| | | |  | | By Eli Okun | | Presented by |  | | | |  | THE CATCH-UP | | | 
With consumer confidence dropping, one big question is whether consumer spending softens next. | David Zalubowski, File/AP | CONFIDENCE GAME: U.S. consumer confidence fell to its second-lowest level ever dating back to 1952 in the latest University of Michigan monthly survey, per CNN’s Bryan Mena. That’s one of several economic warning signs flashing amid President Donald Trump’s aggressive trade war. By the numbers: The 11 percent drop in April, which brought consumer sentiment lower than it was during the Great Recession, reflects growing unease across demographic lines about what’s coming for unemployment and inflation — even as significant parts of the economy still look fairly solid for now. Americans’ inflation expectations over the next year leapt to the highest level since 1981. Still, one big question is whether worsening consumer sentiment will actually translate to softer consumer spending (it doesn’t always), which could weaken the economy. In the markets: Stock markets ticked up slightly today, per the WSJ. But as China responded to higher U.S. tariffs with another round of its own escalation, bond markets remained concerning, with 10-year Treasury yields rising past 4.5 percent. And the U.S. dollar fell again. Top Wall Street CEOs warned about economic chaos and uncertainty: BlackRock CEO Larry Fink said on CNBC that “we’re very close [to], if not in, a recession now.” More from POLITICO’s Michael Stratford and Victoria Guida … Plus Sam Sutton and Victoria on the bond market The art of the deal: USTR Jamieson Greer said on Fox News today that he’s speaking with Israel, Taiwan and Vietnam about trade negotiations. He told reporters that China is “not at this point” in that group, per CBS’ Jennifer Jacobs. Meanwhile, French President Emmanuel Macron warned that Trump’s 90-day pause on some tariffs is “fragile” and said Europe is “right to stand our ground — jobs and the future of our regions are at stake.” IMMIGRATION FILES: Federal judge Paula Xinis said the Trump administration must “take all available steps to facilitate the return” of Kilmar Abrego Garcia, whom they wrongly deported, in the wake of the Supreme Court upholding most of her order last night, per the AP. But lawyers for the government responded that they needed more time to review the decision and respond — and that they couldn’t provide more information about his location/status or their plans to bring him back to the U.S. “Foreign affairs cannot operate on judicial timelines,” the Justice Department insisted. Abrego Garcia’s attorneys warned that his life is in danger in El Salvador and that DOJ is showing a “stunning display of arrogance and cruelty.” Escalating quickly: The Justice Department’s aggressive defiance of Xinis’ demand for a plan — or even an explanation of the steps it has already taken — amounted to a defiance of the court and “threatened to erupt into a showdown between the executive and judicial branches,” NYT’s Alan Feuer writes. DOJ said her deadline was “impracticable.” The latest in-person court meeting just wrapped up with Xinis saying she’ll require daily updates from the government and rule ASAP, POLITICO’s Kyle Cheney reports live from Greenbelt, Maryland. Also happening today: “Khalil ruling to test Trump deportation tactic of sending detainees to Louisiana,” by WaPo’s David Nakamura: “Columbia University student Mahmoud Khalil’s attorneys were stunned when an immigration judge in Jena, Louisiana, announced this week that she would rule on whether he should be deported on Friday — three days after his initial court appearance.” ON THE WORLD STAGE: Special envoy Steve Witkoff flew to Russia today and met with President Vladimir Putin for the third time, as Axios’ Hans Nichols scooped. Moscow said they were discussing the efforts to wind down the war in Ukraine. The latest talks were an effort to kickstart progress in negotiations as Trump grows frustrated with Russia’s intransigence on ending its invasion: “Russia has to get moving,” the president posted this morning. Across the continent: At a meeting of the Ukraine Defense Contact Group in Brussels today, Defense Secretary Pete Hegseth attended virtually for the first time since the U.S. established the group in 2022, per NYT’s John Ismay. (Ukrainian President Volodymyr Zelenskyy also dialed in.) NATO allies pledged roughly $24 billion in military aid to Ukraine at the meeting, per NYT’s Steven Erlanger and Ivan Nechepurenko. Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line at eokun@politico.com.
| | | | A message from Comcast: Universal Epic Universe, the most technologically advanced theme park Comcast has built in the United States, is creating more American jobs and stimulating economic growth across the nation. Learn more about Comcast's multibillion dollar investment in the U.S. with the upcoming opening of Epic Universe. | | | | | | 8 THINGS YOU NEED TO KNOW | | 1. ANYWHERE FEELS LIKE HOME: Trump today issued an unexpected call for Congress to pass legislation establishing permanent daylight saving time. It’s a shift from Trump’s recent statement that it was a “50/50 issue”; now, he’s touting the popularity of changing an inconvenient and costly status quo. But as POLITICO’s Ben Leonard notes, there are divides on the Hill over whether to adopt permanent daylight saving time or permanent standard time. 2. 2026 WATCH: Iowa Gov. Kim Reynolds announced that she won’t run for reelection, an unexpected move that could trigger political reverberations in the state, the Des Moines Register’s Brianne Pfannenstiel reports. Reynolds cited the desire to spend more time with family. 3. BIG LAW FOLDS: Trump announced that five more law firms have reached deals with the administration to avoid the official retaliation he has sought to unleash on other firms. Kirkland & Ellis, Allen Overy Shearman Sterling, Simpson Thacher & Bartlett and Latham & Watkins all jointly agreed to do $125 million each in pro bono work for causes Trump supports. Cadwalader, Wickersham & Taft reached a separate $100 million agreement, the president said. More from CNBC 4. IRAN LATEST: NYT’s Farnaz Fassihi has the backstory on how Iran decided to engage in at least indirect nuclear talks with the U.S. Though Ayatollah Ali Khamenei long opposed the idea, the country’s president and judicial and legislative leaders sat down with him in March and “urged him to change course.” They even advised considering direct negotiations. Otherwise, they warned, Iran’s nuclear sites would be attacked, a larger war could spiral, and the Islamic Republic would face an existential threat. Now the countries will begin indirect talks in Oman tomorrow. Back in D.C.: DNI Tulsi Gabbard has tapped William Ruger for a crucial position that includes putting together the president’s daily intelligence brief, Axios’ Hans Nichols scooped. That’s notable because Ruger is fairly isolationist and dovish on Iran. His selection has privately rankled some Republican hawks.
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| | | | | 5. IN THE DOGE HOUSE: “Beyond Showerheads: Trump’s Attempts to Kill Appliance Regulations Cause Chaos,” by ProPublica’s Peter Elkind: “Trump appears to be attempting an end run that could succeed where his past attempts failed: by simply terminating the consulting contract that the Department of Energy relies on to develop and enforce the rules. In late March, DOGE’s ‘wall of receipts’ stated that it had ‘deleted’ a Department of Energy contract for Guidehouse LLP … This has produced confusion for everyone from appliance manufacturers to government officials to the contractors paid to enforce the rules. If the contract is indeed canceled … it would cripple the government’s efficiency standards program.” More cuts: HHS has fired the whole team that creates federal poverty guidelines, KFF Health News’ Arthur Allen reports. The loss of their specialized data expertise has raised fears that the administration will fail to update the levels properly, which could lead to low-income families losing government assistance. Hmm … “How DOGE may have improperly used Social Security data to push voter fraud narratives,” by NPR’s Stephen Fowler and Jude Joffe-Block: “Antonio Gracias, made the claims as part of larger misleading statements about the [Social Security Administration’s] enumeration-beyond-entry, or EBE program … Using Social Security data to imply that noncitizens are breaking the law also could have violated a court order that prevents DOGE staffers from handling sensitive SSA systems.” Reality check: Despite the Department of Government Efficiency’s slashing, federal government spending has actually increased overall since Trump took office, thanks to the inertia of debt interest payments and mandatory spending on programs like Medicare and Social Security, per WSJ’s Anthony DeBarros and James Benedict. 6. BACK TO EARTH: An early draft of Trump’s budget proposal, sent from OMB to NASA, calls for slashing the space agency’s science funds in half, WaPo’s Joel Achenbach and Christian Davenport report. The “passback” includes cuts of more than $3 billion, which would ax funding for the Nancy Grace Roman Space Telescope. An OMB budget draft also calls for massive cuts at NOAA that would “devastate weather and climate research,” slashing research programs by 75 percent and all but defunding some other offices, CNN’s Ella Nilsen reports. The budget is ultimately up to Congress. 7. FOR YOUR RADAR: “State tells employees to report on one another for ‘anti-Christian bias,’” by POLITICO’s Robbie Gramer and Nahal Toosi: “The [State Department] … will work with an administration-wide task force to collect information ‘involving anti-religious bias during the last presidential administration’ and will collect examples of anti-Christian bias through anonymous employee report forms. … Some State Department officials reacted to the cable with shock and alarm, saying that even if well-intentioned, it is based on the flawed premise that the department harbors anti-Christian bias to begin with, and warning it could create a culture of fear.” 8. KNOWING NATALIE WINTERS: “She’s Young, Trump-Friendly, and Has a White House Press Pass,” by NYT’s Andrew Trunsky: “At 24, Ms. Winters has been a White House correspondent since Jan. 28. She reports for [Steve] Bannon’s ‘War Room’ podcast … Since Mr. Trump’s reascension, her profile has skyrocketed to the point where she says she is recognized in restaurants and airports. She says her parents have been surprised by her often combative onscreen persona. ‘It’s such a different version of myself than I am in my day-to-day life,’ she said, adding, ‘I don’t even recognize myself.’”
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From 2019-2023, Universal Orlando generated $44 billion in economic impact for the nation. Learn more. | | | | | | TALK OF THE TOWN | | Tommy Tuberville reportedly skipped the confirmation vote for Dan “Razin” Caine to go to the Masters. Peter Doocy had to fend off a bird that landed on his head while live on air. TRANSITIONS — Daniel Schuker has been named executive director of Georgetown Law’s Institute of International Economic Law. He most recently was deputy policy director for the Harris campaign. … Mary Wentworth is now an associate at SMI. She previously was military legislative assistant and policy adviser to Rep. Terri Sewell (D-Ala.). … Future Caucus has added Amos Rothstein as membership director and Xavier Lopez as senior membership manager. Rothstein previously was campaigns director at Unite America and is a former Idaho GOP executive director. Lopez previously was an investor relations associate at New Profit. WELCOME TO THE WORLD — Emily Baldwin, advocacy manager at Arnold Ventures, and Stephen Baldwin, a developer at Rockdove Solutions, recently welcomed Skyler Baldwin. He came in at 7 lbs, 12.8 oz. Pic … Another pic Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us at 202-556-3307. Playbook couldn’t happen without our deputy editor Zack Stanton and Playbook Daily Briefing producer Callan Tansill-Suddath. Correction: Yesterday’s Playbook PM misspelled Lisa Kashinsky’s name.
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