Washington, DC

1. Trump’s Iran shift
2. Rubio meets pope
3. GOP’s ballroom fight
4. Prediction markets push
5. Lutnick grilled on Epstein
6. Retirement savings fears
7. Manus’ China lesson

PDB: FDA authorizes flavored vapes

Trump attends military Mother’s Day event … Iranian foreign minister in Beijing … Oil prices ⬇️ 8% on Iran deal hopes

Trump pulls another Iran U-turn

President Donald Trump appears intent on deescalating the Iran conflict, now in its third month, as the war weighs on the global economy. Trump abruptly announced Tuesday that the US would pause a day-old operation to help commercial ships navigate through the Strait of Hormuz “for a short period of time” to see if an agreement with Iran “can be finalized and signed.” He cited “great progress” in talks and said the move came at the request of mediator Pakistan. Markets rose after Axios reported the White House believes it is close to an agreement that would end the war and allow for more detailed nuclear talks, despite several Iranian attacks on US forces and allies. Meanwhile, Gulf countries are worried that Tehran believes further attacks against them will pay off, “because Trump is so intent on extricating himself from the war” that he’ll ignore them, The Wall Street Journal reported.

Rubio’s high-stakes pope meeting

Secretary of State Marco Rubio is heading into a meeting with Pope Leo XIV — and is striking a more neutral tone on the Catholic leader than Trump. Rubio yesterday acknowledged Trump’s war of words with the pope, saying they’ve “had some stuff that happened,” but maintained the trip was planned before those relations were strained over Iran. Rubio, himself a Catholic, then worked to highlight some of the issues where there’s agreement between the two sides, like preserving religious freedom. Rubio’s diplomatic remarks stood in sharp contrast to Trump’s own criticisms of the pope, who he accused of “endangering Catholics and a lot of people” with his stance on Iran. That means Rubio’s sitdown will be closely watched tomorrow; the two are expected to discuss topics including Cuba. Rubio departs Washington today for Italy and will also meet with Italian Prime Minister Giorgia Meloni.

— Shelby Talcott

GOP prepares for East Wing fight

Republicans’ party-line immigration bill provides $1 billion for securing Trump’s East Wing project — which means, though the word “ballroom” isn’t mentioned, the party is about to plunge into that fight anyway. “If there is a billion taxpayer dollars for the ballroom, then the whole debate over reconciliation becomes a ballroom debate,” lamented one senior Republican aide. “Maybe it survives. Just becomes a huge distraction and liability when trying to pass the f*cking thing.” Judiciary Committee leaders tried to avoid branding the bill as ballroom-related by adding a provision blocking any “non-security” spending on the $400 million project, which Trump has clamored to build. “It isn’t for the ballroom. It’s money to secure the White House complex. It’s a new structure (paid for by private donations), but private donors cannot fund the needed security,” argued a second aide.

— Burgess Everett

CFTC eyes prediction markets move

As the Commodity Futures Trading Commission takes a growing number of states to court over prediction markets, Chair Mike Selig is monitoring Minnesota and other states that advance legislation that would ban or regulate them, a person familiar with his thinking told Semafor. Selig, who has so far filed lawsuits against five states that tried to crack down, praised a district judge’s Tuesday decision to block Arizona from prosecuting Kalshi as “reaffirm[ing] what we all know: the CFTC has full jurisdiction.” That ruling comes after a federal appeals court sided with Kalshi over New Jersey last month, boosting the fledgling industry’s hopes that the Supreme Court takes up the issue — and discourages Congress from passing any bill that might protect states’ lane. Like Minnesota’s legislature, federal lawmakers have recently shown an interest in weighing in despite messy faultlines.

Lutnick faces grilling on Epstein ties

Commerce Secretary Howard Lutnick will take part in a transcribed interview today in connection with the House Oversight Committee’s investigation into Jeffrey Epstein. Lutnick’s appearance behind closed doors will make him the highest-ranking current official to appear, though he’s denied any wrongdoing in his relationship with the late sex offender. The two were once neighbors, and Lutnick is likely to face pointed questions from lawmakers about the nature and extent of his Epstein connections. Democrats have scrutinized Lutnick’s lack of transparency; he admitted to visiting Epstein’s island during a 2012 family vacation after previously claiming to have cut off contact in 2005. A department spokesperson said he looked forward to addressing questions and to “putting to rest the inaccurate and baseless claims in the media designed to distract from his historic work underway at the Commerce Department.”

— Nicholas Wu

Americans sweat retirement savings

More Americans are getting nervous about saving enough for retirement. Nearly seven in 10 non-retired Americans are somewhat or very worried about not having enough money when they stop working, according to new Gallup polling — close to the high of 73% recorded in 2010, shortly after the financial crisis. At the same time, just four in 10 current retirees share the same worry, close to the average over time. Overall, only 45% of nonretirees think they’ll have enough to live comfortably in retirement, a figure that ticks higher among younger adults, compared with 82% of retirees who say they have enough. These financial worries may be propelled in part by uncertainty surrounding the future of Social Security: A record 62% of retirees say the program is a major source of their income, but just 36% of nonretirees say they expect the same.

View: China entrepreneurs’ blindspot

The CEO of Manus exemplifies China’s entrepreneurial smarts. As Silicon Valley spent billions developing advanced AI models, Red Xiao and his China-based team came up with one of the first — and at the time, many argued, the best — AI assistants to make them practically useful to everyday users. Meta saw the wizardry, too, swooping up Xiao’s startup for $2 billion last year. Yet it turns out that the AI prodigy, unusually perceptive on the future of technology, had a blind spot: his own country. Under Xi Jinping, startups like Manus are expected to be part of “Team China” — an all-of-nation effort involving government-funded research labs, giant state enterprises, and academia — to challenge US tech supremacy. But in Beijing’s eyes, by relocating his startup to Singapore, firing his China-based staff, and then selling his startup to a US tech giant, Xiao had switched sides.

Blindspot: Fetterman and DHS

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: President Trump offered to endorse Sen. John Fetterman, D-Pa., if he changes parties.

What the Right isn’t reading: Immigration officials at the Department of Homeland Security disagreed so strongly over how to execute on the Trump administration’s deportation agenda “that during a meeting over the issue, handlers had to ‘clear the room’ to defuse tensions,” NBC News reported.

The global financial landscape is evolving at a pace unseen in previous years, propelled by the adoption of new technologies and rapid innovation.

As Washington’s regulatory approach evolves, new opportunities are emerging, but questions remain around how these policy shifts will impact the industry and how consumers access services.

On Wednesday, May 20, Semafor will convene the Banking on the Future Forum in Washington, DC, with on-the-record conversations featuring Rep. Tom Emmer, R-Minn., House Majority Whip and Vice Chairman of the House Financial Services Subcommittee; Jonathan V. Gould, Comptroller of the Currency; Rep. French Hill, R-Ark., Chairman of the House Financial Services Committee; Rep. Bryan Steil, R-Wis.; Sarah Levy, CEO of Betterment; and other industry leaders, on how policy and technology are steering the industry’s trajectory.

Join us as we examine how evolving regulations are shaping innovation and what they signal for the future of financial technology.

May 20 | Washington, DC | Request Invitation

Beltway Newsletters

Punchbowl News: Most progressive Democrats want Hakeem Jeffries to be the next speaker if their party takes back the House in the midterms. “He stood up strong in this healthcare fight, on the ICE funding fight and then not just taking the gerrymandering lying down, but actually fighting back,” said Congressional Progressive Caucus Chair Greg Casar, D-Texas.

Axios: The White House’s new memorandum of understanding to end the Iran war is being negotiated between envoys Jared Kushner and Steve Witkoff and Iranian officials, directly and through mediators.

White House

• The FDA authorized fruit-flavored vapes for adults age 21 and up for the first time, after President Trump reportedly pressured FDA Commissioner Marty Makary on the issue. Earlier, Sens. Susan Collins, R-Maine, and Dick Durbin, D-Ill., urged the FDA to reconsider its draft guidance on the products.

Congress

• Senate Banking Chair Tim Scott, R-S.C., said President Trump’s recent rescheduling