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The Latest: Congress scrambles to save bipartisan spending deal before Friday night deadline

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The Latest: Congress scrambles to save bipartisan spending deal before Friday night deadline
News

News

The Latest: Congress scrambles to save bipartisan spending deal before Friday night deadline

2026-01-31 00:54 Last Updated At:01:00

Senate leaders were scrambling to save a bipartisan spending deal and avert a partial government shutdown at midnight Friday. Democrats have demanded new restrictions on federal immigration raids across the country.

Democrats struck a rare deal with President Donald Trump Thursday to separate funding for the Homeland Security Department from a broad government spending bill and fund it for two weeks while Congress debates curbs on the U.S. Immigration and Customs Enforcement agency.

The deal came as irate Democrats had vowed to vote against the entire spending bill and trigger a shutdown in the wake of the deaths of two protesters at the hands of federal agents in Minneapolis.

Senate Majority Leader John Thune said late Thursday there were “snags on both sides” as he and Democratic leader Chuck Schumer tried to work through any objections that could delay passage past the Friday deadline.

The latest:

Senate Democratic leader Chuck Schumer says time is of the essence in reining in ICE to prevent a government shutdown .

“I hope we can get voting quickly here in the Senate,” the Democratic leader said as the chamber opened, “so we can move forward on the important work of reining ICE.”

Action on a government funding deal struck with Trump came to a standstill late Thursday as key senators, including Republican Sen. Lindsey Graham, refused to move ahead with voting.

Talks are underway on next steps ahead of a midnight deadline to fund several federal agencies or risk a partial shutdown.

“We’re looking at everything that would shed light on that day,” Deputy Attorney General Todd Blanche said on Friday.

Alex Pretti, a Minneapolis resident, was killed Saturday by Border Patrol officers, according to federal officials. He was attending a protest against an immigration enforcement operation.

The development followed confirmation by the Department of Homeland Security earlier in the day that the FBI would now lead the probe into Pretti’s death.

Homeland Security Secretary Kristi Noem first disclosed the investigation’s shift to the FBI during a Fox News interview Thursday evening. Her department said earlier this week that Homeland Security Investigations, a unit within the department, would be heading the investigation.

Trump is asking the justices to allow him to put in place an executive order declaring that children born to parents who are in the United States illegally or temporarily are not American citizens.

Lower courts have so far uniformly ruled against him.

The court on Friday issued its schedule of arguments for late March and early April. The justices are giving themselves roughly three months to reach a decision. The court generally winds up its work by the end of June.

The birthright citizenship order, which Trump signed Jan. 20, the first day of his second term, is part of his Republican administration’s broad immigration crackdown.

Several civil and immigration rights groups filed a lawsuit against the Trump administration Friday challenging a policy that allows federal immigration agents to enter private homes without a warrant.

The lawsuit by Lawyers for Civil Rights on behalf of the Greater Boston Latino Network and Brazilian Worker Center challenges a May 2025 memorandum from the acting director of the U.S. Immigration and Customs Enforcement that allows agents to enter private residents.

“The Fourth Amendment exists precisely to prevent government agents from breaking into people’s homes without any judicial process or oversight,” Brooke Simone, a staff attorney at Lawyers for Civil Rights, said in a statement.

The Trump administration imposed sanctions Friday against Iran ’s interior minister, accusing Eskandar Momeni of repressing nationwide protests that have challenged Tehran’s theocratic government. The penalties are the latest by the United States and the European Union targeting high-ranking officials over the crackdown.

The administration says Momeni has overseen Iran’s law enforcement forces that are responsible for the deaths of thousands of peaceful protesters.

Economic woes sparked the protests in late December before they broadened into a challenge to the Islamic Republic. The crackdown soon followed, which activists say has killed more than 6,000 people. Iranian officials and state media repeatedly refer to the demonstrators as “terrorists.”

The EU on Thursday imposed its own sanctions against Momeni, along with members of Iran’s judicial system and other high-ranking officers.

Russian President Vladimir Putin has agreed to Trump’s request to pause attacks on Ukraine’s power grid for a week.

Trump announced this on Thursday, but details about the timing and scope remain unclear. Kremlin spokesperson Dmitry Peskov confirmed the request but didn’t specify when it would start.

Ukrainian President Volodymyr Zelenskyy expressed skepticism, noting ongoing Russian attacks. Despite the pause, Russia continues drone and missile strikes. Bitter cold is expected in Ukraine, worsening conditions. Talks are ongoing, but no ceasefire agreement has been reached.

Financial markets are uneasy as investors try to figure out what Trump’s new nominee, Kevin Warsh, to lead the Federal Reserve will mean.

U.S. stocks fell modestly Friday. The S&P 500 dipped 0.1%. The Dow Jones Industrial Average fell 118 points, and the Nasdaq composite slipped 0.2%.

Prices for U.S. Treasury bonds initially rose following Trump’s announcement, perhaps suggesting increased hopes in the Fed’s ability to stay independent, before paring back.

Some of the wildest action was again in the precious metals markets, where gold’s price swung.

Leaders from Canada, the United Kingdom, Finland and other countries have recently visited China, while more are planning to go.

Since Trump took office again, America’s closest allies are exploring opportunities with China following clashes with Trump over tariffs and his demands to take over Greenland from NATO ally Denmark.

They’re resetting relations with a country long seen as a top adversary to many Western partners and the top economic rival to the U.S. despite the risk of irking Trump. This week alone, the prime ministers of the U.K. and Finland went to meet Chinese President Xi Jinping.

Protesters across the U.S. are calling for a nationwide strike to oppose the Trump administration’s immigration crackdown in Minneapolis.

The demonstrations are calling for “no work, no school, no shopping” on Friday.

The calls come almost a week after intensive care nurse Alex Pretti was killed while recording Border Patrol officers with his cellphone.

Multiple businesses announced they would be closed during the “blackout,” while some schools canceled classes in anticipation of mass absences. Some students are planning walkouts, while others plan to gather in churches, courthouses and city centers in solidarity.

Three other people were arrested with Lemon on Friday in connection with an anti-immigration protest that disrupted a service at a Minnesota church and increased tensions between residents and the Trump administration.

Lemon was arrested by federal agents in Los Angeles, where he had been covering the Grammy Awards, his attorney Abbe Lowell said.

It is unclear what charge or charges Lemon and the others are facing in the Jan. 18 protest at the Cities Church in St. Paul. Lemon’s arrest came after a magistrate judge last week rejected prosecutors’ initial bid to charge him.

Lemon, who was fired from CNN in 2023, has said he has no affiliation to the organization that went into the church and that he was there as a journalist chronicling protesters.

Warsh was previously a runner-up for the Senate-confirmed post of Fed Chair in 2017, when Trump selected Powell to lead the central bank.

Warsh is credentialed with degrees from Stanford University and Harvard University Law School. He is also married to Jane Lauder, the daughter of billionaire cosmetics heir Ronald Lauder, a major Republican donor.

At 35, Warsh became the youngest governor on the Fed’s seven member board, serving in that post from 2006 to 2011. Warsh worked closely with then-Chair Ben Bernanke in 2008-09 during the central bank’s efforts to combat the financial crisis and the Great Recession.

Warsh has been working as a visiting economics fellow at the Hoover Institution, a conservative think tank located at Stanford University. He is also a lecturer at the Stanford Graduate School of Business and a partner at the Duquesne Family Office, which manages the wealth of billionaire investor Stanley Druckenmiller.

The Department of Homeland Security says that the Federal Bureau of Investigation is now heading the investigation into the shooting death of Alex Pretti.

The Department said earlier this week that Homeland Security Investigations, which is a unit within the department, would be heading the investigation.

But Homeland Security Secretary Kristi Noem said during an interview with Fox News on Thursday that the FBI was in the lead. Tricia McLaughlin, a spokeswoman for the Department said Friday in an email that HSI will support them.

Separately, Customs and Border Protection is doing its own internal investigation.

Homeland Security did not immediately respond to questions about when the change was made or why.

“Don Lemon is an accomplished journalist whose urgent work is protected by the First Amendment,” said Rep. Hakeem Jeffries on social media.

“There is zero basis to arrest him. He should be freed immediately.”

He said “The Trump Justice Department is illegitimate. They will all be held accountable for their crimes against the Constitution.”

The retiring North Carolina senator has been among a group of Senate Republicans who have rushed to the defense of current Federal Reserve Chair Jerome Powell after it was revealed earlier this month that the Justice Department had opened an inquiry into him.

After Trump said Friday that he would nominate former Federal Reserve official Kevin Warsh to serve as the next chair of the Fed, Tillis made clear the inquiry would stand in the way of any confirmation.

“I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis wrote.

Tillis, a swing vote on the Senate Banking Committee, which oversees the Federal Reserve and approves central bank nominees, said in his post that Warsh is a “qualified nominee,” but stressed that “protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”

Tillis’s opposition could complicate the confirmation process for Warsh and Senate GOP leaders. Asked late Thursday whether Warsh could be confirmed without Tillis’s support, Senate Majority Leader John Thune said, “probably not.”

Journalist Don Lemon has been arrested after he entered a Minnesota church and recorded anti-immigration enforcement protesters who disrupted a service in an incident that increased tensions between residents and the Trump administration, his lawyer said Friday.

It was not immediately clear what charge or charges Lemon was facing in the Jan. 18 protest. The arrest came after a magistrate judge last week rejected prosecutors’ initial bid to charge the journalist.

Trump says he’ll nominate former Federal Reserve governor Kevin Warsh to be the next Fed chair.

Friday’s pick is likely to result in sharp changes to the powerful agency that could bring it closer to the White House and reduce its longtime independence from day-to-day politics.

Warsh would replace Jerome Powell when his term expires in May. Trump chose Powell to lead the Fed in 2017 but recently has assailed him for not cutting interest rates quickly enough. Warsh’s appointment requires Senate confirmation.

Warsh was on the Fed’s board from 2006 to 2011. He’s a fellow at the right-leaning Hoover Institution and a lecturer at the Stanford Graduate School of Business.

Trump has signed an executive order that would impose a tariff on any goods from countries that sell or provide oil to Cuba, a move that puts pressure on Mexico.

Mexican President Claudia Sheinbaum says her government had at least temporarily stopped oil shipments to Cuba.

She says it was a “sovereign decision” not made under pressure from the U.S. Trump has squeezed Mexico to distance itself from the Cuban government. In the wake of the U.S. military operation to oust former Venezuelan President Nicolás Maduro, Trump has said the Cuban government is ready to fall.

Trump is suing the IRS and Treasury Department for $10 billion, as he accuses the federal agencies of a failure to prevent a leak of the president’s tax information to news outlets between 2018 and 2020.

The suit, filed in a Florida federal court, includes the president’s sons Eric Trump and, Donald Trump Jr. and the Trump organization as plaintiffs.

Melania Trump is capping her first year back as first lady with the global release of a documentary she produced about the 20 days leading up to her husband’s return to the White House.

A private person, Melania Trump remains a bit of a mystery to the public in her husband’s second term. “Melania” premiered Thursday at the Kennedy Center before it is released on Friday in more than 1,500 theaters in the U.S. and around the world.

President Donald Trump arrives for the premiere of first lady Melania Trump's movie "Melania" at The John F. Kennedy Memorial Center For The Performing Arts, Thursday, Jan. 29, 2026, in Washington. (AP Photo/Allison Robbert)

President Donald Trump arrives for the premiere of first lady Melania Trump's movie "Melania" at The John F. Kennedy Memorial Center For The Performing Arts, Thursday, Jan. 29, 2026, in Washington. (AP Photo/Allison Robbert)

NEW YORK (AP) — Financial markets are churning on Friday as investors try to figure out what President Donald Trump’s new nominee to lead the Federal Reserve will mean for them.

The early reactions have been uneasy and sometimes quick to change because of the uncertainty. U.S. stocks fell modestly, with the S&P 500 down 0.5%. The Dow Jones Industrial Average was down 440 points, or 0.9%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.

The value of the U.S. dollar, meanwhile, climbed but only after swiveling a couple times following Trump’s announcement. And some of the wildest action was again in precious metals markets, where the price of gold went through more cycles of tumbling sharply and retracing some of its losses.

Whoever leads the Fed has a big influence on the economy and markets worldwide by helping to dictate where the U.S. central bank moves interest rates. Such decisions lift or weigh on prices for all kinds of investments, as the Fed tries to keep the U.S. job market humming without letting inflation get out of control. Trump has been pushing for lower interest rates, which usually help goose the economy but can also lead to higher inflation.

A fear in financial markets has been that the Fed will lose some of its independence because of Trump. That fear has in turn helped push up the price of gold and weaken the U.S. dollar’s value.

The longtime assumption for investors has been that the Fed can operate separately from the rest of Washington so that it can make decisions that are painful in the short term but necessary for the long term. To get inflation down to the Fed's goal of 2%, for example, may require the unpopular choice to keep interest rates high and grind down on the economy for a while.

The big question is what Trump’s nominee, Kevin Warsh, means for the Fed's independence.

Warsh used to be a governor on the Fed’s board, so investors are familiar with him. That could also mean Warsh is familiar with and hopes to continue the institution of the Fed as an independent operator. And while with the Fed, Warsh criticized the central bank's buying of bonds to keep interest rates low.

Some on Wall Street took Warsh's nomination as an encouraging signal for a still-independent Fed.

But Warsh has also recently been critical of the Fed’s current chair, Jerome Powell, and has voiced support for lower rates.

“Indeed, Warsh is not the Fed’s guy, he is Trump’s guy, and has shadowed Trump on monetary policy almost every step of the way since 2009,” according to Thierry Wizman, a strategist at Macquarie Group. “This doesn’t necessarily mean that Warsh will push the Fed into rate cuts soon,” but it could indicate he may be quicker to do so when the time comes.

On Wall Street, stocks of metals miners tumbled as the price of gold sank 5.8% to $5,046.00 per ounce. Gold's price has suddenly run out of momentum following a tremendous rally where it roughly doubled over 12 months. It topped $5,000 for the first time on Monday and got near $5,600 on Thursday.

Silver, which has been on a similar, jaw-dropping tear, fell even more. It dropped 16.4%.

Prices for gold and other precious metals had been surging as investors looked for safer places for their money while weighing a wide range of risks, including a potentially less independent Fed, a U.S. stock market that critics say is expensive, political instability, threats of tariffs and heavy debt loads for governments worldwide.

Friday's drops for metals prices helped send the stock of miner Newmont down 7.9%. Freeport-McMoRan, another miner, dropped 7.2%.

Also weighing on the market was a dip of 0.6% for Apple, even though the iPhone maker reported a stronger profit for the latest quarter than analysts expected.

Meta Platforms was the heaviest weight on the S&P 500 and slid 2.7% to give back some of its big gain from the day before, after it reported a stronger profit than expected.

Helping to limit the market's losses was Tesla, which rose 5.3%. It bounced back after dropping on Thursday despite delivering better profit reports for the latest quarter than analysts expected.

In the bond market, the yield on the 10-year Treasury held at 4.24%. That's where it was late Thursday, but in the overnight and early-morning hours, it had climbed near 4.28% before falling back. A rise in a bond's yield indicates that its price is weakening.

Yields may have felt some upward pressure later in the morning from a report released Friday showing U.S. inflation at the wholesale level was hotter last month than economists expected. That could put additional pressure on the Fed to keep interest rates steady for a while instead of continuing to cut them, as it did late last year.

In stock markets abroad, indexes rose in much of Europe following a mixed performance in Asia.

Stocks rose 1.2% in Jakarta after the CEO of Indonesia’s stock market, Imam Rachman, resigned Friday. Stocks had stumbled there in prior days after MSCI, an influential company in the investment industry that creates stock and other indexes, warned about market risks such as a lack of transparency.

Anthony Spina, left, works with fellow options traders on the floor of the New York Stock Exchange, Wednesday, Jan. 28, 2026. (AP Photo/Richard Drew)

Anthony Spina, left, works with fellow options traders on the floor of the New York Stock Exchange, Wednesday, Jan. 28, 2026. (AP Photo/Richard Drew)

A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Jan. 28, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm Wednesday, Jan. 28, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

Currency traders pass by a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

Currency traders pass by a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Jan. 30, 2026. (AP Photo/Ahn Young-joon)

A man walks past an electronic board displaying stock prices and Jakarta Stock Exchange Composite Index, at the Indonesia Stock Exchange in Jakarta, Indonesia, Wednesday, Jan. 28, 2026. (AP Photo/Tatan Syuflana)

A man walks past an electronic board displaying stock prices and Jakarta Stock Exchange Composite Index, at the Indonesia Stock Exchange in Jakarta, Indonesia, Wednesday, Jan. 28, 2026. (AP Photo/Tatan Syuflana)

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