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How raising interest rates helps fight inflation and high prices

The Federal Reserve raised its key federal funds rate 10 times since March 2022 — something it hasn’t done as aggressively since the 1980s.

The central bank hopes that by doing so, it can slow down the economy enough to moderate price growth.

But how does raising interest rates do that, exactly?

When you get a loan from a bank — for example, when you’re buying a house — an interest rate is attached to that loan. The interest rate is the price you pay to borrow the money.

Banks need to borrow money, too. Instead of borrowing directly from other banks, they look to the Federal Reserve — America’s central bank. Its primary role is to provide a safe and reliable financial system for the U.S. by maintaining deposit accounts for banks.

When banks need to borrow money, they look to other banks that have deposit accounts with the Fed that may be in a surplus.

And just as with any other loan, the banks are charged an interest rate for borrowing money. It is this percentage, known as the federal funds rate, that the Federal Reserve helps set with its interest rate announcements.

How the federal funds rate influences parts of the economy

But how could one interest rate have so much influence on the broader economy?

Banks pass on the cost of a higher federal funds rate to their customers when those customers want to access regular lending products.

The best example is the prime rate. This is the interest rate banks charge their most creditworthy borrowers, like large corporations. For several decades now, the rule of thumb has been that the prime rate is equivalent to the federal funds rate plus 3%. So, with the new federal funds target rate at between 5% and 5.25%, the new prime rate at the upper range would be at 8.25%. The percentage difference is supposed to cover the cost of processing a bank loan.

Changes in the prime rate, in turn, drive up the cost of borrowing for all other loan products, like real estate and vehicle purchases, as well as revolving debt such as credit cards. The 30-year fixed mortgage rate hovered above 7% as of July 12.

As the theory goes, if it’s more expensive to borrow money or carry a balance on a credit card, consumers will spend less. When spending declines, demand will fall and, eventually, so will the price of everyday goods.

There is a risk, however. Economists warn the combination of higher borrowing costs, high inflation, and slower growth could tip the U.S. economy into a recession. So the onus is on the Federal Reserve to choose its moves carefully.

Does raising interest rates actually work?

Federal Reserve chairman Jerome Powell has said he is seeking to bring demand more in line with supply. But the global supply chain for a wide array of products has been severely constrained over the course of the pandemic, due in part to strict Covid-19 policies in China where many mass-produced goods are sourced.

The ongoing war in Ukraine has negatively affected the global food supply in addition to the crude oil and natural gas resources that Europe largely depends on.

So, there may only be so much the Federal Reserve can do with the tools it has available.

‘Goods inflation is a trade and geopolitics issue that’s controlled by government as a whole and not the Fed,’ said Derek Tang, an economist at LH Meyer Inc., a macroeconomic consulting group.

‘We’ll have to look to the White House and Congress to act on those issues, whether that means brokering deals with other countries to make sure we have better supply, or have more access to supply,’ Tang said.

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Consumer price growth falls for 12th-consecutive month to 3%

Inflation fell to 3% in June — the 12th-consecutive month of declines.

Forecasts called for 12-month consumer price increases to slow from 4% in May to 3.1% in June — just about 1 percentage point above the Federal Reserve’s 2% inflation target.

The decline was led by gas prices, which have fallen to $3.54 compared with $4.66 a year ago according to separate data from AAA.

By one measure, the U.S. economy is already close to slaying the price inflation that has bedeviled it for the better part of two years.

Stock prices initially reacted favorably to the report, with all three major indexes roaring higher in advance of the 9:30 a.m. market open.

But the rest of the story for much of the economy — namely, the ‘core’ inflation figure that reflects everything except food and energy prices — might be more difficult for consumers to bear, according to Riccardo Trezzi, lecturer at the University of Geneva and founder of a consultancy that focuses on underlying inflation.

In June, the core figure hit 4.8% compared with 5.5% in May, the Bureau of Labor Statistics said Wednesday.

“If you want to hit a [2% core inflation] target, unfortunately I suspect an unemployment pickup will be necessary,” Trezzi said.

The unemployment rate in the U.S. tumbled dramatically from a high of 5.9% in June 2021 through the end of that year. Since then, it’s averaged about 3.5%, landing at 3.6% last month. But the Fed continues to believe the unemployment rate will rise to 4.5% through 2024.

The reason the labor market has proven so resilient is the U.S. government and the Fed both took extreme measures to support the economy during the Covid-19 pandemic, and the momentum from those measures continues to be felt, Trezzi said.

The Fed has sought to reverse that momentum by raising interest rates, slowing demand and investment by making goods and services more expensive. However, those interest rate hikes take time to fully reflect in the broader economy.

Trezzi compared the situation to trying to turn around an ocean liner.

‘You hit the brakes, but nothing really happens for a certain number of quarters,’ he said. ‘That’s where we are.’

A ‘soft landing’ — bringing inflation down without significant job losses — has effectively already been achieved, Trezzi said, given that the 9% inflation rate the U.S. saw in June 2022 is now a distant memory.

It’s still too early to celebrate

Rough waters are likely still ahead, Trezzi said, as the 12-month core inflation rate has stagnated above 5% after decades of averaging just 3.6%.

‘I’m skeptical it can be done without imposing a burden on the labor market,’ Trezzi said of knocking down that core inflation number.

Others sharing this view include former Treasury Secretary Larry Summers, who accused the Fed of underestimating inflation for the past two years — and said that it will require raising interest rates much more aggressively to fully get inflation under control.

‘They’ve been surprised on what’s happened to inflation, and because they’re surprised on what’s happening with inflation and the strength of the economy, they’re gonna be surprised by what they have to do to interest rates,’ Summers tweeted.

Not everyone agrees with this gloomier outlook. Speaking to CNBC on Friday, Austan Goolsbee, president of the Chicago Federal Reserve, suggested the economy may be on a rare ‘golden path’ to achieving lower rates of inflation without a recession.

“The Fed’s overriding goal right now is to get inflation down. We’re going to succeed at it and to do that without a recession would be a triumph,” Goolsbee said in a “Squawk on the Street” interview. “That’s the golden path, and I feel like we’re on that golden path. So I hope we keep putting off the recession to forever.”

If one closely examines what has actually been driving the higher inflation data, there are two principal culprits: used car prices and airfare prices, according to Omair Sharif, founder and president of the research and analysis firm Inflation Insights.

Due to supply chain issues — and to a lesser extent, labor costs — prices in the auto market have soared — but are now showing signs of stabilizing, Sharif said.

The same is true for airfare, where jet fuel costs have fallen dramatically and where air carriers have now rolled out larger planes and more frequent flights in popular routes to handle surging demand.

In June, airfares fell 18.9% year-on-year and 8.1% between May and June alone.

‘I don’t think it has to take pain,’ Sharif said, referring to winning the inflation fight. While getting to a 2% inflation target may not happen until the latter half of 2024, ‘if you look at what’s driving inflation, the bulk is always in transportation services’ like cars and planes, he said.

More than two years into the current bout of inflation, the debate over its causes and the potential duration are ongoing — as well as the questions about how long it will take for monetary policy to rein it in.

“Neither consumers nor the Federal Reserve are popping the champagne just yet,” Mark Hamrick, senior economic analyst at Bankrate, said in a note Monday, adding: “Americans have put the worst of inflation behind, but the war hasn’t yet been won.”

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Americans are doing less ‘revenge spending,’ which is a good sign

It took a while, but people are just about done catching up on experiences lost during the pandemic.

While a minority of high-dollar travelers are still confronting — and paying — four-figure airfares to Paris and Tokyo, prices are finally falling across the leisure economy, the last several months of federal data show.

That’s good news for consumers, as well as economists and policymakers seeking reasons for optimism that the economy can regain its footing without sliding into a recession.

Consumer Price Index figures released Wednesday morning showed airfares down 19% in June from last year and car rental rates down 12%, for their fifth consecutive month of declines. Food away from home, which includes restaurant meals, continued to rise, but the category’s annual growth rate of 7.7% in June slowed from 8.8% in March. Ticket prices for sporting events ticked up last month, but the rise came after three straight months of declines.

“It’s the consumer getting to the end of their ‘revenge spending,’” said Skanda Amarnath, the executive director of the macroeconomic policy group Employ America.

The downtrend comes one year after inflation peaked at a four-decade high of 9.1% in June 2022, as consumers poured money into the services sector.

Restaurant prices are still rising but at a pace that has slowed in recent months.Saul Martinez / Bloomberg via Getty Images file

Early in the coronavirus pandemic, homebound consumers raced to scoop up physical goods like exercise bikes, household appliances and pajamas to work from home in, even as supply-chain bottlenecks pushed up prices and delayed deliveries. But as the economy reopened and more people ventured back out, pent-up demand shifted toward travel and leisure, driving up prices at bars, hotels and airlines that were often paying more for hard-to-find workers.

Now, with inflation slipping to 3% in June and consumer confidence hitting its highest level since January 2022, economists increasingly see signs of a return to normal.

Deutsche Bank Chief U.S. Economist Matthew Luzzetti said he still foresees a mild recession this year, expecting further pullbacks in consumer spending and bank lending. But “at the moment,” he said, “consumer spending does not look recessionary.”

Not everybody is tightening their belts in the same ways. While many have been taking shorter, cheaper trips closer to home this summer, overall travel demand remains high. A recent Bankrate survey found 63% of U.S. adults have traveled or plan to travel for leisure this year, up from 58% last year.

At the same time, the share of those citing higher prices as a top problem ticked down to 53% this year from 57% last year, possibly reflecting lower costs for gas, airline tickets and rental cars.

Some travel costs remain steep, though, and high-income vacationers are spending anyway.

Bankrate found about 85% of households making more than $100,000 a year reported leisure travel plans this year. And many of them are increasingly shifting their sights from domestic hot spots to international destinations.

Americans who are traveling abroad this year boast an average household income of nearly $110,000, compared to less than $83,000 among U.S. travelers overall, according to the consultancy Destination Analysts. Overseas jet-setters also have more vacation time to burn and stronger financial security than the average U.S. traveler, the group found.

Strong demand for high-dollar foreign getaways is driving up prices for trips abroad. AAA said in the spring that international flight bookings were up more than 200% since last year. The flight-booking platform Hopper said in May that average airfares to Europe and Asia each jumped by more than $300 since last summer, to over $1,100 and over $1,800 per ticket, respectively.

By contrast, domestic airfare averaged just $306 a ticket, down 19% from the year before.

To accommodate the strong demand, United Airlines has said it will grow its international network at twice the rate of its domestic network this year. Delta Air Lines executives told investors in April that they expected record revenue and profitability on their international routes this summer.

The federal government’s inflation gauges mainly reflect domestic consumption, which means vacationers’ splurging overseas won’t buoy inflation readings at home.

“We don’t see it as much in the domestic data because more of that money is being used on the international side of things,” said Omair Sharif, the founder and president of Inflation Insights. In fact, Sharif said he expects domestic airfare to continue falling through the summer, even as international travel picks up.

In the meantime, consumers who are staying within the U.S. continue to have more affordable options for spending during their downtime.

Last month, Darden Restaurants, which owns the Olive Garden and Longhorn Steakhouse, reported a decline in visits from lower-income households compared to last year, along with slower alcohol sales. But both measures remain above pre-pandemic levels, hinting at a return to more normal patterns.

At the Cracker Barrel, executives recently flagged a “noticeable drop in traffic,” with Chief Financial Officer Craig Pommells telling investors on June 6, “We believe some of our more price-conscious guests may be reducing their retail purchases as a way to manage their overall spend when dining with us.”

Amusement parks have also taken a hit. The Wall Street Journal reported this week that traffic to Disney’s U.S. parks has slowed this summer, shrinking line-waiting times during Independence Day weekend to near-decade lows.

Softer but not collapsing demand is right in line with what Federal Reserve officials hope to achieve with their campaign of interest rate increases, which they paused last month.

With inflation still running hotter than the Fed’s target of 2%, the central bank is expected to again lift interest rates at the end of the month, keeping borrowing costs high for mortgages, credit cards and car loans. Consumer spending, which accounts for about 70% of total U.S. economic activity, will have to cool further to help nudge inflation to that target.

But economists and Fed officials also don’t want it to crater and lead to a “hard landing,” in which a pullback in economic activity pushes employers to lay off workers en masse. If, for example, fewer travelers buy plane tickets or dine out, employers like airlines and restaurants might drop workers to cut costs.

Jobs data released Friday showed no signs that is happening at the moment, with both industries continuing to add workers. The national unemployment rate, at 3.6%, is still hovering near 50-year lows.

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GOP senators probe DHS Sec. Mayorkas on use of personal email for official business: ‘Serious concerns’

FIRST ON FOX: Republican lawmakers, led by Sen. Roger Marshall, R-Kansas, on Thursday wrote to DHS Secretary Alejandro Mayorkas quizzing him about the extent to which he may have used a personal email address for personal business — after a fiery exchange earlier this year, in which the DHS chief called the claims ‘false.’

The senators wrote to Mayorkas seeking more information about the use of private email for work-related matters, which Marshall first raised as an issue in April during Mayorkas’ testimony before the Senate Homeland Security Committee after a Freedom of Information Act disclosure. They are seeking information about failures to comply with DHS rules on records, any additional communications and steps taken to create a ‘culture of careful communications and strict compliance with all federal laws.’

Lawmakers on the letter include Sen. Mike Lee, R-Utah., Mike Braun, R-Ind., J.D. Vance, R-Ohio, Ted Cruz, R-Texas, and James Lankford, R-Okla.

Mayorkas was asked about his use of private email by Marshall in the hearing in April and said ‘Your assertion is false, senator.’

‘If somebody errantly sends me an email on my personal email that should have been sent to my work email, I forward it to my work email — that’s what I do. I fulfill my responsibility scrupulously and I have 100% confidence in the integrity of my actions,’ he said.

The Americans for Prosperity Freedom of Information Act lawsuit led to the disclosure of hundreds of pages of emails and texts from Mayorkas’ personal email and cellphone. In many of those messages, Mayorkas does appear to forward the message to his work email and/or informs the person to work through official channels.

‘Thank you. I will review as soon as I can. I will forward this to my work e-mail. Please use my work e-mail,’ he says in one.

Letter from GOP senators to Sec. Mayorkas by Fox News on Scribd

 

 However, there were significant redactions to the release, with dozens of full pages redacted before the release — something the lawmakers call ‘alarming.’

‘DHS withheld 56 pages in full and redacted over 200 others because they were ostensibly too sensitive to release,’ the senators say.

‘As you are no doubt aware, DHS policy on the use of non-DHS email directs that ‘employees may not use non-DHS e-mail accounts to create or send e-mail records that constitute DHS records’ unless there is an ‘emergency,’ the letter says.

Instead, they say that DHS officials ‘intentionally communicated with you through your private account, including in instances where there were no obvious exigent circumstances justifying deviation from required agency practice’ they write. ‘This suggests that DHS higher-level management tolerates a culture of careless communication, which skirts the spirit, if not the letter, of federal records management laws.’

The Republicans argue that the volume of communications raises ‘serious concerns about whether all official messages sent to or from these devices were properly forwarded back to your official DHS accounts.’ 

In a statement to Fox News Digital, a DHS spokesperson said that Mayorkas ‘uses his official email and devices for official communication.’ 

‘If someone mistakenly contacts him via his personal email about official business, the Secretary follows DHS policy and forwards it to his official account, so that the record is properly maintained and the communication continues through official channels. The Department takes FOIA, communication security and document preservation seriously, which is why this information was properly maintained and accessible,’ the spokesperson said.

The letter is the latest indicator of Republican pressure on the DHS chief, who Republicans have grilled repeatedly — particularly on his handling of the ongoing crisis at the southern border.

Fox News Digital reported on Wednesday that Mayorkas will appear before the House Judiciary Committee later this month, where he is expected to face questions on issues including immigration, border security and the efforts targeting alleged disinformation.
 

Adam Shaw is a politics reporter for Fox News Digital, primarily covering immigration and border security.

He can be reached at adam.shaw2@fox.com or on Twitter.

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John Kerry’s climate work concealed in ‘cloak of zero supervision,’ lawmaker says after tense budget hearing

Rep. Brian Mast, R-Fla., said Special Presidential Envoy for Climate (SPEC) John Kerry is operating under the ‘cloak of zero supervision’ following a contentious budget hearing Thursday. 

Mast, the chairman of the House Foreign Affairs Subcommittee on Oversight and Accountability, opened Thursday’s hearing by making the case that Kerry, in his newly created position in the Biden administration, has ‘largely managed to avoid any real oversight or accountability in that position.’

Mast told Fox News Digital in an interview following the hearing that Kerry’s office is illegitimate and that he is ‘working globally under the cloak of zero supervision.’

‘There is no clarity about who he works for, who he answers to, what he’s doing, and that’s not accountable to the American taxpayer when he is undertaking policies that allow for those trying to rise up against us to thrive and that throttle the United States of America back,’ he said.

‘They don’t have a website, they don’t have a landing page, they don’t have an ‘About Me’ section for what they do,’ he continued. ‘They don’t have the lists of the hierarchy of their office. They have no information about them whatsoever. And so that’s the problem. We can speculate on what they do, but nobody actually knows what they’re doing.’

Kerry is traveling to China later this month to restart climate negotiations with his Chinese counterparts, which stalled last year in response to former House Speaker Nancy Pelosi’s, D-Calif., high-profile trip to Taiwan. 

Shortly after taking office in 2021, President Biden appointed Kerry to the climate envoy position, which hadn’t existed before, didn’t require Senate approval, and gives him a spot on the president’s Cabinet and National Security Council. The climate office is housed at the State Department and has an estimated $13.9 million annual budget with approval for 45 staff members.

Despite the high-level role leading the Biden administration’s global climate strategy, Kerry’s office has been tight-lipped about its internal operations and staff members, sparking criticism from Republicans.

Mast told Fox News Digital that ‘there will be a zeroing out of his office moving forward in the appropriations.’

‘We want to defund his office. We will,’ he said.

Kerry’s office did not immediately respond to Fox News Digital’s request for comment.

Fox News’ Thomas Catenacci contributed to this report.

Jessica Chasmar is a digital writer on the politics team for Fox News and Fox Business. Story tips can be sent to Jessica.Chasmar@fox.com.

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Biden stumbles trying to board Air Force One following leaders summit

President Biden appeared to stumble while going up a flight of stairs to board Air Force One on Thursday.

Biden was boarding the presidential airplane in Helsinki, where he met with Nordic leaders following a two-day NATO summit in Lithuania. 

Video showed Biden stumble slightly on a step roughly halfway up and quickly recover in stride before reaching the top of the stairs, where he turned and waved to onlookers on the tarmac at Helsinki-Vantaan International Airport.

Since taking office, his mental state has been questioned after a series of gaffes and physical lapses such as trips and falls in public. 

Prior to the stumble, Biden assured the other leaders that the U.S. is committed to NATO, given the Russian invasion of Ukraine and criticisms of the group from within the Republican Party. 

‘No one can guarantee the future, but this is the best bet anyone could make,’ he said during a joint press conference with Finnish President Sauli Niinistö.

Biden said there was support for NATO from the American people, Congress and from both Democrats and Republicans.

‘There is no question there’s overwhelming support from the American people. There’s overwhelming support from the members of the Congress, both House and Senate, in both parties notwithstanding the fact that some extreme elements of one party,’ he said, referring to Republicans. 

Biden’s tone was much different than when then-President Donald Trump sided with Russian President Vladimir Putin in Helsinki nearly five years ago. 

Louis Casiano is a reporter for Fox News Digital. Story tips can be sent to louis.casiano@fox.com.

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Kamala Harris matches record for most tie-breaking votes cast as VP

Vice President Kamala Harris on Wednesday matched the record for the most tie-breaking votes cast in the U.S. Senate by a sitting vice president. 

Her history-making 31st vote was cast in favor of advancing President Biden’s nomination of Kalpana Kotagal to the Equal Employment Opportunity Commission. She now matches the record of John C. Calhoun, who served as vice president from 1825 to 1832. 

‘It is a moment and I think that there’s still so much left that we have yet to do,’ Harris told reporters afterward.

‘My mother gave me great advice, which is that I may be the first to do many things,’ she added. ‘I’m going to make sure I’m not the last.’

Unlike Calhoun, who spent eight years accumulating his total, Harris reached 31 in 2 1/2 years. It’s a reflection of her unique circumstances, with a narrowly divided Senate and a sharply partisan atmosphere.

‘It really says more about our time, and our political climate, than it does about anything else,’ vice presidential historian Joel K. Goldstein told The Associated Press. ‘Our politics is so polarized that, even on the sort of matters that in the past would have flown through, it takes the vice president to cast a tie-breaking vote.’

Harris’ record-matching vote was cast without pomp or ceremony. She entered the Senate chamber Wednesday, recited some lines to cast her vote, and was then congratulated by Senate Majority Leader Chuck Schumer, D-N.Y.

Under the U.S. Constitution, the vice president serves as the president of the Senate but may only cast a vote when there is a tie. As of July 12, 2023, there have only been 299 tie-breaking votes cast by a vice president in U.S. history.

Schumer called the vice president’s responsibility an ‘immense burden’ and said Harris has ‘carried out her duties with supreme excellence’ while taking on ‘all the other demands she faces’ in her job.

Harris’ role as tie-breaker for the Democrats has largely defined the first two years of her service as vice president. She had expected to be relieved of that duty when Senate Democrats expanded their majority from 50 to 51 in November, but absences in the Democratic conference have kept her in demand for votes.

KAMALA HARRIS ‘CULTURE’ WORD SALAD STUMPS TWITTER USERS: ‘EMPTIEST HUMAN BEING ALIVE’ 

Sen. John Fetterman, D-Pa., missed several weeks of work when he was hospitalized for clinical depression in February. Sen. Dianne Feinstein, D-Calif., was diagnosed with shingles in March and missed votes as well.

Both senators have since returned to work, but Harris has been forced to break ties on contentious votes, usually nominations, where Biden has not consolidated Democratic support. 

While breaking ties requires Harris to be in Washington, D.C., and can prevent her from traveling to promote the Biden-Harris administration’s accomplishments, it also means Harris was directly involved in passing some of the landmark legislation of Biden’s first term. 

If and when Harris decides to pursue another bid for the White House herself, she can brag that she was the deciding vote on the American Rescue Plan, a $1.9 trillion pandemic relief measure, and the Inflation Reduction Act, a $739 billion tax and climate spending package intended to curb inflation. And Republicans, of course, can attack her for those votes.

The Associated Press contributed to this report.  

Chris Pandolfo is a writer for Fox News Digital. Send tips to chris.pandolfo@fox.com and follow him on Twitter @ChrisCPandolfo.

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GOP fumes after Secret Service closes White House cocaine probe without a culprit: ‘just ridiculous’

Congressional Republicans fumed at the Secret Service ending the White House drug probe without a culprit, and questioned what it means for security in the White House and transparency in the Biden administration.

Republicans on the Hill weren’t happy with the Secret Service’s investigation into the cocaine found at the White House over the Independence Day weekend, with Rep. Tim Burchett, R-Tenn., telling Fox News Digital he was ‘disgusted’ that the briefing was classified after ‘they told us in the meeting that it was not classified.’

‘They should have transparency and immediately had alerted the press to that,’ Burchett said. ‘They should have been telling the press instead of a bunch of congressmen so that they would piecemeal it all together out to the press.’

Burchett said he ‘felt sorry’ for the Secret Service agents and that ‘they’re professional people, and they’re just put in a bad position by this administration.’

The Tennessee Republican said the Secret Service told lawmakers there is ‘no video of the area’ where the cocaine was found and called it ‘100% suspicious.’

‘You’ve got the press secretary of the president of the United States, she’s telling us where it was found. And then, of course, it wasn’t found there,’ Burchett said. ‘[It’s] like the bag of cocaine got legs, apparently. And, you know, it’s just ridiculous. The whole thing is ridiculous.’

‘To think that the most secure building in the world, dude,’ Burchett said. ‘I mean, when I was mayor of Knox County, if somebody walked into one of our buildings, we had cameras.’

Burchett said that if he were to call the Knox County Police Department to D.C., they would ‘do circles’ around the Secret Service.

‘This is ridiculous. This is beyond the pale,’ Burchett said. ‘This is indicative of a White house that is out of control and that has no leadership and is rudderless.’

‘This trash can needs to be cleaned out with a garden hose immediately,’ he added.

Rep. Austin Scott, R-Ga., who sits on the House Intelligence Committee, told Fox News Digital it ‘is ridiculous that the Secret Service wants us to believe that, even with the FBI’s help, they can’t identify a suspect who brought cocaine into the most secure building in the world.’

‘Why would you close the investigation in less than a week if you wanted to know who did it?’ Austin added.

Ohio Rep. Bob Latta, a Republican, told Fox News Digital that the ‘West Wing of the White House should be one of the most secure government offices in the nation.’

‘The fact cocaine was found on the premises raises major security concerns, and it is unacceptable the Secret Service is now abandoning their investigation without even ID’ing a suspect,’ Latta continued.

Texas GOP Rep. Troy Nehls, a former sheriff, told Fox News Digital said that President Biden’s son Hunter’s history with drug abuse should have made the Secret Service consider him ‘a person of interest.’

‘With Hunter Biden’s past documented behavior and use of the exact same substance, one could believe that he would be at least considered a person of interest,’ Nehls said. ‘Americans deserve answers about how cocaine was found in one of the most secure buildings in the world.’

White House press secretary Karine Jean-Pierre rebuked reporters last week for asking whether the cocaine was related to any Biden family members, saying the question was ‘incredibly irresponsible.’

Texas Republican Rep. Pete Sessions told Fox News Digital he is ‘deeply unsettled by the Secret Service closing their investigation without identifying the culprit.’

‘A lack of surveillance footage in a ‘heavily trafficked’ area near the West Executive entrance is unacceptable,’ Sessions said. ‘This incident isn’t just about an illegal substance found in the White House; it’s a grave testament to the lacking accountability and disregard for security under the Biden administration.’

‘It is critical that the White House reassess and strengthen our security measures to prevent this scenario from occurring again, and that every individual within the White House is held to the highest standards of conduct and responsibility,’ he added.

House Speaker Kevin McCarthy, R-Calif., told reporters on Thursday that it seems to him that ‘Biden Inc. strikes again.’

‘How can in the White House — 24/7 security — they find cocaine, but now they just closed the investigation?’ McCarthy asked. ‘Where in the country do you get treated like this? Only with the Bidens, with the Bidens in charge. There is no equal justice.’

The speaker said he wants ‘to see an answer to the question like every other American’ on how there was ‘cocaine sitting in a cubbyhole just by the Situation Room.’

‘First of all, we never got the right news. We found it in different places, different places, different places. . . . Anything involving around Biden Inc. gets treated differently than any other American, and that’s got to stop.’

Rep. Lauren Boebert, R-Colo., told Fox News Digital that, during the briefing, she had inquired about specific security measures in place for the lockers where the cocaine had been found. Boebert said the Secret Service had admitted that the key to the locker in question ‘is missing.’ 

‘There are 182 lockers in that foyer and currently … locker number 50 where the cocaine was found, that key is missing,’ Boebert said. ‘There were more than 500 people who went through the West Wing during the weekend of when this substance was found, when the cocaine was found in the White House, and none of those people who have come through are classified as suspects.’ 

‘We do not know how many were tourists, individual citizens, or staffers, and they currently are not looking any further into those more than 500 people who entered that foyer of the West Wing during that weekend,’ she said. ‘Instead, they are quickly wanting to close this investigation and move on to the next Biden crime crisis.’ 

Boebert also told Fox News that she learned that ‘there are no logs of the lockers. There’s no video surveillance of the lockers.’ 

‘The only thing that the Secret Service did was conduct background searches for past drug use or conviction of the over 500 individuals that came through that weekend,’ Boebert said. ‘They did not go further back in time, nor did their investigation produce any results to flag an individual person.’ 

She added, ‘I believe that every staffer who went into the White House that weekend … should be drug tested.’

Rep. Jamie Raskin, D-Md., defended the Secret Service, saying that testing hundreds of potential suspects for drugs would be ‘a massively disproportionate and overblown response that would violate people’s civil liberties.’

‘I mean, if there were small amounts of marijuana or cocaine found somewhere in the Capitol Complex, we would not want to drug test everybody who works here,’ he said.

The Secret Service announced Thursday that it has closed its investigation into the cocaine found at the White House earlier this month and said it is ‘not able’ to ‘single out a person of interest’ because of a lack of physical evidence.

In a statement Thursday, after briefing members of Congress on the matter, the Secret Service said the cocaine had been found on July 2 ‘inside a receptacle used to temporarily store electronic and personal devices prior to entering the West Wing.’

The Secret Service said it has been investigating ‘how this item entered the White House,’ including a ‘methodical review of security systems and protocols.’

‘This review included a backwards examination that spanned several days prior to the discovery of the substance and developed an index of several hundred individuals who may have accessed the area where the substance was found,’ the Secret Service said. It said that investigators had developed ‘a pool of known persons for comparison of forensic evidence gleaned from the FBI’s analysis of the substance’s packaging.’

The Secret Service said it had received the FBI’s lab results on Wednesday and that the effort ‘did not develop latent fingerprints and insufficient DNA was present for investigative comparisons.’

‘Therefore, the Secret Service is not able to compare evidence against the known pool of individuals,’ the Secret Service said, adding that the FBl’s evaluation of the substance ‘also confirmed that it was cocaine.’

‘There was no surveillance video footage found that provided investigative leads or any other means for investigators to identify who may have deposited the found substance in this area,’ the Secret Service continued. ‘Without physical evidence, the investigation will not be able to single out a person of interest from the hundreds of individuals who passed through the vestibule where the cocaine was discovered.’

‘At this time, the Secret Service’s investigation is closed due to a lack of physical evidence,’ they said.

The Secret Service briefed members of Congress on the investigation Thursday morning.

Fox News Digital’s Brooke Singman and Elizabeth Elkind contributed reporting.

Houston Keene is a politics writer for Fox News Digital.  Story tips can be sent to Houston.Keene@Fox.com and on Twitter: @HoustonKeene 

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Republicans made huge gains with Hispanic, Asian, young voters in last election as Democrats faltered: Report

Republicans made huge gains among Hispanic, Asian and young voters in the 2022 midterm elections, a new Pew Research Center post-election analysis released Wednesday found.

According to the report, the margin between Hispanic voters who voted Democrat and those who voted Republican shrunk by a massive 26 points in the 2022 midterms compared to the 2018 midterms.

Although Democrats maintained their lead among Hispanic voters, their share of the Hispanic vote dropped from 72% in 2018 to 60% in 2022, while Republicans increased their share from 25% in 2018 to 39% in 2022. The margin went from 47 points in Democrats’ favor, to just 21 points.

An even larger margin shift toward Republicans came from Hispanic men, who favored Democrats by 42 points (69%) in 2018, but just 13 points (56%) in 2022. Republicans’ share of the vote from Hispanic men increased from just 27% in 2018 to 43% in 2022.

Hispanic women also saw a massive shift toward Republicans, dropping from a 52-point margin in Democrats’ favor in 2018 to a 30-point margin in 2022. Republicans won just 23% of Hispanic women votes in 2018, but that increased to 34% in 2022. Democrats won 75% and 64% respectively.

The report noted that 37% of Hispanic voters who voted in 2018 did not turn out to vote in 2022, but the total percentage of the electorate made up by Hispanic voters increased from 8% in 2018 to 9% in 2022.

Another, albeit smaller, shift toward Republicans happened among Asian voters. In 2018, Democrats garnered 72% of the Asian vote with Republicans at just 26%, a margin of 47 points. Republicans jumped to 32% in 2022 while Democrats won to 68%, shrinking the margin to 36 points. 

The share of Asian voters making up the total electorate increased from 2% in 2018 to 3% in 2022.

Support from Black voters remained largely unchanged with Democrats winning 92% in 2018 and 93% in 2022, compared to Republicans’ 6% in 2018 and 5% in 2022.

Republicans also made gains with voters under the age of 30, traditionally a source of strong Democratic support. The share of the electorate made up of voters aged 18 to 29 fell slightly to 10% from 11%, but the margin fell from 49 points in Democrats’ favor in 2018 to 37 points in 2022. 

The age group voted just 23% for Republicans in 2018, but that jumped to 31% in 2022 while Democrats dropped from 72% to 68% respectively. 

The report found that, despite Republicans winning control of the House of Representatives, there was no large shift in voters’ party preference for those who cast a ballot in 2018 and 2022. For those that did shift their party support, the net flip fell at 1% to 2% from Democrat to Republican.

If voters who voted in both 2018 and 2022 were broken down by party, 92% of voters who voted for Democrats in 2022 also voted for Democrats in 2018, while 95% of voters who voted for Republicans in 2022, also voted for Republicans in 2018.

Brandon Gillespie is an associate editor at Fox News. Follow him on Twitter at @brandon_cg.

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Florida AG fires off warning shot to DOJ if ‘unfounded’ decision to probe migrant transports is pursued

FIRST ON FOX: Florida Attorney General Ashley Moody is urging Attorney General Merrick Garland against any ‘unconscionable’ moves to investigate Florida’s transportation of migrants — after California Gov. Gavin Newsom urged the DOJ to do so.

‘While I would urge you not to bail out California or engage in another political investigation or litigation, if you make the unconscionable and unfounded determination to do so, Florida stands ready to fight against DOJ’s overreach,’ the letter to Garland, obtained by Fox News Digital says.

Newsom, along with California Attorney General Rob Bonta and Bexar County Sheriff Javier Salazar, wrote to Garland on July 6 about Florida’s ‘unauthorized alien transport program,’ which flies migrants to so-called sanctuary jurisdictions across the U.S.

The program has transported migrants to Martha’s Vineyard in Massachusetts and to California. It picked up additional funding signed into law by Gov. Ron DeSantis earlier this year and is one of many similar initiatives that some Republican states implemented in response to the ongoing border crisis.

Newsom alleged that while it is common for jurisdictions and NGOS to facilitate travel elsewhere in the U.S., ‘this scheme is different.’ The letter cites news accounts that migrants were deceived into taking flights ‘based on promises of jobs and shelter.’

 In the letter, he urges DOJ ‘to open federal criminal and civil investigations into these incidents.’ 

‘It is unconscionable to use people as political props by persuading them to travel to another state based on false or deceptive representations. We urge USDOJ to investigate potential violations of federal law by those involved in this scheme,’ he said.

Separately, California Attorney General Rob Bonta accused Florida of ‘state-sanctioned kidnapping.’

But in her letter, Moody says there is ‘no basis’ for the DOJ to investigate the Sunshine State, and repeats claims made by the state that the relocation program is voluntary and that contractors were present to ensure the migrants made their way to non-governmental organizations. 

Moody dismisses the move by California as a ‘political stunt, not a legal request’ and says that the call is because Gov. Ron DeSantis is running for president and could potentially beat President Biden.

‘Instead, they hope that DOJ can be improperly utilized, yet again, against a Republican presidential candidate during an election. This seems to seek from DOJ exactly what you pledged DOJ would not do.’

In a statement, Moody called the request a ‘ridiculous political stunt.’

‘Our voluntary immigration relocation program is lawful, and California’s request fails to identify any violation of federal law,’ she said. ‘As an Attorney General who leads hundreds of highly qualified lawyers and has led dozens of legal challenges against this administration, it is jarring that California is not competent enough to articulate even a minimal legal basis for its request.’

The move comes as part of an ongoing feud between California and Florida over the issue, as well as between Republican-led and Democrat-led states more broadly on the issue.

As they have faced an ongoing border crisis which they blame on the Biden administration, Republican states including Florida and Texas have been bussing migrants to states or cities with ‘sanctuary policies’ which they say encourages migration to the border.

‘They attacked the previous administration’s efforts to try to have border security. And so that’s the policies they’re staking out. And then what?’ DeSantis said last month. ‘When they have to deal with some of the fruits of that, they all of a sudden become very, very upset about that?’

Moody meanwhile has taken legal action against the Biden administration and secured a major win when a judge agreed to block multiple parole release policies of migrants — including one that saw migrants released into the U.S. without court dates due to overcrowding.

‘Another opportunity for litigation will only shine a brighter light on the Biden administration’s complete abdication of its responsibility as to immigration and the jeopardy which it has placed our country and our citizens.’

Adam Shaw is a politics reporter for Fox News Digital, primarily covering immigration and border security.

He can be reached at adam.shaw2@fox.com or on Twitter.

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