News Wrap: Watchdog finds no criminal activity by Powell related to Fed renovation

Geoff Bennett:

And we start the day's other headlines in Washington, D.C.

The Federal Reserve's inspector general says it found no criminal activity by former Chair Jerome Powell or others related to the costly renovation of the Central Bank's headquarters. But in a 120-page report, the Fed's watchdog did say the nearly $2.5 billion project was poorly managed and lacked budget controls.

President Trump had seized on the project as part of his broader effort to pressure Powell and the Fed to lower interest rates. The DOJ even launched a criminal investigation over whether Powell had misled Congress. That effort was dropped earlier this year after a series of legal setbacks.

Defense Secretary Pete Hegseth announced today that the Pentagon will cut the number of its generals and admirals by roughly 20 percent by the start of next year. Addressing hundreds of troops at Marine Corps Base Quantico in Virginia, Hegseth called the cuts part of a long overdue culture change, even as some lawmakers have raised concerns about losing experienced military leaders.

Pete Hegseth, U.S. Defense Secretary:

Those generals who did not, who clung to the woke department or seemed to think civilian control of the military is simply a suggestion, well, they no longer work here.

Geoff Bennett:

Hegseth also announced a number of other initiatives, including a new four-star command focused on drones, robotics, and other autonomous warfare, as well as the establishment of a new Office of Religious Affairs.

And he said several outside advisers, including Elon Musk and former House Speaker Newt Gingrich, would help the Pentagon study the future of warfare.

Senate Democrats blocked a Republican-led effort today to limit, but not stop members of Congress from trading stocks.

Man:

The yeas are 53, the nays are 47. Three-fifths of the Senate duly chosen and sworn not having voted in the affirmative, the motion is not agreed to.

Geoff Bennett:

The vote landed far short of the 60 votes needed for passage. Known as the Stop Insider Trading Act, the measure would have barred lawmakers and their families from buying individual stocks, but allow sales with advance notice.

But Senate Democrats argued it didn't go far enough and that an outright ban is needed not just for Congress, but also for the president. A separate bill aimed at addressing concerns about data centers and their impact on energy costs also fell short. The measure passed the House by an overwhelming margin, but Democrats said it didn't do enough to help consumers.

The Federal Trade Commission is reportedly launching an investigation into a number of AI companies over the potential dangers their technology poses to consumers. Multiple media outlets are reporting that the probe focuses on Anthropic, OpenAI, and other companies after a number of incidents in recent months of AI agents going rogue.

The FTC plans to issue demands for information and testimony from top executives. It's the first official action to look into such concerns. Just yesterday, President Trump hosted tech leaders at the White House, saying they had all agreed to self-police AI development.

What's left of Hurricane Polo is helping fuel a massive storm system that will dump what weather officials are calling excessive rainfall for several days. That's creating the risk of flash floods for more than 25 million Americans from Arizona to the Midwest. Heavy rains in New Mexico turn small desert rivers into raging rapids. A potential dam failure there along the Rio Grande has forced several towns to evacuate.

Meantime, back in Mexico, along the hard-hit Baja coast, floodwaters are slowly receding after Polo passed through. People are returning home to salvage what they can.

Elbia Maria Bachomo, Puerto San Carlos, Mexico, Resident (through interpreter):

We started taking clothes, but the water was already there. We didn't even have time to grab blankets or anything. I think the water came while we were getting out.

Geoff Bennett:

There is now another hurricane off Mexico's coast, though Rachel, as it's been named, is expected to stay offshore. Hurricanes have been far more active this year in the Pacific, driven by what forecasters have called a Super El Nino.

Turning now to the war in Ukraine, officials say Russian strikes killed at least seven people today, including a child. Firefighters worked overnight to put out blazes in and around the capital, Kyiv. The strikes caused multiple power outages, as Russia targets Ukraine's power grid ahead of the colder winter months.

Ukrainian officials have called such a campaign an attempt to weaponize winter. Meantime, in Moscow, Russia's Foreign Ministry warned that European weapons factories could become military targets, accusing European nations of direct involvement in the war in Ukraine.

Maria Zakharova, Spokeswoman, Russian Foreign Ministry (through interpreter):

By opening arms factories and joint ventures, they are fully involved. And this only delays a resolution to the conflict, rather than bringing it closer, as some forces in Europe think or imagine.

Geoff Bennett:

For his part, NATO Secretary-General Mark Rutte claims there is no imminent threat from Russia. But in a television interview, he added that, if anything were to happen, the security alliance would be, in his words, ready to counter it.

Well, on Wall Street today, stocks ended the month of September on a mixed note. The Dow Jones industrial average fell more than 400 points. The Nasdaq managed a gain of around a quarter of 1 percent. The S&P 500 ended the day slightly lower.