Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, senior editor Joe Sobczyk looks at the rift among Trump supporters over what to do about Iran. Sign up here and follow us at @bpolitics. Email our editors here.

Taking Sides

President Donald Trump is keeping his cards close on Iran.

“Nobody knows what I’m going to do,” he said today.

But the prospect that he might assist Israel to cripple the Islamic Republic’s nuclear program is opening fissures in his usually loyal MAGA base over what “America First” really means, as Bloomberg’s Mario Parker, Jamie Tarabay and Nancy Cook report.

The debate is playing out in Congress but mostly on social media among conservative media personalities and influencers who have the ears of many Trump voters.

After former Fox News host Tucker Carlson went on the podcast of another Trump stalwart, Steve Bannon, to warn against getting involved in another military conflict in the Middle East, Trump called him “kooky” on social media.

Other right-wing social media personalities also jumped in. Podcast host Matt Walsh wrote on X that it was “insane” to think that a majority of conservative voters would back a regime-change war.

Meanwhile, Laura Loomer, another MAGA acolyte who has Trump’s ear, jumped to the president’s defense.

In Congress, conservative hawks also weighed in. Republican Senator Ted Cruz got into his own confrontation on Carlson’s streaming show. Senator Lindsey Graham said he’d spoken to Trump and urged him to act against Iran.

Some other Republicans were taking a cue from Vice President JD Vance, who argued, essentially, that Trump has earned the benefit of the doubt about whether he was acting in the best interests of the US.

Bannon, a longtime populist Trump ally, told reporters that the fight with Iran is Israel’s to finish. But if Trump determines through American intelligence — not Israel’s — that the US needs to get involved and he makes the case to the American people, so be it. “The MAGA movement will support President Trump,” Bannon said.

Trump, as usual, has his finger on the pulse of his base.

“So I may have some people that are a little bit unhappy now,” he told reporters today, “but I have some people that are very happy.” — Joe Sobczyk

Don’t Miss

Federal Reserve officials left interest rates unchanged and continued to pencil in two rate cuts in 2025, saying uncertainty over the economic outlook was still high but had diminished.

A divided Supreme Court upheld a Tennessee law that outlaws certain controversial medical treatments for transgender children, preserving similar measures in other states and dealing a fresh blow to LGBTQ rights.

The Trump administration is pressing ahead with another tariff barrage that could effectively supplant country-by-country duties and result in import restrictions on almost all goods entering the US.

The administration is considering a change to IRS policies to allow the revocation of tax-exempt status for colleges that consider race in student admissions, scholarships, and other areas.

The top US bank regulators plan to reduce a key capital buffer for the biggest lenders after concerns that it constrained their trading in the $29 trillion Treasuries market.

New residential construction declined in May to the slowest pace since the onset of the pandemic as an elevated inventory of homes for sale and high mortgage rates sapped the motivation to build.

Applications for unemployment benefits ticked down last week, stabilizing near the highest levels in eight months.

The passage of stablecoin legislation in the Senate marks a huge leap forward for the potential mainstreaming of cryptocurrencies that track the US dollar one-to-one.

Nippon Steel closed its $14.1 billion takeover of US Steel, concluding an 18-month saga that became heavily politicized before the deal finally won Trump’s support.

Trump plans to extend the deadline for Chinese company ByteDance to divest the American operations of TikTok for a third time, allowing the social media app to keep running in the US.

Robert F. Kennedy Jr. is considering asking a government vaccine advisory panel to examine aluminum ingredients in shots, which could affect at least two dozen vaccines on the market

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., host Joe Mathieu interviewed New York Republican Representative Mike Lawler about the looming fight over the state and local tax deduction and whether the US should act now against Iran to eliminate its nuclear program.

For the program at 5 p.m., Joe and Tyler Kendall talk with Democratic Senator Elizabeth Warren of Massachusetts about the Fed decision.

On the Trumponomics podcast, host Stephanie Flanders, Bloomberg’s head of government and economics, speaks with Jennifer Welch, chief geoeconomics analyst for Bloomberg Economics, and Ziad Daoud, chief emerging markets economist and senior fellow at the Harvard Kennedy School, about how Israel’s surprise attack on Iran and the resulting war aren’t having the expected effects on energy markets. Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the Day

They’re seeing red at the Social Security Administration. The projected cash flow deficit — the difference what Social Security pays out and what it takes in through payroll taxes, taxes on payouts and interest — is projected to worsen rapidly in the coming years, according to the Social Security Trustees report released today. The longterm outlook is dire. The cash flow deficit this year is $243 billion and that will double by 2034. The intermediate scenario estimate shows the negative balance would exceed $9 trillion by the end of the century. In the absolute best case, the Trust Fund could remain solvent through at least 2100. Overall, the Trustees said the combined reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to have enough revenue to pay all scheduled benefits until 2034. — Alex Tanzi

What’s Next

Existing home sales in May will be reported Tuesday.

The Conference Board’s gauge of consumer confidence will be released on Tuesday.

New home sales in May will be reported on June 25.

Durable goods orders for May will be released June 26.

Pending home sales in May also will be reported June 26.

The Fed’s preferred inflation gauge for May, the core PCE deflator, is set for release June 27.

The University of Michigan’s final reading of consumer sentiment in June is scheduled for release on June 27.

The 90-pause for Trump’s reciprocal tariffs on most counties is scheduled to end on July 8.

Seen Elsewhere

Networks critical for the nation's infrastructure are on high alert for cyber threats that may grow out of the escalating conflict between Israel and Iran, according to Politico.
After student protests that followed Hamas' attack on Israel, Republicans in the Texas legislature reversed course on a 2019 law intended to guarantee free speech on campuses, the New York Times reports.
At least 11 states have imposed new rules for tenured faculty that would make it easier to fire them and lawmakers in some are proposing to abolish tenure altogether, the Washington Post reports.