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By Jonathan Allen

WASHINGTON — Congress wanted to honor the ailing Sen. John McCain, R-Ariz. President Donald Trump did not.

In extended remarks during a visit to Fort Drum in upstate New York to sign the John S. McCain National Defense Authorization Act for Fiscal Year 2019 — this year’s version of an annual bill that sets defense policy — Trump chose not to mention the former prisoner of war and Senate Armed Services Committee chairman who is battling brain cancer. He even omitted McCain’s name when citing the title of the bill.

The two men have long been fierce critics of each other, with McCain calling Trump’s supporters “crazies” in 2015 and Trump retaliating by questioning whether McCain, who was subjected to torture in a Vietnamese prison camp, is really a “war hero” because “he was captured.”

The snub at Fort Drum, home to the combat aviation brigade of the Army’s 10th Mountain Division, did not escape the notice of McCain’s allies.

“For those asking did I expect Trump to be an a—— today. No more than I expected it to be Monday,” Mark Salter, McCain’s longtime aide, wrote on Twitter.

McCain’s condition — dire enough that a recent HBO documentary on him was titled “John McCain: For Whom the Bell Tolls” — has not stopped Trump from deriding the Arizona senator at political rallies. Though Trump does not use his name, he tells crowds that he would have been able to repeal Obamacare if not for a thumbs-down sign from one senator — McCain.

The senator’s own statement included Trump’s name in the headline and in a preamble written by staff. But the words attributed to McCain did not.

“I’m very proud that the National Defense Authorization Act for Fiscal Year 2019 has been signed into law,” he said.

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Trump links Hong Kong protests to trade talks with China

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President Donald Trump on Wednesday linked the ongoing trade talks with China to the humane resolution of protests shaking the semi-autonomous territory of Hong Kong.

“Of course China wants to make a deal. Let them work humanely with Hong Kong first!” he said on Twitter.

In his remarks, the president appeared to suggest a personal meeting with Chinese President Xi Jinping to help resolve the crisis.

Trump also reiterated claims that “thousands” of companies were leaving China.

Trump also said China needed a trade deal more than the U.S., although China has argued otherwise. The comment followed his announcement that he was extending his Sept. 1 deadline for 10 percent tariffs on billions of dollars worth of Chinese imports such as cell phones, laptops and consumer goods until Dec. 15.

China’s Ministry of Foreign Affairs didn’t rule out a meeting in a statement to NBC News, saying the two heads of state have “maintained contact all along.”

“We hope that the U.S. side will meet half-way with the Chinese side, implement the consensus reached by the two heads of state in Osaka, and on the basis of equality and mutual respect and through dialogue and consultation,” said Hua Chunying, a spokeswoman to the ministry, referring to a Trump-Xi meeting on the sidelines of the G-20 economic summit in Japan in late June.

China’s economy — the world’s second largest — does appear to be cooling, with urban unemployment jumping to 5.3 percent in the first half of the year, compared with 5.1 percent in the same period last year.

Industrial output, meanwhile, was at a 17-year low in July while the yuan has slipped versus the dollar.

Reuters contributed.



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Is Trump right to blame the Fed for market plunge?

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It takes a lot to kill an economic expansion, typically requiring a major shock to bring growth to a halt and trigger a U.S. recession.

This week investors signaled that moment may have arrived, and one big question is whether that shock has come from President Donald Trump’s trade war or a mistake by policymakers at the Federal Reserve.

As bond markets flashed concern about recession on Wednesday and major stock indices cratered, Trump put the blame squarely on the Fed for continuing to raise rates through the end of last year. Even Trump foe and New York Times economics columnist Paul Krugman dinged the Fed for “a clear mistake.”

In raising interest rates four times last year “the Federal Reserve acted far too quickly, and now is very, very late,” in reversing itself and cutting borrowing costs only modestly so far, Trump tweeted. “Too bad, so much to gain on the upside!”

Earlier on Wednesday, White House trade adviser Peter Navarro told Fox Business Network the central bank should cut rates by half a percentage point “as soon as possible,” an action he claimed would lead “to 30,000 on the Dow.”

A cut of that magnitude would typically be associated with serious economic risk, not an economy with record low unemployment and ongoing growth.

The three major indices slumped by around 3 percent each by Wednesday’s close, with the blue chip Dow Jones Industrial Average suffering its largest percentage loss of the year. Bond investors pushed the yield on the 30-year Treasury bond to a record low.

Causing even more concern: The yield on the 2-year Treasury note briefly went above the yield on the 10-year Treasury note, the sort of “inversion” that, when it proves durable, has preceded prior U.S. recessions.

Trump himself took note of the development, blasting the Fed chair he appointed as “clueless” in a tweet citing the “CRAZY INVERTED YIELD CURVE.”

It was perhaps the most dramatic bit of evidence yet of just how the landscape for the Fed has changed over the past few months, from one that Chairman Jerome Powell deemed “remarkably positive” as of last October, to one of rising risks for the United States’ record-setting, decade-long expansion.

As of last fall, the Fed thought the economy, fueled by the Trump administration’s massive $1.5 trillion tax cut package and spending plans, would grow strongly enough to justify steadily higher rates.

At that point the threat of a recession seemed distant unless some sort of outside event intervened to throw the economy off course — something similar to the collapse of the dot-com stock market bubble ahead of the brief 2001 recession, or the implosion of the housing and credit markets ahead of the more serious 2007-2009 Great Recession.

Yet, as Trump’s trade rhetoric and his imposition of tariffs on trading partners ratcheted up this year, investors have acted as if a breaking point had been reached.

Global trade flows have dropped. Economic growth in Germany, a bellwether economy of sorts given its reliance on exports, contracted in the second quarter. Data also showed industrial output in China fell to more than a 17-year-low in July. Indices of uncertainty also have spiked.

If Fed policy suddenly seemed out of step, it was perhaps inevitable given the difficulty of keeping up with Trump’s whipsaw approach to trade policy, and the growing sense that the fallout may be deeper and longer lasting than expected.

“The challenge is that Trump’s trade policy has proven so erratic that you cannot relieve the sense of uncertainty,” as firms adjust to what may be a years-long rearrangement of global supply chains and cost structures, said Tim Duy, an economics professor at the University of Oregon. “So the question becomes is policy going to be easing enough … or remain so tight that the economy remains vulnerable?”

Investors in federal funds futures contracts are currently pricing in a quarter-point rate cut at each of the Fed’s remaining three policy meetings in 2019. That would take the benchmark fed funds rate to a range of between 1.25 percent and 1.50 percent.

Along with the rate cut at the last Fed meeting in July, it would also mean the central bank will have used up almost half the rate-cut “ammunition” assembled during a slow-moving, and ultimately truncated, series of rate increases begun in 2015.

For Trump, who is hoping to make the economy a central part of his case for his 2020 re-election campaign, further rate cuts could not come fast enough. He has been berating the Fed for its rate increases for more than a year — since even before his trade rift with China morphed from being considered an economic annoyance to a larger and potentially durable risk.

Compared to the prior two recessions, the Fed may actually be ahead of the curve.

In both the 2001 and 2007 downturns, the Fed raised rates even after the yield curve inverted and did not cut until just a few months before the start of recession about a year later.

In the current case, it signaled a policy shift in January, when it removed the expectation of further rate hikes from the table, and then cut rates two weeks before Wednesday’s yield curve inversion.

Whether that proves adequate is another matter.

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Israel bars Muslim Reps. Omar and Tlaib from visiting the country

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JERUSALEM — Israel said Thursday that it was barring two pro-Palestinian Democratic congresswomen from visiting the country, in a move that could strain relations between Prime Minister Benjamin Netanyahu and Democrats in Washington.

Reps. Ilhan Omar of Minnesota and Rashida Tlaib of Michigan have both been outspoken critics of Israel, and President Donald Trump tweeted shortly before the announcement that they should be prohibited from entering the country.

In a reversal of Israel’s position that all American lawmakers would be allowed to visit, Netanyahu said in a statement that the country had decided not to allow Tlaib and Omar to enter. The lawmakers, the first two Muslim American women elected to Congress, had been expected to arrive on Sunday.

“Only a few days ago, we received their visitation plan, and it became clear that they were planning a campaign whose sole purpose was to strengthen the boycott and negate Israel’s legitimacy,” Netanyahu said, referring to the pro-Palestinian Boycott, Divestment, Sanctions movement, known as BDS.

“For example, they defined their visit destination as ‘Palestine’ rather than ‘Israel,’ and unlike all Democratic and Republican congressmen to date, they have avoided seeking any meeting with an official Israeli official in both the government and the opposition,” the prime minister added. “A week ago, Israel welcomed some 70 Democratic and Republican congressmen who expressed broad bipartisan support in Israel, expressed just a month ago in overwhelming opposition to the congressional vote against the BDS. By contrast, the two-member congressional visitation plan shows that their intent is to hurt Israel and increase its unrest against it.”

But the itinerary of the two lawmakers involved no meetings with Israeli or Palestinians officials. They were instead planning to meet exclusively with human rights organizations and NGOs from both sides to get a non-political assessment of the situation on the ground.

In a statement, Omar slammed Netanyahu’s decision as an “affront” and accused him of bowing to pressure from Trump. A spokesman for the Israeli embassy refused to say if pressure from Trump influenced their decision to ban the congresswomen. Talking to reporters later on Thursday, Trump said he “did speak to people over there,” though he declined to say if he and Netanyahu spoke directly.

Omar and Tlaib have voiced their support for BDS; under Israeli law, supporters of the movement can be denied entry to Israel.

Referring to BDS as “economic warfare,” U.S. Ambassador to Israel David Friedman said that the administration “supports and respects” Israel’s decision.

“Representatives Omar and Tlaib are the face of the Democrat Party, and they HATE Israel!,” Trump said in a tweet later on Thursday.

Omar has also been criticized by House Democratic leaders for promoting “anti-Semitic tropes” and in February was forced to apologize for tweets about the pro-Israel lobby in the United States.

In one tweet, she said money was driving U.S. lawmakers to defend Israel and that AIPAC — the American Israeli Public Affairs Committee — was paying politicians to support Israel. AIPAC on Thursday criticized Netanyahu’s decision, saying in a tweet that, while they disagreed with the lawmakers’ views on Israel, “we also believe every member of Congress should be able to visit and experience our democratic ally Israel firsthand.”

Last month, Israel’s ambassador to the U.S., Ron Dermer, told the Times of Israel that the country would not block their trip.

“Out of respect for the U.S. Congress and the great alliance between Israel and America, we would not deny entry to any member of Congress into Israel,” Dermer told the Israeli newspaper.

A group of House Democrats— including House Majority Leader Steny Hoyer, Md. and House Appropriations Chairwoman Nita Lowey— had urged Dermer to allow the two congresswomen to visit, sources familiar with the discussion told NBC News.

Netanyahu held consultations with members of his Cabinet Wednesday about the congresswomen’s visit to Israel and the Palestinian territories, a government official said in a statement earlier Thursday. Hoyer said in a statement that he spoke with the prime minister on Wednesday, urging him to reconsider his decision.

Barring the congresswomen from entering risks further straining relations between Israel’s right-wing government, which has stressed its close ties with the Trump administration, and Democrats in Congress.

Tlaib, 43, was born in the U.S. but draws her roots from a Palestinian village in the West Bank where her grandmother and extended family still live. The congresswoman said she had hoped to visit her family during the trip.

Reacting to Thursday’s news, Tlaib paid tribute to her grandmother and said that Netanyahu’s choice “is a sign of weakness.”

Hanan Ashrawi, a veteran Palestinian politician, called it an “outrageous act of hostility against the American people.”

“This is a dangerous precedent that defies all diplomatic norms and an assault on the Palestinian people’s right to engage with the rest of the world,” she said in a statement.

Trump has repeatedly attacked Tlaib and Omar, including a series of tweets last month in which he said they should “go back” to the “broken” countries they came from. Trump’s comments drew sharp criticism from Democrats.

Both are U.S. citizens and are members of “the squad” of two other newly elected left-wing Democratic representatives, Alexandria Ocasio-Cortez of New York and Ayanna Pressley of Massachusetts.

Lawahez Jabari reported from Jerusalem, and Saphora Smith from London.

Reuters and Associated Press contributed.



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