The next Fed chair will have to walk the tightrope convincing President Trump he’s the right choice while also winning over Wall Street. Read more in today’s WSJ Politics newsletter:

The Federal Reserve has cut interest rates by a quarter point for the third time in 2025, with Chair Jerome Powell indicating signs of economic improvement while acknowledging ongoing challenges. This decision has led to a rally in stocks on Wall Street as consumer concerns about the economy persist.

President Trump has announced military strikes targeting boats suspected of drug trafficking, claiming this will help reduce drug overdose deaths in the U.S. However, experts express skepticism, suggesting that such military actions may be counterproductive and could exacerbate the issue.

President Trump granted clemency to 1,600 individuals in 2025, showcasing a marked difference in his use of presidential powers compared to his first term. This clemency reflects his administration's approach to justice and rehabilitation, emphasizing a more lenient stance on certain offenses.

A recent release of over 18,000 emails from Jeffrey Epstein reveals that he maintained significant ties to Wall Street, including a $1 million investment in a hedge fund shortly after allegations of sexual misconduct surfaced. This correspondence highlights the ongoing connections Epstein had with influential financial entities even after his first arrest for sex crimes.

Indiana is currently the focus of a significant redistricting vote that tests the influence of former President Trump over Republican lawmakers. A congressional map drawn by Republicans has advanced through the state legislature, but its final approval remains uncertain amid internal party tensions.

The Republican Party is experiencing internal tension as it prepares for the 2025 elections, particularly regarding messaging on economic issues. President Trump has been hesitant to use the term 'affordability,' which has raised concerns among GOP members about their electoral strategy ahead of the midterms.

Following the inauguration of President Trump, CentroNia bilingual preschool staff began preparing for potential Immigration and Customs Enforcement (ICE) visits, reflecting the heightened immigration enforcement in their historically Latino neighborhood. This summer, the presence of ICE led teachers to avoid taking children to local parks and libraries, which had previously served as extensions of their educational environment.

President Trump visited a casino in Monroe County, Pennsylvania, where he previously garnered support for his economic vision. The visit raises questions about whether local voters still align with his economic policies amid changing economic conditions.