Washington argues over prices and time, while New York counts the cost of its own government

01 A promise, and its limits

Prices have been rising at more than double the pace the Federal Reserve considers healthy. The central bank’s preferred inflation gauge, which tracks what households actually pay for goods and services, rose 4.1 percent over the year through May, up from 2.5 percent a year earlier, and a core measure that strips out volatile food and energy reached 3.4 percent.[2] In testimony delivered as part of the Fed’s twice-yearly report to Congress, Chair Kevin Warsh said the institution has “no tolerance for persistently elevated inflation” and called it an “undue burden on American households and businesses.”[1]

He took office in late May, having been confirmed to succeed Jerome Powell, and this was his first appearance before lawmakers as chair.[3][6] He described the broader economy as solid, noting a labor market that has held steady with unemployment at 4.2 percent and continued hiring, and he pointed to a firmer recent inflation reading without declaring the fight won.[6][2] He declined to say when the Fed might cut interest rates, arguing that committing in advance would tempt policymakers to notice only the data that confirmed the plan.[6] For now the benchmark rate sits between 3.5 and 3.75 percent, where the rate-setting committee left it in June.[8]

02 Who the chair works for

The sharper exchange was about independence. President Trump chose Warsh after publicly pressing the previous chair for lower rates, and installed him with the stated hope of cheaper borrowing costs.[4] When Representative Nydia Velázquez asked, in effect, whether he now works for the president, Warsh answered that “we’re an independent central bank,” and noted that Congress, not the White House, granted the Fed that authority.[6] The president had eased his public demands as inflation pushed past 4 percent, a sign of how the politics shift when rising prices, rather than high interest rates, become the immediate problem.[5]

03 The tariff wildcard

Part of the recent climb traces to trade policy. The Fed’s report to Congress found that tariff increases contributed to faster price growth in categories such as appliances and electronics, feeding costs through to store shelves.[2] That pressure was blunted in February, when the Supreme Court struck down a broad set of tariffs the administration had imposed under an emergency-powers law, a ruling that lowered the average U.S. tariff rate and, by the Fed’s account, pulled some import prices back down.[7][2]

The stakes reach beyond Washington. Rates held higher for longer keep mortgages, car loans and business borrowing expensive, which cools the economy but also tests the patience of a White House that campaigned on relief.[5] The next decision comes at the end of July, when the committee meets on the 28th and 29th, and the choice Warsh described as purely technical will be read, inevitably, as a political one.[9]

Lawmakers approved the measure by a wide margin, 308 to 117, in a vote recorded on July 14.[1] The bill, named the Sunshine Protection Act and sponsored by Representative Vern Buchanan of Florida, would make daylight saving time permanent and eliminate the spring-forward, fall-back switch that most of the country performs each March and November.[2] Its backers cast it as a small, popular fix, and the committee chairman who moved it said the vote answered “constituents’ calls” to “lock the clock.”[2] President Trump has endorsed the bill and said he would work to see it signed.[4]

The change would rearrange daylight rather than create more of it. Permanent daylight time means later sunsets in winter and, with them, later sunrises, so that in northern cities the sun would come up well after the start of a workday or a school run.[3] Under current federal law states may exempt themselves and stay on standard time, as Hawaii and most of Arizona do, but they cannot choose permanent daylight time on their own, and the bill would remove that barrier for everyone at once.[4]

The tally cut across the usual party lines. Republicans backed the bill almost unanimously, Democrats divided nearly evenly, and the opposition made its argument about mornings rather than clocks.[1] Representative Mary Gay Scanlon warned that under the plan “millions of Americans will wake up during the winter months in complete darkness,” and Representative Jim McGovern questioned whether the clock was really the most pressing thing on the country’s agenda.[3]

Whether the bill becomes law now turns on the Senate, which has been here before from the opposite direction. Senators passed a permanent-daylight-time bill by unanimous consent in 2022, only for it to stall in the House, and this time the roles are reversed and the outcome again uncertain.[3][5] Polling helps explain both the appetite to act and the difficulty of finishing. About 56 percent of adults told an AP-NORC survey they would prefer permanent daylight time and its extra evening light, while roughly 40 percent favored permanent standard time and its brighter mornings.[3] The country largely agrees it is tired of changing the clocks. It has yet to agree on where to leave them.[3]

The people who govern the city will soon be paid noticeably more. On a vote of 42 to 6, with Speaker Julie Menin abstaining, the Council raised the base salary of its own members from $148,500 to $175,500, a jump of $27,000.[2] The increase, the first since 2016, also lifts the pay of the mayor, the comptroller, the public advocate, the five borough presidents and the district attorneys.[1]

The raise did not originate inside the Council. A three-member advisory commission, convened in the spring by Mayor Zohran Mamdani and chaired by the former development official Carl Weisbrod, recommended the figure in June after finding that consumer prices in the New York region had risen roughly 31% since the last adjustment.[4] The 18.2% it settled on reflects inflation compounded over the years since most current officeholders took their seats, an amount the panel described as what pay would need to rise simply to hold its value.[1]

Two of the beneficiaries turned the money down. Mamdani, whose office would otherwise draw $305,800, and Menin, the speaker, both said they would not accept the higher salary.[3] Six members voted no, among them a bloc of the Council’s Republicans and conservative Democrats who objected to lawmakers setting their own compensation.[2]

An earlier version of the bill would have tied future salaries to an automatic cost-of-living formula that rose whenever a mayor failed to convene the pay commission.[5] Good-government groups that otherwise backed the raise, including Citizens Union and Reinvent Albany, warned that the mechanism would let officials sidestep a public vote on their own pay, and the Council stripped it out before final passage.[5] The higher salaries are expected to take effect as soon as next month.[2]

The state’s books balance this year, but partly by leaning on money it cannot count on again. In his review of the enacted budget, Comptroller Thomas DiNapoli found that spending rose about 7% to $277 billion while recurring revenue barely moved, a mismatch his office projects will widen into cumulative deficits of roughly $31.8 billion across the 2028 through 2030 fiscal years.[3] That is some $4.1 billion deeper than the shortfall the state projected as recently as January.[4]

The imbalance is structural, meaning recurring programs are being paid for with money that will not return. To close this year’s books the state plans to draw about $1.3 billion from its general fund balance, and its principal rainy-day reserves are holding flat near $15 billion rather than rising alongside a larger budget.[1] DiNapoli cast that as a thin cushion for a state whose finances, in his words, “remain highly exposed to federal actions and potential economic downturns.”[2]

The largest uncertainty comes from Washington. A federal budget law enacted last year, catalogued as Public Law 119-21, is already reshaping health coverage in the state, which expects to preserve insurance for more than a million residents but estimates that roughly 450,000 will lose eligibility.[1] Medicaid spending is on track to climb from $39.4 billion to $53.3 billion by the end of the decade, and looming cuts to nutrition assistance threaten to push further costs onto Albany and its counties, pressures that could widen the gap well beyond the baseline figure.[1]

The comptroller also flagged a quieter shift in how the state spends. The enacted budget exempts roughly $4.5 billion in contracts from competitive bidding, weakening the oversight his office normally brings to state purchasing.[1] He urged lawmakers to begin identifying savings and rebuilding reserves now, warning that a structural imbalance and stagnant reserves leave New York with little room to absorb the next downturn.[3]