Federal Reserve is expected to raise its benchmark rate, defying Trump's demands

WASHINGTON (AP) — The Federal Reserve is widely expected to lift its short-term interest rate for the first time in three years to fight stubbornly high inflation. Such a move Wednesday would put the central bank at odds with President Donald Trump’s demands. An increase in the Fed’s rate, currently about 3.6%, isn’t guaranteed but most analysts and economists expect a hike after a speech two weeks ago in which Fed Chair Kevin Warsh argued that the central bank had not yet achieved its goal of putting inflation in check.

US stocks slip after oil prices and the bond market crank up the pressure

NEW YORK (AP) — The U.S. stock market slipped as oil prices and the bond market cranked up the pressure on Wall Street. The S&P 500 fell 0.4% Tuesday. The Dow Jones Industrial Average dropped 0.6%, and the Nasdaq composite sank 0.8%. They felt pressure as the yield on the 10-year Treasury climbed with oil prices. Higher yields mean everyone must pay more in interest to borrow money, which slows the overall economy. They also make people less willing to pay high prices for stocks because they can earn more from sitting in bonds, which are considered safer investments.

As the world debates the risks of AI, China closes the technology gap with the US

HONG KONG (AP) — The rapid development of artificial intelligence has sparked renewed debate about its risks, with both the United States and China expressing concerns. Experts say China has emerged as a significant AI contender and nearly closed the gap with the U.S. Chinese AI models challenging U.S. counterparts include Moonshot AI’s Kimi and Z.ai’s GLM. The developments have gained importance ahead of an expected visit to Washington this month by Chinese President Xi Jinping. China has expressed worries about AI's risks to security and governance. The U.S. accuses China of extracting capabilities from American AI models, a claim China denies.

Carney says Canada can wait for the right conditions in Trump trade war and emerge stronger

TORONTO (AP) — Canadian Prime Minister Mark Carney says Canada intends to emerge from its trade war with U.S. President Donald Trump “stronger, more resilient, more independent,” while telling Washington that future cooperation must be based on respect for each country’s sovereignty. Carney told global investors that Canada’s reputation as a reliable partner has become more valuable in a world where economic relationships are increasingly transactional and “zero-sum.” He also announced that Ottawa will seek private investment to operate Canada’s four largest airports under long-term concessions while retaining public ownership, a move he said could raise tens of billions of dollars for infrastructure.

Maduro ally Alex Saab pleads guilty in a $195M money laundering case, agrees to cooperate

MIAMI (AP) — A close ally of ousted Venezuelan President Nicolás Maduro has pleaded guilty to bribing officials to secure contracts for importing food during Venezuela's crisis. Alex Saab was deported to the U.S. in May and pleaded guilty to money laundering Tuesday. He was charged in 2019 and arrested in Cape Verde during a refueling stop. President Joe Biden pardoned him in 2023 in exchange for the release of Americans in Venezuela. U.S. officials describe Saab as Maduro’s “bag man” and may use him as a witness against Maduro, who faces drug charges. The case unfolds as the Trump administration focuses on Venezuela's oil reserves.

Senate blocks cryptocurrency regulation as Democrats push back on Trump investments

WASHINGTON (AP) — Senate Democrats have blocked legislation to create a new regulatory framework for cryptocurrency. In doing so, they are stalling an industry-backed effort to place new guardrails around digital assets after demanding more limits on President Donald Trump’s investments. Tuesday's vote was a pivotal election-year test for the $2.3 trillion cryptocurrency market and came as Trump has amassed significant crypto wealth while in office. While some Democrats are friendly toward the industry and support the idea of regulation, they have been adamant that the bill include strong ethics safeguards to prevent Trump and his family from enriching themselves in office.

Saudi crown prince goes to Egypt for support against Houthi strikes, and other Mideast developments

Saudi Arabia’s crown prince is reaching out to Egypt for support against Yemen’s Houthi rebels who have disrupted key avenues of commerce, contributing to a spike in the global cost of oil. Egypt is unlikely to offer military help to Saudi Arabia but the country is influential in the Arab world and can help rally support. Yemenis, meanwhile, are trying to flee violence in that country by crossing the Red Sea, but the high cost of fuel is a factor. Houthi rebels are fighting Saudi Arabia and Yemen's internationally recognized government.

Photographer Chick Harrity, who documented history for AP from Vietnam to the White House, has died

NEW YORK (AP) — Photographer Chick Harrity, who documented the Vietnam War and eight sitting U.S. presidents for The Associated Press and U.S. News and World Report, has died. He was 87. Harrity took one of the best-known photographs of the Vietnam War, of a baby girl lying in a box alongside her brother in Saigon. An eighth-grade teacher in his hometown of Reading, Pennsylvania. urged Harrity to pick up a camera, launching him on ‘a lifelong journey documenting the world around him,’ his family wrote in an online obituary. Harrity started his career in 1956 at a Reading newspaper and went on to spend 26 years at the Associated Press, 13 of them in the Washington bureau. He then became chief photographer at U.S. News and World Report.

China can block citizens from leaving the country over national security or tech export violations

BEIJING (AP) — China has introduced new border control rules that could ban citizens from leaving the country if they engage in illegal activities threatening national or industrial security. The rules that took effect Tuesday reflect concerns about technology exports at a time of competition with the U.S. in areas like artificial intelligence. Citizens involved in overseas criminal activities could face travel bans for up to three years. The rules also aim to prevent citizens from being deceived into illegal activities abroad. The Cyberspace Administration of China says the measures target those involved in illegal cross-border activities and not ordinary travelers.

American incomes finally top pre-pandemic levels, fighting against inflation all the way

WASHINGTON (AP) — U.S. household income finally topped pre-pandemic levels last year, a stark sign of how the past five years of rising prices have limited Americans’ earnings and purchasing power. The figures show that even after taking into account higher prices, the typical household is now earning more than it did before the pandemic. But it’s a small gain over a six-year period, which helps explain the generally sour mood Americans have had about the economy.