| | | |  | | By Jack Blanchard with Dasha Burns | Presented by the National Retail Federation | With help from Eli Okun and Ali Bianco On today’s Playbook Podcast: Jack and Dasha discuss the independence of the Fed, America’s response to the protests in Iran and the latest from Minnesota, where protests continue after last week’s deadly ICE shooting.
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| Good Monday morning. This is Jack Blanchard. Get in touch. LOOK WHO’S BACK: Elon Musk takes another step toward full rehabilitation within the Trump administration today, appearing in public alongside Defense Secretary Pete Hegseth in Texas. The Defense Department is billing Hegseth’s address to staff at SpaceX HQ as the “third major speech” of his tenure and a “direct follow-up” to his controversial address to military leaders at Fort McNair last fall. But it’s the presence of Musk alongside such a senior Cabinet official that really catches the eye, marking just the latest step in the world’s richest man’s return to the fold after his spectacular falling-out with the president. Musk and Donald Trump first reunited — albeit briefly — last September at the funeral of Charlie Kirk, and relations grew steadily warmer through the final months of the year. In November, Musk bagged an invite to the White House dinner held for Saudi Crown Prince Mohammed bin Salman. By December, Musk had started donating to Republicans again, per Axios. The Trump administration also announced sanctions on several of Musk’s foes, including former EU official Thierry Breton and online transparency campaigner Imran Ahmed. Finally, Musk and Trump dined together on the Mar-a-Lago patio in early January. Now Musk is getting involved in policy again, albeit through his multibillion-dollar private interests. Speaking on Air Force One last night, Trump said he may call on Musk to deploy his Starlink internet service to help Iranian anti-regime protesters. And today Musk hosts Hegseth for an address on how “Pentagon bureaucracy” is holding the nation back — by damaging firms like SpaceX. In today’s Playbook … — Two big things to watch as Trump and Jerome Powell go to war. — Trump claims Iran wants to cut a deal before possible U.S. action. — Administration doubles down in Minnesota, with more federal agents sent in.
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Fed Chair Jerome Powell is the latest target of President Donald Trump's Justice Department. | Francis Chung/POLITICO | WHAT WE’RE WATCHING: There are only two reactions that matter following last night’s bombshell news that Trump’s Department of Justice is weighing criminal charges against Federal Reserve Chair Jay Powell. That of the financial markets, and of the congressional GOP. First up: Stocks, bonds and the value of the dollar are all worth monitoring closely today in case this latest Trump-shaped blow to Fed independence triggers an economic reaction. In truth, markets have been pretty chill about Trump’s volatility since the epic “TACO” trade U-turn of April 2025, so it could well be that not much moves today. Equally, it’s worth remembering that Treasury Secretary Scott Bessent talked Trump out of attempting to fire Powell last year specifically due to concern about the market response — so don’t rule it out. Second: Just as important today will be the reaction from Hill Republicans, who after a muted start to the Trump 2.0 project are showing an increasing willingness to stand up to the president. Just last week, five Senate Republicans voted to rein in Trump’s military actions in Venezuela, the first time he’s faced such strident opposition in the chamber. And remember: Congress does hold a key lever of power in this battle. All Trump’s nominations for positions on the Federal Reserve board — including Powell’s replacement as chair later this year — require Senate approval. It would take four GOP rebels to block any appointment, assuming every Dem votes against. And here’s the first one: Sen. Thom Tillis (R-N.C.) — a thorn in Trump’s side for much of the past year as he eyes retirement — was first out of the traps last night, accusing the Trump administration of “actively pushing to end” Fed independence. Tillis pledged to oppose any future Trump nominee for the Fed until the current matter is resolved. More from POLITICO’s Inside Congress As senators return to D.C. today, the question is whether more are prepared to follow his lead. Worth watching: Sen. Lisa Murkowski (R-Alaska), who voted against Trump’s last Fed nomination, Governor Stephen Miran, on the grounds he was insufficiently independent from the White House. “Anything that would compromise even the perception of independence, I was looking at very carefully,” she said following Miran’s 48-47 confirmation vote last September.
| | | | A message from the National Retail Federation: After delivering the biggest holiday season in history, global retail leaders continue the momentum at NRF 2026: Retail's Big Show. More than 40,000 global retail industry leaders and innovators from more than 100 countries are convening in New York City for three days of networking, learning and exploring cutting-edge technology solutions. To learn more, visit here. | | | | TIME FOR A RECAP: For those of you too glued to the NFL playoffs or the Golden Globes last night to notice yet another massive news story erupting (yes, 2026 really is just 12 days old), Powell posted a video shortly after 7:30 p.m. confirming breaking reports that the DOJ has opened a criminal investigation into his conduct. Its focus will be comments he made to Congress last year regarding the Fed HQ’s multibillion-dollar upgrade. Jay’s way: Powell has largely tried to avoid responding to Trump's torrent of insults over the past year, maintaining a dignified silence while sticking to his guns on interest rates. But last night he met the DOJ assault head-on. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said bluntly. “Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.” Hearing such a frank assessment from the normally technocratic, non-pugnacious Powell was jarring. Supporting Powell’s assessment is the fact that Trump’s DOJ has spent the past few months trying — albeit with little success — to prosecute several of the president’s perceived enemies, including former FBI chief James Comey, New York AG Letitia James and Powell’s colleague on the Fed board, Lisa Cook. Indeed, Cook’s case is due before the Supreme Court later this month. The Powell case very much follows the Comey playbook, with the DOJ seeking to find discrepancies in a high-ranking public servant’s past testimony to Congress. (Comey’s case has since been thrown out by the courts.) Trump insists he had nothing to do with the decision to pursue Powell, telling NBC News last night: “I don’t know anything about it.” But but but: The president’s plea of ignorance is somewhat undermined by the fact he told reporters only a fortnight ago that Powell could face unspecified criminal charges. The really odd thing about this whole situation is that Powell’s term is almost at an end, and he’ll be standing down as chair in May regardless. So why not wait? One theory is that administration officials want to ensure he doesn't stick around on the Fed board until his term as governor ends in 2028. The bigger picture here is that this latest news bombshell —- just like the arrest of Nicolás Maduro, Trump’s persistent threats toward Greenland’ and the fatal shooting of Renee Good by an ICE officer in Minnesota — will again distract from White House efforts to focus voters’ attention on the cost of living. New inflation data is out tomorrow and Trump will mark the occasion with another pit stop on his “affordability” tour — a speech about factories and trade in Detroit, Michigan. Now another Fed crisis will hang over it all … Susie Wiles must be thrilled.
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| | | | AMERICA AND THE WORLD ALL EYES ON IRAN: Trump will host Secretary of State Marco Rubio at the White House at 10:30 a.m. as protests and uncertainty rage in hotspots around the world. The president told reporters on Air Force One last night that “the leaders of Iran called” on Saturday and “want to negotiate” over a potential nuclear deal, following threats from the White House of a possible military response to Iran’s crackdown on protesters. Trump said a summit is “being set up” but warned: “We may have to act before a meeting.” Options appraisal: Trump said he’s already being briefed hourly on the situation on the ground, but he will sit down tomorrow with Rubio, Hegseth, Joint Chiefs Chair Gen. Dan Caine and other top officials to kick around detailed proposals. “The military is looking at it, and we’re looking at some very strong options,” Trump said. Iranian leaders have warned the U.S. against taking action. On the ground: A U.S.-based human rights group said the death toll in Iran has now topped 500 — mostly protesters killed by the government, as well as dozens of security personnel — while close to 11,000 people have been arrested in the past couple of weeks, per Reuters. CUBA: Trump also stepped up his threats against Cuba yesterday, warning on Truth Social that the country was newly vulnerable after the U.S. seized partial control of Venezuela. “THERE WILL BE NO MORE OIL OR MONEY GOING TO CUBA,” he wrote. “I strongly suggest they make a deal, BEFORE IT IS TOO LATE.” Cuban President Miguel Diaz-Canel fired back that the country was “ready to defend the homeland to the last drop of blood.” More from Reuters GREENLAND: U.S. and Danish officials will meet Wednesday to discuss Greenland as Trump saber-rattles here too, CBS’ Margaret Brennan reports. On the flip side, Sen. Tim Kaine (D-Va.) said on CBS’ “Face the Nation” that if necessary, he’ll force another war powers vote to prevent Trump from taking military action on Greenland. The U.K. and Germany are considering putting troops in Greenland, via a joint NATO mission, to send a message to Trump, Bloomberg’s Alberto Nardelli and colleagues report. VENEZUELA: Trump (jokingly?) posted an image on Truth Social that declared him acting president of Venezuela. More seriously, he slammed ExxonMobil for voicing some concern about his Venezuela oil plans at Friday’s White House meeting — and said now he’s “inclined” to leave them out of an oil deal. AND THE RUBIO PROFILES KEEP ON COMING: “How Trump’s capture of Maduro can be traced to Marco Rubio’s boyhood front porch,” by CNN’s Steve Contorno … “How Marco Rubio Went from “Little Marco” to Trump’s Foreign-Policy Enabler,” by The New Yorker’s Dexter Filkins: “As Trump lurches from one crisis to another, Rubio — calm, articulate, and capable of projecting a Boy Scout’s earnest charm — justifies his policies, soothes rattled allies, and puts the best face on initiatives that only a few years ago he would have denounced.” ON THE HILL MORE ICE FALLOUT: The Senate is moving ahead with bipartisan funding plans — but a deal on Homeland Security has been dropped from the package due to increasingly bitter clashes with Democrats over immigration enforcement. The Senate will today take up three appropriations bills to fund parts of the government through the rest of the fiscal year, with a procedural vote on Commerce-Justice-Science, Energy-Water and Interior-Environment at 5:30 p.m. Coming next down the line are State-Foreign Operations and Financial Services, for which appropriations leaders released bipartisan compromise text last night, POLITICO’s Jennifer Scholtes and Katherine Tully-McManus report for Pros. But the Homeland Security bill was dropped from the package, as Roll Call’s Aidan Quigley and Aris Folley scooped, after Democrats stepped up their insistence on more ICE restrictions following last week’s shooting. Next steps: As the Senate votes on the first minibus, House GOP leaders could bring the new package up for a floor vote as soon as Wednesday. But fiscal hawks’ anger over earmarks could throw up roadblocks in either chamber, as could Colorado Democrats who insist that Trump erase cuts to a climate lab. Reminder: Several more funding bills, accounting for the majority of federal spending, still need to be passed to stave off a government shutdown at the end of January. That’s now less than three weeks away. BILL OF HEALTH: Senators trying to iron out a bipartisan deal on Affordable Care Act subsidies have said they could release a draft framework as soon as today. This morning, POLITICO’s Jordain Carney profiles the man at the center of the talks: Sen. Bernie Moreno (R-Ohio), a bit of an unlikely presence in a group that includes many longtime Senate dealmakers. Moreno is a freshman and a MAGA stalwart, but he is close with Trump and says he sees helping Americans with high costs as “America First.” N.B.: Moreno says he intends to get 35 Republican votes for an eventual bill. TALES FROM THE CRYPTO: Significant cryptocurrency legislation is also due to be unveiled today in the Senate — and Coinbase warned that it might pull its support for the bill if it puts too many restrictions on giving rewards to people with stablecoins, Bloomberg’s Emily Mason and colleagues scooped. A markup is expected in committee Thursday.
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| | | | BEST OF THE REST DOUBLING DOWN: The Trump administration is sending hundreds more federal agents to Minneapolis today, with a focus on protecting immigration enforcement and allowing the ICE crackdown to continue, DHS Secretary Kristi Noem said on Fox News. But another dramatic incident caught on video has shaken Minneapolis — this time of agents pepper-spraying protesters and then ramming through a door to capture a man inside, AP’s Rebecca Santana and colleagues report. First in Playbook: Trump’s new emphasis on fraud claims, both proven and unproven, is turning into his latest cudgel to choke off federal money for Democratic-led states, POLITICO’s Blake Jones and colleagues report. Many Democrats say this is pure revenge against his enemies — with actions that punish ordinary recipients of federal aid. But the party is divided over whether to dismiss his claims as baseless or focus on showing voters they’re taking fraud concerns seriously. POLL POSITION: Gallup’s annual survey of Americans’ political leanings shows the percentage of adults identifying as independent surged to a record-high 45 percent last year. Twenty-seven percent each consider themselves Democrats and Republicans. Ideologically, more Americans say they’re conservative than say they’re liberal, as usual — but the seven-point gap is the smallest it’s been dating back to 1992. IT’S THE AFFORDABILITY, STUPID: Sen. Elizabeth Warren (D-Mass.) has a tough message for her party today: Democrats are “doomed to fail — in 2026, 2028 and beyond” — if they don’t stop tiptoeing around donors and corporations and embrace a populist economic platform. That’s the focus of a speech Warren will deliver at 10:30 a.m. at the National Press Club, per excerpts provided to POLITICO’s Lisa Kashinsky. “A tepid, nibble-around-the-edges approach earns praise from Jamie Dimon and other Wall Street and Big Tech CEOs,” Warren plans to say. “But it doesn’t take a political genius to conclude that in a democracy, when the choice is between ‘make the rich richer’ and ‘help everybody else,’ winning elections is about choosing ‘everybody else.’” FIRST IN PLAYBOOK — Empire State of mind: The New York state Senate today is poised to pass a bill authored by state Sen. James Skoufis moving its April primary up to Super Tuesday in 2028. The state has only been included on Super Tuesday three times since 1984. “It’s all about relevance,” Skoufis told Playbook. “Historically, the only time we see presidential candidates, whether it’s for primaries or otherwise here in New York is when folks want to fly in and collect money from donors in Manhattan penthouses and corporate boardrooms. Meanwhile, we’re stuck on the sidelines during the nominating process.” FIRST IN PLAYBOOK — Trail mix: Morgan Murphy, a former Trump administration official and Sen. Tommy Tuberville (R-Ala.) staffer, raised $1,057,949 in the first quarter of his race to replace Tuberville. The first-time candidate reported more than 10,000 contributions from over 6,700 donors across all 50 states … Maine Gov. Janet Mills is launching a statewide “Candid Conversations Tour” in her Senate primary. The tour will kick off this week with an event in Portland. MORE FROM THE TRAIL: Maine state Sen. Joe Baldacci is launching a Democratic congressional campaign in the 2nd District, which Dems are trying to hold onto as Rep. Jared Golden leaves office. … Sen. John Cornyn (R-Texas) raked in a record $7 million during the fourth quarter of his reelection campaign, per POLITICO’s Liz Crampton. … California AG Rob Bonta has opted against a gubernatorial bid, POLITICO’s Melanie Mason and Rachel Bluth scooped. … Peter Thiel has donated $3 million toward the effort to keep a wealth tax off the California ballot this fall, NYT’s Teddy Schleifer and Ryan Mac report.
| | | | A message from the National Retail Federation: Live from NRF 2026: Retail's Big Show, we released the latest CNBC/NRF Retail Monitor monthly sales data. December retail sales reflect a record holiday season, and the retail industry will continue building on this momentum with strong growth in 2026. The NRF Center for Retail & Consumer Insights offers real-time, best-in-class data from trusted partners. For more comprehensive, detailed and timely insights into the mindset and behavior of consumers and the retailers that serve them, visit the NRF Center for Retail & Consumer Insights. | | | | | | TALK OF THE TOWN | | NEWS FROM LA LA LAND — “The Golden Globe for Best Editing goes to … the Justice Department,” quipped awards host Nikki Glaser last night, in reference to the redactions in the Jeffrey Epstein files. “And the award for Most Editing goes to … CBS News.” (This caused quite a stir, given the awards show was literally airing on CBS. But she continued unabashed.) “CBS News,” Glaser added. “America’s newest place to see BS news.” TRUMP INC. — “Trump Organization deepens Gulf push with $10bn in Saudi projects,” by the FT’s Ahmed Al Omran in Jeddah: “Real estate developer DarGlobal, which has partnered with the Trump Organization in the past, said on Sunday the latest $7bn project would include a Trump-branded hotel and golf course as part of Diriyah, a $63bn development backed by the Saudi sovereign wealth fund. The two businesses are also working on a $3bn Trump Plaza tower in Jeddah that will include offices, high-end apartments and town houses.” IN MEMORIAM — “Richard Codey, ex-governor who was New Jersey's longest-serving lawmaker, dies at 79,” by POLITICO’s Dustin Racioppi: “Richard Codey, who served as acting governor of New Jersey and was the state’s longest-serving lawmaker, died Sunday. He was 79. His family announced his death, ‘after a brief illness,’ on his Facebook page. … A colorful fixture of New Jersey politics who coached youth basketball in his free time and was a leading advocate for mental health awareness and funding, Codey largely withdrew from public life after retiring from the state Senate in January 2024 after half a century in the Legislature.” TRANSITIONS — American Policy Ventures has added Gray Rixey as director of government affairs, Matthew Diaz as chief of staff, Valerie Shen as a fellow and Ari Gerstam as VP. … Ryan Danks is now a partner at WilmerHale. He previously worked for the Justice Department’s Antitrust Division. … Kerry McConnon is now a partner at ColdSpark. He previously worked at Prolegis and is a DDC Public Affairs alum. … … Blake Gober is taking over as campaign manager for Rep. Andy Barr’s (R-Ky.) Senate campaign, following the death of campaign manager Tatum Dale over the holidays. Gober most recently worked at RunSwitch PR. … Katie Heller is now chief of staff for Rep. Sara Jacobs (D-Calif.). She previously was deputy chief of staff. … Jonathan Heppner is now an SVP at SKDK. He previously worked for New York state Senate Majority Leader Andrea Stewart-Cousins. HAPPY BIRTHDAY: Jeff Bezos … Rep. Cliff Bentz (R-Ore.) … Christiane Amanpour … Nathalie Rayes … Ryan Murphy of the House Ways and Means GOP … Sarah Karlin-Smith … American Society of Landscape Architects’ Torey Carter-Conneen … CAP’s Sam Hananel … Danny O’Brien of Hanwha … Doug Thornell of SKDK … Stephanie Taylor of the Progressive Change Campaign Committee and Progressive Change Institute … The Jewish Majority’s Jonathan Schulman … Madeline Osburn … Basil Smikle … John Aloysius Farrell … Jami LaRue of Rep. Jim Clyburn’s (D-S.C.) office … Alicia Porile of Sen. Lisa Blunt Rochester’s (D-Del.) office … Michael B. Williams … Howard Stern … Robin Goodstein of Careerstone Group … POLITICO’s Dylan Pesce Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us on Signal here. Playbook couldn’t happen without our deputy editor Garrett Ross. | | | | Follow us on X | | | | Subscribe to the POLITICO Playbook family Playbook | Playbook PM | California Playbook | Florida Playbook | Illinois Playbook | Massachusetts Playbook | New Jersey Playbook | New York Playbook | Canada Playbook | Brussels Playbook | London Playbook View all our political and policy newsletters | | Follow us | | | |
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