Federal appeals court hears arguments on nation's first ban on gender-affirming care for minors

ST. LOUIS (AP) — Arguments before a federal appeals court that is considering whether to reinstate Arkansas' first-in-the-nation ban on gender-affirming care for minors focused Thursday on whether it and similar restrictions adopted by two dozen states discriminate on the basis of sex.

Ten judges with the 8th U.S. Circuit Court of Appeals in St. Louis heard arguments over a judge's ruling last year that struck down the ban as unconstitutional. The 2021 law would prohibit doctors from providing gender-affirming hormone treatment, puberty blockers or surgery to anyone under 18.

An attorney for the American Civil Liberties Union, which challenged the law on behalf of four transgender youths and their parents, said the restriction infringes on the longstanding rights of parents to make decisions about their children's medical care.

“Arkansas believed that that government knew better than the loving parents in this case what was best for their minor children,” Chase Strangio, deputy director for transgender justice for the ACLU’s LGBTQ and HIV Project, told the court. “That burdens that longstanding right of parents to direct the medical care of their children.”

At least 24 states have adopted laws restricting or banning gender-affirming medical care for transgender minors, and most of those face lawsuits. The restrictions on health care are part of a larger backlash against transgender rights, touching on everything from bathroom access to participation in sports.

The 43-minute hearing on the Arkansas law drew a packed audience that included the actor Elliot Page, who has filed a brief asking the court to uphold last year's ruling.

Dylan Jacobs, the deputy solicitor general for Arkansas, argued that the law doesn't discriminate based on sex because it bans the treatments for a specific purpose.

“Minors may be prescribed testosterone for any purpose other than gender transition under this statute,” Jacobs said, adding that states have “wide-ranging authority” to regulate health, safety and medical ethics.

The case went before the full court rather than a three-judge panel after it granted a request by Republican Attorney General Tim Griffin. The move could speed up the case's march toward the U.S. Supreme Court, which has been asked to block similar laws in Kentucky and Tennessee. All but one of the judges hearing arguments Thursday were appointed by Republican presidents.

Jacobs was repeatedly questioned by Judge Jane Kelly, who was appointed to the court by former President Barack Obama, about the state's arguments that the law doesn't discriminate based on sex.

Judge David Stras, who was appointed to the court by former President Donald Trump, asked attorneys on both sides whether gender identity is "fully fixed" before the end of puberty and whether that would be justification for a ban like Arkansas'.

Jacobs said the Legislature setting 18 as the cutoff age implies that was part of its reasoning. Strangio noted that none of the treatments banned by Arkansas are prescribed before the onset of puberty.

It’s unclear when the 8th Circuit will make a ruling. Chief Judge Steven Colloton said it will issue a decision “in due course.”

“This ongoing battle, in Arkansas and across the United States, is a stark reminder of the challenges we face in ensuring that everyone has the freedom to access the care they need and deserve,” the families challenging the law said in a statement after the hearing.

U.S. District Judge Jay Moody last year ruled that Arkansas' health care restrictions violated the due process and equal protection rights of transgender youths and families. He also ruled that it violated the First Amendment by prohibiting doctors from referring patients elsewhere for such care. Moody had temporarily blocked the law before it could take effect in 2021.

The ACLU is also representing two medical providers of the care. Multiple medical groups, including the American Medical Association and the American Academy of Pediatrics, have opposed Arkansas' ban and urged the 8th Circuit to uphold the decision against it. An attorney for Justice Department, which opposes Arkansas' ban, also appeared before the court.

The state has pointed to appeals court rulings allowing Alabama, Kentucky and Tennessee's bans to be enforced. Arkansas’ attorneys have called the care “experimental,” a description that Moody’s ruling said was refuted by decades of clinical experience and scientific research. The state has argued that Moody's order creates a “novel new” right that parents can direct their children to receive medical care that the state does not find safe.

Judges’ orders are temporarily blocking enforcement of similar bans in Idaho and Montana.

Arkansas' ban was enacted after the majority-GOP Legislature overrode a veto by Asa Hutchinson, the Republican governor at the time. Current Gov. Sarah Huckabee Sanders, Hutchinson's successor and also a Republican, has said she would have approved the ban and last year signed legislation making it easier to sue providers of such care for malpractice.

This story has been updated to correct that the court’s chief judge is Steven Colloton, not Lavenski Smith.

DeMillo reported from Little Rock, Arkansas.

FILE - Dylan Brandt speaks at a news conference outside the federal courthouse in Little Rock, Ark., July 21, 2021. (AP Photo/Andrew DeMillo, File)

ACLU attorney Chase Strangio, right, and actor Elliot Page leave the 8th U.S. Circuit Court of Appeals after a hearing Thursday, April 11, 2024, in St. Louis. The Federal appeals court is hearing arguments over Arkansas' first-in-the-nation ban on gender-affirming care for minors. Page was at the hearing in support of the ACLU’s challenge to the law. (AP Photo/Jim Salter)

WASHINGTON (AP) — The Federal Reserve on Wednesday emphasized that inflation has remained stubbornly high in recent months and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target.

The Fed issued its decision in a statement after its latest meeting, at which it kept its key rate at a two-decade high of roughly 5.3%. Several hotter-than-expected reports on prices and economic growth have recently undercut the Fed’s belief that inflation was steadily easing. The combination of high interest rates and persistent inflation has also emerged as a potential threat to President Joe Biden’s re-election bid.

“In recent months," Chair Jerome Powell said at a news conference, “inflation has shown a lack of further progress toward our 2% objective."

“It is likely that gaining greater confidence,” he added, "will take longer than previously expected.”

The Fed chair stressed, as he has before, that the central bank's decision on when to cut rates will depend on the latest economic data. But he struck a note of optimism, saying, “My expectation is that over the course of this year, we will see inflation move back down.”

Wall Street traders cheered the prospect that the Fed will cut rates at some point this year, even if not as soon as they had hoped. Share prices surged and yields fell during Powell's news conference, with stock indexes all rising more than 1%.

Still, the central bank’s latest message reflects a shift in its timetable on interest rates. As recently as their last meeting on March 20, the Fed’s policymakers had projected three rate reductions in 2024, likely starting in June. Rate cuts by the Fed would lead, over time, to lower borrowing costs for consumers and businesses, including for mortgages, auto loans and credit cards. But given the persistence of elevated inflation, financial markets now expect just one rate cut this year, in November, according to futures prices tracked by CME FedWatch.

The Fed’s warier outlook stems from three months of data that pointed to chronic inflation pressures and robust consumer spending. Inflation has cooled from a peak of 7.1%, according to the Fed’s preferred measure, to 2.7%, as supply chains have eased and the cost of some goods has actually declined.

Average prices, though, remain well above their pre-pandemic levels, and the costs of services ranging from apartment rents and health care to restaurant meals and auto insurance continue to surge. With the presidential election six months away, many Americans have expressed discontent with the economy, notably over the pace of price increases.

On Wednesday, the Fed announced that it would slow the pace at which it’s unwinding one of its biggest COVID-era policies: Its purchase of several trillion dollars in Treasury securities and mortgage-backed bonds, an effort to stabilize financial markets and keep longer-term rates low.

The Fed is now allowing $95 billion of those securities to mature each month, without replacing them. Its holdings have fallen to about $7.4 trillion, down from $8.9 trillion in June 2022, when it began reducing them. On Wednesday, the Fed said it would, in June, reduce its holdings at a slower pace, and allow a total of $60 billion of bonds to run off each month.

By cutting back its holdings, the Fed could contribute to keeping longer-term rates, including mortgage rates, higher than they would be otherwise. That’s because as it reduces its bond holdings, other buyers will have to buy the securities instead, and rates might have to rise to attract the needed buyers.

The U.S. economy is healthier and hiring stronger than most economists thought it would be at this point. The unemployment rate has remained below 4% for more than two years, the longest such streak since the 1960s. And while economic growth reached just a 1.6% annual pace in the first three months of this year, consumer spending grew at a robust pace, a sign that the economy will keep expanding.

That economic strength has led some Fed officials to speculate that the current level of interest rates might not be high enough to have the cooling effect on the economy and inflation that they need — and that the policymakers might even need to switch back to rate increases.

But at Wednesday's news conference, Powell sought to dispel such speculation, saying, "I think it’s unlikely that the next policy rate move will be a hike.”

He also downplayed any concerns that the economy might be at risk of sliding into “stagflation” — a toxic combination of weak growth, high unemployment and elevated inflation that afflicted the United States during the 1970s.

“I was around for stagflation," Powell said, "and it was 10% unemployment, it was high-single-digit inflation. And very slow growth. Right now, we have 3% growth which is pretty solid growth, I would say, by any measure. And we have inflation running under 3%. ...I don’t see the ‘stag’ or the ‘flation,’ actually.”

FILE - Federal Reserve Board chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, March 20, 2024. The Federal Reserve wraps up its two-day policy meeting Wednesday, May 1, 2024. Most analysts expect that the central bank will leave its benchmark borrowing rate alone for the sixth straight meeting. (AP Photo/Susan Walsh, File)