks was supposed to begin tomorrow in Islamabad, but Vice President JD Vance didn’t leave Washington. Officials told The New York Times the meeting was paused because Iran hadn’t responded to US negotiating positions. Before Trump’s announcement, his administration piled on more pressure: The Treasury Department announced new sanctions on Iranian entities this afternoon and the US military boarded a sanctioned oil tanker in Asia. Tehran, meanwhile, escalated its rhetoric, with one official deeming the US blockade an act of war. The extension is the latest evidence of Trump’s oscillation on the war: A day earlier, he predicted such a move would be “highly unlikely.”

Republicans release budget, hope to end shutdown

Senate Republicans released their budget and began voting on it this afternoon. They will use it to set up an immigration enforcement budget reconciliation bill of roughly $75 billion. Senators hope that movement will prompt the House to pass the Senate bill funding the rest of the Department of Homeland Security, ending the two-month DHS shutdown. Appropriators have been informed the Trump administration will be unable to pay workers in May. “They won’t have the money, the House has to pass the Senate bill,” Sen. Patty Murray, D-Wash., told Semafor. House Speaker Mike Johnson said the “sequencing is important” to the House. Sen. Ron Johnson, R-Wis., told Semafor he made a “strong recommendation” to House GOP leadership and the White House to attach the “Shutdown Fairness Act,” which pays government workers during a shutdown, to the DHS funding bill.

— Burgess Everett and Nicholas Wu

Senators question Warsh’s case for rate cuts

Senators of both parties joined economists today in expressing skepticism of Federal Reserve nominee Kevin Warsh’s argument that an AI boom could clear the way for interest rate cuts. “Here’s my worry: that a lot of this stuff about artificial intelligence making us more productive is a bunch of hype by people who want to sell stock,” Sen. John Kennedy, R-La., said at Warsh’s confirmation hearing. “I’d be careful there.” Sen. Chris Van Hollen, D-Md., went further: “I find it just implausible.” Warsh defended his reasoning, arguing the boost to “the supply side of the economy” may be “considerably bigger” than the “effect on demand.” Warsh’s confirmation is stalled in committee for now, with Sen. Thom Tillis, R-N.C., refusing to vote on Warsh until the Justice Department scraps its investigation into current Fed Chair Jerome Powell.

— Eleanor Mueller

House Democrat’s resignation could pause ethics clashes

Florida Democrat Sheila Cherfilus-McCormick resigned from Congress today, hours before an expected House Ethics Committee announcement that would have likely teed up her expulsion by both parties. The panel was preparing a recommended punishment for alleged transgressions that include the theft of $5 million in FEMA funds to help her congressional campaign. Enough Democrats were likely to join Republicans to support expelling her, which requires a two-thirds majority of the House. “After careful reflection and prayer, I have concluded that it is in the best interest of my constituents and the institution that I step aside at this time,” Cherfilus-McCormick wrote to colleagues. Democrats might now hold back on their efforts to expel Rep. Cory Mills, R-Fla., who faces his own ethics probe; Minority Leader Hakeem Jeffries previously told reporters he supported waiting on the panel “to report out what’s going on.”

— Nicholas Wu

Gas prices drive up retail spending

Americans spent more in March than expected, but not because of surging demand. The culprit: gas prices. US retail sales rose 1.7% in March, the biggest monthly gain in a year, according to new data from the Commerce Department. Tax refunds gave households an extra cash buffer and overall consumer spending was solid, with growth in some areas. Economists used the data to estimate higher economic growth for the first three months of the year; more government data due next week will unpack that further. The question remains whether gas prices will remain high enough, and for long enough, to drive up inflation and cause consumers to pull back. So far, the fear held by financiers that there’s trouble ahead is taking longer than they expected to filter through to the real economy, writes Semafor’s Liz Hoffman.

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White House

• The Pentagon will no longer require enlisted service members to get an annual flu vaccine.
• Two US officials killed in a car accident in Mexico worked for the Central Intelligence Agency, which has significantly expanded its role in battling narcotics trafficking. — WaPo

Iran War

• President Trump said the US will consider giving the United Arab Emirates financial support as it struggles with the economic fallout of the Iran war.
• White House aides say Trump’s public comments about negotiations with Iran have been detrimental to talks. — CNN
• Chinese leader Xi Jinping called for the Strait of Hormuz to remain open, a signal to Tehran to avoid further escalation.

World

• China’s cyber capabilities are now as sophisticated as those of the US, and Beijing is targeting Western defense industries, according to a Dutch military report. — WSJ
• The Israeli military said four soldiers involved in damaging a statue of Jesus in Lebanon will be removed from active duty and jailed for 30 days.

Courts

• Florida’s attorney general has opened a criminal investigation into OpenAI after reviewing how an alleged mass shooter at Florida State University interacted with ChatGPT.
• New York’s attorney general sued Coinbase and Gemini Titan today, claiming their prediction markets violate state gambling laws. — CNBC

— President Donald Trump on CNBC’s Squawk Box talking about a potential merger between American and United Airlines.

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Graph Massara and Lauren Morganbesser, copy editors

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel