Washington, DC

1. Warsh sides with markets
2. AI safety momentum
3. Record incumbent wipeout
4. Kiley’s House future
5. Somaliland’s US play

House Speaker Mike Johnson canceled tomorrow’s votes, sending the House home 48 days before the midterm elections and avoiding a vote on articles of impeachment filed against Defense Secretary Pete Hegseth.

Warsh breaks from Trump to raise rates

Federal Reserve Chair Kevin Warsh this afternoon sided with markets over President Donald Trump, voting with all other members to hike interest rates by 0.25%. “The committee’s unanimous vote shows our resolve to achieve price stability on a timelier basis,” Warsh told reporters after. “I said in Jackson Hole, ‘trends matter,’” he said later. “My judgment [then] was the inflation summer trends weren’t passing the test; I’ve seen very little information since that would make me reverse that decision, so I’ve stuck with it.” Investors took the announcement in stride — but it’s unclear whether Trump will, too. National Economic Council Director Kevin Hassett said Tuesday the White House would “respect the process … whatever [Warsh] does.” Yet the hike’s proximity to the midterms is already bringing heat from Trump allies. “The Fed’s never done that before, so it’s not great,” Sen. Bernie Moreno, R-Ohio, told Semafor. “I’m disappointed.”

Bipartisan AI safety talks accelerate

The Senate’s bipartisan AI safety bill is showing some signs of life, Semafor’s Burgess Everett and Ashley Gold report. Key lawmakers said they may even be able to get to a vote in the Senate Commerce Committee before leaving Washington before the midterm elections. “I would love to mark it up this month, if we can get bipartisan agreement,” Senate Commerce Committee Chair Ted Cruz, R-Texas, told Semafor, citing “meaningful progress.” Senate Majority Leader John Thune, who is directly involved in the efforts, was more circumspect, saying it “remains to be seen” whether the proposal would ultimately get a committee vote. And one person familiar with the discussions told Semafor the remaining sticking points include internal Senate politics, dynamics with the White House, and garnering support from the AI safety community — all big factors that could individually sink the effort.

Incumbent defeats this year have outpaced the Tea Party wave

Primary season is officially over, with seven incumbent House Democrats and four incumbent House Republicans losing — making 2026 the year with the highest number of primary defeats this century, easily outpacing the Tea Party wave of 2010. Mid-decade redistricting played a direct role in two losses and a supporting role in three others. Texas Democratic Reps. Al Green and Julie Johnson lost after Republicans redrew their maps. Tennessee’s Trump-ordered redistricting gave new territory to Rep. Andy Ogles, making him more vulnerable to a challenge — a situation that green energy investors took advantage of by funding his opponent. In Florida, GOP Rep. Cory Mills pushed off calls for his resignation over a myriad of ethics problems, only to lose his new seat. The cycle’s six other losers competed in their current districts and were swept out.

— David Weigel

Kiley won’t caucus with GOP

Rep. Kevin Kiley, I-Calif., said today he does not plan to caucus with Republicans next year if he is reelected to the House as an independent. In an interview with Semafor’s Nicholas Wu at the Youth Wellbeing Forum, Kiley said he is working to change House rules that require independent members to affiliate with a party in order to sit on committees. He currently caucuses with Republicans for committee purposes. “I’m an independent member now, and yet the rules of the House force me to say, OK, as a formality, for the purposes of committee assignments, I’m in conference with one side or the other,” Kiley said. “The committee seats should belong to the American people, and you shouldn’t be denied a seat on committees just because you’re an independent member.”

Somaliland’s president tailors pitch to Trump

Somaliland’s president is putting almost everything on the table in his campaign to win US recognition for the breakaway territory of Somalia, offering US investors access to a strategically located port and mineral resources while leaving open the possibility of expanded military access. “We are not giving anything for free,” Abdirahman Mohamed Abdullahi, known as “Irro,” said in an interview with Semafor’s Yinka Adegoke. “We have to offer something. And we expect the other partner [to have] the same or equal opportunities.” Israel’s recognition in December changed the diplomatic equation on Somaliland’s status. It gave the breakaway territory its first recognition from a UN member state and, more importantly, demonstrated that the decades-old consensus against recognizing the territory could be broken. The US is the next prize — what Irro described as the “big fish.”

White House

• President Trump’s former AI adviser David Sacks dismissed the current worries over AI risks expressed by lawmakers and some industry executives as “fearmongering,” arguing that regulations that address the technology are already in place. — Politico
• White House chief of staff Susie Wiles announced she is cancer-free.

Congress

• Sen. Katie Britt, R-Ala., privately sought tariff exemptions for her home state while publicly endorsing the president’s policies. — WSJ
• House Minority Whip Katherine Clark, D-Mass., said only “team players” should be able to sit on exclusive committees like House Appropriations, after two House Democrats broke ranks yesterday to back a GOP procedural vote.

Courts

• Rep. Joyce Beatty, D-Ohio, filed a motion for an emergency hearing on a vote by the board of the Kennedy Center to shutter the venue. — WaPo

National Security

• Iran’s attacks are growing increasingly complex and forcing the US to burn through interceptors. — WSJ

Campaigns

• Family members of a woman who died in Texas after they said she was denied an abortion are suing Attorney General Ken Paxton, who is running for Senate.

Energy

• Americans have spent $100 billion more on fuel during the Iran war. — WSJ
• Shale billionaire Harold Hamm plans to announce his company, Continental Resources, is making a major investment in Venezuela. — Bloomberg

World

• European Commission President Ursula von der Leyen said she supports Canada’s bid to join the EU as its first associate member.

— Former President Barack Obama memorializing his family’s Portuguese water dog, Sunny, who died Tuesday.

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, Ashley Gold, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel, David Lim