A MARTÍNEZ, HOST:
The Federal Reserve is expected to announce another big increase in interest rates today.
LEILA FADEL, HOST:
Prices have continued to rise at their fastest pace in a generation, and the Federal Reserve is trying to get inflation under control. But is it working?
MARTÍNEZ: NPR's David Gura is here to tell us all about it. David, I think we all expect an interest rate hike. But, David, how high might it be?
DAVID GURA, BYLINE: So Wall Street expects an interest rate increase of another three-quarters of a percentage point, which would be a big hike. It would be the fourth hike this year. And we haven't seen moves of this magnitude in decades. It's an indication that this continues to be an economy under pressure from inflation. Now, the Fed's trying to take away the incentive to spend by making the cost of borrowing more expensive.
Michelle Meyer is the U.S. chief economist at the Mastercard Economics Institute, and she says the Fed is trying really hard here to strike the right balance.
MICHELLE MEYER: They need to push the economy enough in terms of weakening growth to take out some of that price pressure, but not too much where they create damage to the real economy and, you know, threaten recession.
GURA: Now, A, this is challenging because the Fed's tools are not precise. This isn't going to be painless, and this goes beyond demand. The war in Ukraine has sent the price of gas and other commodities, like wheat, higher. And then there are supply chain issues, and the Fed can't do much about either of those.
MARTÍNEZ: I mean, I think what people want to know is, are there signs of - if the Fed's policies are working?
GURA: Absolutely. We've seen them cool what was a very hot housing market. The average rate on a 30-year fixed-rate mortgage is now at about 5 1/2 percent. That's almost double what it was last year. And we've seen demand for those mortgages taper off, along with new home sales and construction. You know, inflation did not go down in June. The consumer price index jumped to 9.1% from a year earlier. Food and energy prices drove that. And we have seen the average cost of a gallon of regular gas drop from its record-high in June - down by about 69 cents. But the economic data are sending mixed messages, and the Fed has not gotten a clear indication inflation has peaked, never mind a sign that it's started to subside.
MARTÍNEZ: So if the Fed continues on this path, what are the risks?
GURA: So the Fed's big fear is this doesn't end with a soft landing for the U.S. economy that we've heard so much about, that, instead, the Fed triggers a deep downturn. Now, some economists say a recession is necessary to get inflation under control. Basically, we need a sharper slowdown to kick this. But Fed Chair Jerome Powell says that is not what he and his colleagues are trying to do right now. And, A, he believes they have the capacity to deal with high inflation without triggering a recession.
MARTÍNEZ: You know, David, it feels like what we've talked about is the if-this part. So now what will be the then-that part?
MARTÍNEZ: Yeah. If this works, borrowing costs will continue to go up. We'll see a decline in demand for goods and services. You know, I said this isn't going to be painless. And we've already seen some companies slow hiring and cut staff this week. The e-commerce company Shopify laid off a thousand people, and hundreds of tech companies have cut jobs. Economist Michelle Meyer says we're going to see more of an effect on what has been a strong labor market, and Americans are going to feel that.
MEYER: To me, I think a lot of it comes down to jobs - whether you have a job, whether you expect to keep your job, and what that might mean for your future path and income.
MARTÍNEZ: David, one more thing. Tomorrow we're going to get that all-important report card on the economy. Tell us about that.
GURA: That's right, GDP - gross domestic product - for the second quarter. This will tell us how much the economy grew or how much it shrank. And what we could see are two consecutive quarters of negative growth, which, in general, has signaled a recession, even though it is not the official definition of one. And there is, I want to underscore, a lot that's unique about this moment. First and foremost, the economy is still adding jobs, month after month - 372,000 new jobs in June, even as the Fed raised interest rates aggressively, which, A, is not something we've seen going into past recessions.
MARTÍNEZ: NPR's David Gura, thanks a lot.
GURA: Thank you.
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MARTÍNEZ: As Indiana lawmakers consider a bill that would ban most abortions in that state, an Indiana doctor is speaking out after she found herself at the center of a national controversy around the issue.
FADEL: Dr. Caitlin Bernard provided an abortion for a 10-year-old girl from Ohio in late June, after the state's trigger ban prohibiting most abortions took effect.
MARTÍNEZ: NPR national correspondent Sarah McCammon covers reproductive rights. She sat down for an interview with Dr. Bernard yesterday. Sarah, why is she speaking out now?
SARAH MCCAMMON, BYLINE: Dr. Bernard has been silent for several weeks as she faced attacks from prominent conservatives who questioned both the story about the 10-year-old patient and her credibility. Some of those attacks continued even after a 27-year-old man was charged with the girl's rape in Ohio and after the state of Indiana produced documents that appeared to corroborate Bernard's account. And she told me she wants the public to understand, from her perspective as a doctor, what she sees.
CAITLIN BERNARD: I think what's been lost in the political discourse about abortion is that abortion is health care, that, again, there are so many situations that people may face for which abortion care is necessary, is lifesaving.
MARTÍNEZ: You mention she's been attacked by prominent conservatives and public officials. What's the impact been?
MCCAMMON: Yeah, she says she's experienced harassment, along with a lot of support in recent weeks. And she's worried about the safety of her family. In the past, she's faced threats, and the FBI has had to be involved. Indiana's attorney general, Todd Rokita, has repeatedly claimed, without providing evidence, that she's failed to properly report abortions. And speaking to a right-wing media outlet called "Real America's Voice" last week, he accused Bernard of using the girl to, quote, "further a pro-abortion narrative."
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TODD ROKITA: The last thing you call a person like that, who does that to a 10-year-old to further her ideology, the last thing you call her is a victim.
MCCAMMON: Dr. Bernard's attorney sent him a cease-and-desist letter and then, last week, sent a more formal notice as a first step toward a possible defamation suit. And in a statement to NPR yesterday, Rokita called that letter, quote, "an attempt to intimidate and obstruct his work." Here's how Bernard responded when I asked her about that.
BERNARD: One of us is the state attorney general, and one of us is a physician. And it's very clear who is being intimidated in this situation.
MCCAMMON: And she says her goal in all this is to make sure doctors feel safe providing care to patients in accordance with the law.
MARTÍNEZ: Now, lawmakers in Indiana, the place where the girl had to go, they're meeting this week to discuss a proposal to ban most abortions. Where does that effort stand?
MCCAMMON: Right. That bill, with narrow exceptions for rape and incest and to save a pregnant woman's life, is advancing in the Indiana Legislature. The state Senate is expected to debate it this week. Dr. Bernard says even a law with exceptions would put her patients in danger.
BERNARD: Medicine is not a list of exceptions. I cannot try to fit every single situation into a law. It's going to be very dangerous. We're going to see people who are forced to continue unsafe pregnancies, who are going to die because of those pregnancies. We're going to see young women forced to leave their home, travel far away for the care that they need.
MCCAMMON: And I should mention, A, West Virginia is also having a special session this week. Lawmakers there are looking at a bill that would make most abortions a felony.
MARTÍNEZ: NPR's Sarah McCammon, thanks for sharing that interview.
MCCAMMON: Thank you.
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MARTÍNEZ: The European Union has agreed to a plan that aims to cut gas consumption across Europe by 15%.
FADEL: This move comes the same week that Russian energy company Gazprom abruptly cut gas deliveries to Europe through one of its most important pipelines.
MARTÍNEZ: NPR's Rob Schmitz joins us now from Berlin to talk about all this. Rob, the EU came to this agreement quickly, but it did so after many of its members were able to get exemptions from having to make these cuts. So what did EU members agree to exactly?
ROB SCHMITZ, BYLINE: Yeah, EU members agreed to cut their gas consumption by 15% in spirit. But it's important to note here that these cuts are voluntary. They stop being voluntary, though, should Russia create an energy emergency by making sudden cuts in gas supplies to Europe.
MARTÍNEZ: And Russia did that, right?
SCHMITZ: Yeah, that's right. Not only did they do it this week, but this goes back several weeks, when Russian energy company Gazprom abruptly cut the flow of gas on its Nord Stream 1 pipeline by half. And then earlier this month, the company simply cut off all the gas in the pipeline for a 10-day period, and it resumed last week. But then it cut gas again this week. So as it stands, the pipeline, which connects Germany to Russian gas, is now flowing at 20% capacity. So given this as a backdrop, member states will now need to start looking for energy savings so that they can meet this 15% gas savings benchmark because many see future cuts from Moscow as likely. And if the Kremlin should do that in the winter, when Europe needs more of its gas for heating, then we're looking at a more dire situation.
MARTÍNEZ: Now, we mentioned on the cuts that not all EU member states will need to make them. Tell us about the exemptions.
SCHMITZ: Yeah, there are several EU countries that are not burning Russian gas for electricity or heat, so they've been granted exemptions, as have other countries that have already launched ambitious energy savings plans. I spoke to the German Marshall Fund's Jacob Kirkegaard about this, and here's what he said.
JACOB KIRKEGAARD: So, you know, once you factor in all these exemptions, it's pretty clear that the number of countries that have huge reliance on gas and none of these exemptions - well, they're going to be bearing most of the pain or most of the burden here. That is Germany, Austria and others - precisely, frankly, the way it should be.
SCHMITZ: And, A, Kirkegaard is not alone in this opinion. Many in Europe believe Germany - which, up to the war in Ukraine, relied on Russia for half its natural gas - should shoulder most of the burden here due to its risky decision to rely so heavily on Moscow for its energy in the first place. In fact, the original proposal was for all EU states to cut 15% of their gas consumption. But the southern European states that, long ago, decided not to rely on Russia for energy were angry, saying they shouldn't have to pay for what they saw as Germany's energy mistakes.
MARTÍNEZ: So then what is Germany doing to reduce that Russian gas reliance?
SCHMITZ: Quite a bit. Germany's parliament has passed a law that will fast-track construction of liquefied natural gas terminals, with the first one scheduled to be completed by the end of the year. That gas will be imported from the Middle East and the United States. The government is also conducting an energy survey right now to explore whether it should extend the life of three nuclear power plants that are scheduled to close by the end of the year. And we will know more on that option in a few weeks.
MARTÍNEZ: NPR's Rob Schmitz is in Berlin. Rob, thanks.
SCHMITZ: Thank you.
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MARTÍNEZ: This is the news that developed overnight. The Department of Justice is investigating former President Donald Trump as part of a criminal probe involving an effort to overturn the 2020 elections.
FADEL: That's according to reporting from The Washington Post. Now, we know that the DOJ has been looking into people Trump associated with, such as Rudy Giuliani. But this development suggests that investigators are taking a deeper interest in Trump's actions.
MARTÍNEZ: Yeah, that's important because no former president has ever been charged with a crime in the country's history. NPR will be following this story, so stay connected to NPR for analysis as this ongoing story develops. Transcript provided by NPR, Copyright NPR.
