Fed Keeps Interest Rates, Texas Redistricting, US Middle East Envoy In Israel

Summary

Up First from NPR – July 31, 2025

NPR's "Up First" delivers the three biggest stories of the day with in-depth reporting and analysis. In this episode, hosts Steve Inskeep and Amy Martinez cover pivotal topics including the Federal Reserve's decision on interest rates, Texas's controversial redistricting efforts, and the United States' diplomatic engagement in the Middle East amidst the ongoing crisis in Gaza.

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1. Federal Reserve Maintains Interest Rates Despite Internal Dissent

Steady Amid Pressure: The Federal Reserve has opted to keep interest rates unchanged, adhering to Chairman Jerome Powell's stance despite pressure from within the committee and external influences. Two committee members, Chris Waller and Michele Bowman—both appointees of former President Donald Trump—voted against the majority decision to hold rates steady. This marks a rare instance of dissent, as committee votes on interest rates typically result in unanimous decisions.

Dissenting Voices: Steve Inskeep notes, "I've tried to lay out very clearly in economic terms why we could do this. The majority stuck with Chairman Jerome Powell and held rates steady" (00:32). Scott Horsley elaborates on the internal dynamics, stating, "Waller and Bowman are the two Trump appointees on the Fed board. They were in the minority this week, but it's possible there will be more votes for a rate cut at the next Fed meeting in September" (05:11).

Economic Implications: The dissent stems from differing views on the impact of President Trump's tariffs and the current state of the job market. Chris Waller argued that the tariffs' price hikes are likely temporary and that the job market is weaker than the 4.1% unemployment rate suggests. He suggested that cutting rates could prevent further deterioration of the job market (05:01).

Data Reliability Concerns: A critical issue highlighted is the Labor Department’s recent scaling back of price checks by 15%, potentially undermining the reliability of inflation data. Powell emphasized the importance of accurate data for both the Fed and private businesses, stating, "the Fed and lots of private businesses really depend on these government economic indicators, and it's important they be accurate" (05:59).

Future Outlook: With two more months of jobs and inflation data pending, the Fed's next decisions will heavily rely on incoming economic indicators. The upcoming Labor Department report on July's jobs and unemployment numbers is anticipated to provide further clarity (06:10).

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2. Texas Republicans Advance Gerrymandered Congressional Map

Redistricting Proposal: Texas Republicans have unveiled a new proposal for congressional district maps aimed explicitly at increasing Republican representation in the U.S. House. President Trump has endorsed the plan, which anticipates helping Republicans secure an additional five seats, projecting a total of 30 districts in Texas—a jump from the current 25 (06:35).

Strategic Intent: Hansi Lo Wang explains, "it looks like the kind of map that President Trump has said he wants... this map could help Republicans win 30 districts in Texas" (06:48). The plan's design is overtly gerrymandered to skew electoral outcomes in favor of Republicans, raising significant concerns about electoral fairness.

Legislative and Legal Challenges: The proposed map faces uncertainty in passing through the legislative process and is likely to encounter legal challenges. Changes to districts, especially in populous areas like Houston and Dallas, have already been criticized as "unconstitutional" by Trump officials at the Justice Department (07:46). Legal experts argue that such extensive alterations could lead to constitutional disputes, while Democrats are preparing to contest the changes through lawsuits (08:14).

Democratic Responses and National Impact: Democrats are strategizing to counteract the redistricting by exploring opportunities to gain more House seats in other states. Former U.S. Attorney General Eric Holder, now chairing the National Democratic Redistricting Committee, indicated a willingness to take "responsible responsive actions" to protect democratic foundations, even if it means deviating from previously supported independent redistricting commissions in states like California and New York (08:23).

Broader Implications: Redistricting efforts extend beyond Texas, with states such as Ohio, Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Utah, and Wisconsin also grappling with new district maps either through legislative action or litigation. These changes are crucial as the balance of power in the House of Representatives remains precarious, with potential shifts hinging on how district lines are drawn (09:18).

Key Quote: Steve Inskeep encapsulates the gravity of the situation: "It's just amazing to think about this because hypothetically, what we're talking about is the exact same distribution of votes between Democrats and Republicans, but depending on where you draw the lines, you could have a difference in who controls the House of Representatives" (09:54).

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3. U.S. Envoy Steve Witkoff Visits Israel Amid Escalating Gaza Crisis

Diplomatic Mission: U.S. Middle East envoy Steve Witkoff is currently in Israel to address the severe humanitarian crisis in Gaza and the ongoing hostage situation. His visit comes after stalled ceasefire negotiations and amidst increasing global concern over the humanitarian conditions in the region (10:06).

Humanitarian Concerns: Despite temporary pauses in fighting to allow food deliveries, aid organizations report that the influx of humanitarian aid remains insufficient. The UN-backed panel has described the situation as the "worst case scenario of famine unfolding," with over 60,000 casualties, including more than 18,000 children (13:01).

Israeli and U.S. Relations: There are emerging signs of tension between Israel and the U.S. due to differing stances on the humanitarian situation in Gaza. President Trump has publicly criticized Israel's handling of the crisis, highlighting images of starving children and labeling them as "terrible" (10:56). Conversely, Israeli officials emphasize their efforts to maintain alignment with U.S. policies, although internal debates and external pressures are causing strain.

International Responses: Global reactions have intensified, with countries like France, the UK, and Canada signaling intentions to recognize Palestine as a state under certain conditions. These moves place additional pressure on both Israel and the U.S., impacting diplomatic relations and potential trade agreements (12:04).

Internal Israeli Dynamics: Within Israel, there is growing weariness and debate over the prolonged conflict and the inability to secure the release of hostages held by Hamas. Public sentiment is shifting, as evidenced by headlines like "how we lost the world" in Israeli media, reflecting national frustration and fatigue (12:04).

Calls for Disarmament: Regional actors, including Saudi Arabia and the Arab League, have called on Hamas to relinquish power and disarm, adding another layer of complexity to the conflict. Meanwhile, Israel continues its ground operations and airstrikes in Gaza, exacerbating the humanitarian crisis (13:00).

Key Quote: Emily Fang reports from Tel Aviv, highlighting the dire situation: "Aid organizations we've been talking to say Israel has not permitted them to bring in the volume of food and aid that they would like to see and that scarcity means desperate people and gangs are looting these food trucks" (12:30).

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Conclusion

In today's episode of "Up First," NPR delivers critical updates on the Federal Reserve's cautious approach to interest rates amidst internal and external pressures, Texas's aggressive redistricting efforts aimed at reshaping congressional control, and the United States' diplomatic endeavors in addressing the escalating humanitarian crisis in Gaza. These stories underscore the intricate balance of economic policy, political strategy, and international diplomacy shaping current events.

For more detailed reporting and analysis, subscribe to NPR's Up First+ and enjoy ad-free listening at plus.npr.org/upfirst.

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Note: The timestamps referenced correspond to key moments in the podcast transcript provided.

Transcript

[Steve Inskeep]

I stepped outside this morning. It's extremely hot in Washington. And I shut my door and there were just all kinds of insects on the doors, like, thank goodness I got that closed before they ventured in.

[Martinez]

They do seek cooler environments, that's for sure.

[Steve Inskeep]

Oh, do they really? Yeah. I didn't know that.

[Martinez]

Yeah. When flies get into my house, they always go to the bathroom. The bathroom's the coolest room in my house.

[Steve Inskeep]

Do they flush?

[Martinez]

Two members of a Federal Reserve Committee pushed for lower interest rates.

[Steve Inskeep]

I've tried to lay out very clearly in economic terms why we could do this. The majority stuck with Chairman Jerome Powell and held rates steady. So what happens next?

[Martinez]

I'm Martinez with Steve Inskeep. And this is up first from NPR News. Texas Republicans obeyed the president's call to propose a new election map. The gerrymander is openly designed to skew the results to give Republicans extra seats in Congress. What will Texas approve in the end? And how will Democrats respond?

[Steve Inskeep]

Also, another day passes with people hungry in Gaza.

[Scott Horsley]

Zero trucks made it to the UN Warehouses where it needs to be distributed.

[Steve Inskeep]

The markets are skyrocketing.

[Scott Horsley]

It's still empty.

[Steve Inskeep]

What can a US Envoy do about it in a trip to Israel? Stay with us. We've got the news you need to start your day.

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[Steve Inskeep]

Did nothing yesterday, which is just what they've been doing for a while on interest rates. The news here is in how they did it.

[Martinez]

Two members of a Fed committee voted not to hold interest rates steady. That's a rare level of dissent, although a big majority stayed with Chairman Jerome Powell. And it comes amid an unprecedented pressure campaign by President Trump.

[Steve Inskeep]

NPR's Scott Horsley took an interest in this story. Hey there, Scott.

[Scott Horsley]

Good morning, Steve.

[Steve Inskeep]

So what is the difference of opinion here?

[Scott Horsley]

Well, the president wants lower interest rates and he's been very critical of the Fed for not moving more aggressively in that direction. It's not unusual for presidents to want lower interest rates to juice the economy in the short run. It is unusual for them to be as vocal as President Trump has. But the Fed was set up to be insulated from that kind of pressure precisely so it can make hard decisions when it has to to keep inflation under control. Now, inflation is not nearly as high as it was a few years ago, but it's still higher than the Fed would like. And a lot of policymakers at the Fed are worried that the president's own tariffs could push prices higher Still. Chairman Jerome Powell noted yesterday that the government's collecting about $30 billion a month in tariffs. That money has to come from someplace. Powell says so far it doesn't look as though companies are picking up very much the tab. Instead, it's mostly being paid by US Importers, retailers, and in some cases consumers.

[Emily Fang]

It's starting to show up in consumer prices. We expect to see more of that. And we know from surveys that companies feel that they have every intention of putting this through to the consumer. But you know, the truth is they may not be able to. In many cases.

[Scott Horsley]

That's because consumers are more price sensitive now than they were a few years ago. So it may be that American businesses have to eat more of the tariff costs themselves.

[Steve Inskeep]

Okay, so the interest rates are set by committee. The vote is usually unanimous, but not this time. What happened?

[Scott Horsley]

Yeah, committee votes are often unanimous. Sometimes there's a stray no vote. Yesterday was the first time in more than 30 years that two Fed governors broke with their colleagues. Chris Waller and Michele Bowman both said they would have preferred to cut rates by a quarter point this week. Waller gave a talk earlier this month where he argued that any price hikes associated with tariffs are likely to be a one time thing. So they're not going to keep pushing prices up month after month and put upward pressure on inflation. He also thinks the job market is weaker than that low 4.1% headline unemployment rate would indicate. So Waller thinks the Fed should cut rates now before the job market gets any worse.

[Steve Inskeep]

That's my view. I'm kind of in the minority on this, but I've tried to lay out very clearly in economic terms why we could do this. It's not political.

[Scott Horsley]

Waller and Bowman are the two Trump appointees on the Fed board. They were in the minority this week, but it's possible there will be more votes for a rate cut at the next Fed meeting in September.

[Steve Inskeep]

Well, I guess they're supposed to be driven by the data rather than politics. Do they get more data between now and then? Yes.

[Scott Horsley]

We'll have two more months of jobs numbers, two more months of inflation data, and that could offer a clearer picture of just how Trump's tariffs are playing out. But there's a wrinkle. The Labor Department said this week it's having to scale back the number of price checks it does each month by about 15% because of the president's federal job cuts. So the government's inflation yardstick might not be as reliable as it was in the past. Now, Powell was careful not to comment on the job cuts, but he did say both the Fed and lots of private businesses really depend on these government economic indicators, and it's important they be accurate.

[Emily Fang]

The government data really is the gold standard in data, and we need it to be good and be able to rely on it. We'll have to make do with what we have, but I certainly hope that we get what we need now.

[Scott Horsley]

We will get another important signal about the economy tomorrow. That's when the Labor Department reports on jobs and unemployment for the month of July.

[Steve Inskeep]

NPR Scott Horsley is monitoring the signals. Scott, thanks so much.

[Scott Horsley]

You're welcome.

[Steve Inskeep]

As expected, state lawmakers in Texas have a proposal for new voting districts for Congress.

[Martinez]

The rare mid decade redistricting plan is by Republicans with the goal of helping Republicans keep control of the U.S. house. And it has the backing of President Trump.

[Steve Inskeep]

NPR's Hansi Lo Wang has been tracking this and joins us now. Good morning.

[Hansi Lo Wang]

Good morning, Steve.

[Steve Inskeep]

Okay, so what is this map? What's it look like?

[Hansi Lo Wang]

It looks like the kind of map that President Trump has said he wants. As we've talked about before, Trump has said he wants Republicans to pick up five additional congressional House seats in Texas after next year's midterm election. There's an early analysis by the COCA report that says this map could help Republicans win 30 districts in Texas. Right now, Republicans have 25. But we should keep in mind there could be surprises in how the voters in these proposed districts would actually vote.

[Steve Inskeep]

Fair point. Because sometimes the voting patterns change. But the intent here, the open, explicit intent, is to skew the results toward Republicans. How will this get passed?

[Hansi Lo Wang]

It's not clear at this point. You know, this is the first proposal by Republicans in the Texas House of Representatives and it's still relatively early. This could be a weeks long process. And a key thing here to keep in mind is that even if Texas lawmakers pass this map or another one, there will likely be lawsuits.

[Steve Inskeep]

And what would be the legal arguments here?

[Hansi Lo Wang]

Well, this proposal makes a lot of changes to the current map, including to four districts in the Houston and Dallas areas. Those are the same four districts that two Trump officials at the Justice Department called, quote, unconstitutional. This is in a letter to Texas Governor. Now, a lot of legal experts don't buy that argument and they say undoing those districts could raise some actual constitutional problems. And national Democratic leaders have said they.

[Steve Inskeep]

Are prepared to sue and they're not just relying on the courts. It seems to me Democrats are preparing all sorts of responses or at least discussing all sorts of responses across the country.

[Hansi Lo Wang]

That's right. You know, they're looking into ways of picking up more House seats in other states. But they are in a real bind because over the years they have supported redistricting rules and independent commissions in states like California and New York that are supposed to prevent this party driven mid decade redistricting that we're seeing right now in Texas. And, and there was an interesting statement this week from former U.S. attorney General Eric Holder. He chairs the National Democratic Redistricting Committee now. And the statement says, quote, we do not oppose on a temporary basis responsible responsive actions to ensure the foundations of our democracy are not permanently eroded, unquote. So it sounds like some top Democrats are on board with trying to go toe to toe with this Republican gerrymandering, at least for now.

[Steve Inskeep]

Wow. And undoing some of their own efforts at reform in blue states. What other states talking about redistricting here though?

[Hansi Lo Wang]

Well, Ohio has to draw a new congressional map as we've talked about before, and there may be maps because of lawsuits in a lot of other states, Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Utah and Wisconsin, a lot of states. And any changes could help determine whether Republicans keep the House or lose it to the Democrats because it's just so close.

[Steve Inskeep]

It's just amazing to think about this because hypothetically, what we're talking about is the exact same distribution of votes between Democrats and Republicans, but depending on where you draw the lines, you could have a difference in who controls the House of Representatives.

[Hansi Lo Wang]

A lot at stake.

[Steve Inskeep]

Hansi, thanks so much.

[Hansi Lo Wang]

You're welcome, Steve.

[Steve Inskeep]

NPR's Hansi Lo Wang.

[Martinez]

The U.S. middle east envoy, Steve Witkoff is in Israel today, a week after ceasefire talks with Israel and Hamas stalled yet again in Doha, Qatar.

[Steve Inskeep]

But since then, global anger over the hunger in Gaza has grown, pushing Israel to let in some additional food.

[Martinez]

NPR's Emily Fang is with us now from Tel Aviv. Witkoff was in Israel what may. So why is he returning now?

[Unknown]

Right. Well, a person familiar with the details, but who is not authorized to speak publicly told us Witkoff is going to meet with Israeli Prime Minister Benjamin Netanyahu to discuss the humanitarian crisis in Gaza and to discuss getting hostages who are still in Gaza. Back now, Israel this week has been trying to project it is in lockstep with the U.S. here's Israel's foreign Minister, Gideon Saar. This week, he was asked by a reporter about hunger reaching famine threshold levels in Gaza. In response, he first thanked President Trump for his friendship and then he said this.

[Scott Horsley]

It will be very hard to try to find gaps between Israel and the US in terms of policies, including with regard to Gaza Strip.

[Unknown]

But these last couple of days, we are seeing signs of some daylight emerging between Israel and the US on the former's war against Hamas in Gaza. Trump this week directly contradicted Benjamin Netanyahu saying there is starvation in Gaza. And Trump said the first lady has also seen photos of hungry children in Gaza and he called these photos terrible. And so each side has been angling this week to put more pressure on the other. So we're seeing far right Israeli politicians who have been discussing annexing Gaza again, moving Palestinians en masse out of Gaza if the hostages are not returned. Hamas has been putting out statements echoing criticism of Israeli restrictions on food into Gaza. And now Witkoff himself is arriving in the region.

[Martinez]

Yeah, and that pressure that you mentioned is now global. I mean, France became the first G7 country to say it would recognize Palestine as a state.

[Unknown]

Right. Last week. And then the UK Said it would do so too if there was not a ceasefire by September. Just overnight, my time, Canada's prime minister announced Canada intends to recognize Palestine by September as well if the Palestinian Authority, which governs parts of the west bank, now makes certain political reforms. There's no sign the US Intends to follow all of this. And actually, Trump said that Canadian recognition of Palestinian statehood would, quote, make it very difficult for us to make a trade deal with them. But that aside, all these moves are making huge waves in Israel. I'm seeing a lot of signs of soul searching and also weariness over here over the fact that Israel is still fighting this grinding war and yet they've been unable to bring home hostages kidnapped by Hamas still being held up in Gaza. One headline I saw here from a top Israeli newspaper, quote, how we lost the world. And there's also more pressure on Hamas. Saudi Arabia and the Arab League this week called on Hamas to relinquish power and to disarm.

[Scott Horsley]

Yeah.

[Martinez]

And we know from our reporting that's been tougher than ever for people in Gaza, where this week a UN Backed panel said it's seeing, quote, the worst case scenario of famine unfolding. So what's been happening there?

[Unknown]

So starting Sunday, Israel's been pausing fighting for about 10 hours a day to let in more food trucks. But in reality, we have been reporting that very little food is actually making it to people who need it. Aid organizations we've been talking to say Israel has not permitted them to bring in the volume of food and aid that they would like to see and that scarcity means desperate people and gangs are looting these food trucks. Meanwhile, Israel does continue to strike Gaza and they're conducting ground operations still. And so data kept by Gaza health officials indicate the official death toll from this war surpassed 60,000 people this week and more than 18,000 of those dead are children.

[Martinez]

That's NPR's Emily Fang in Tel Aviv. Thank you.

[Unknown]

Thanks. A.

[Steve Inskeep]

And that's up first for this Thursday, July 31st. I'm Steve Inske and Amy Martinez.

[Martinez]

There is a remarkably easy way to stay connected to news and podcasts from the NPR network. It's the NPR app. You can hear community coverage from your local stations, stories from all over the world, and also podcast suggestions based on what you like. So download the NPR app in that App Store.

[Steve Inskeep]

Today's up first was edited by Rafael Nam, Ben Swayze, Hannah Block, Junaia Williams and Alice Wolfley. It was produced by Ziad Buch, Neo Dumas and Christopher Thomas. We get engineering support from Stacey Abbott and our technical director is Carly Strange. Join us again tomorrow. Foreign.

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