Federal Reserve Interest Rates, Reports Reveal Iran War Costs, Kennedy Center Closure

0:02The Federal Reserve is expected to raise interest rates today for the first time in three years. The Iran war pushed inflation higher. How much more expensive could borrowing get? I'm Leila Faldil, that's A. Martinez, and this is Up First from NPR News. Two new reports put the cost of the Iran war above$30 billion. They also detail the damage to U.S. bases from Iranian attacks and shortages of key weapons. What do the reports reveal that the Pentagon has not? And the Kennedy Center Board says the historic arts complex is in dire condition and voted to shut it down. The decision came just after a judge said President Trump's name cannot go on the building.

0:42And Trump says he won't make renovations unless that changes. Stay with us. We've got the news you need to start your day.

0:53This message comes from Rosetta Stone. offering an alternative approach to language learning. Moving past rote memorization, the app guides users to intuitively think in a second language using images and contextual audio, mimicking how people acquire speech as children. The platform also includes advanced speech recognition technology that compares a learner's pronunciation directly with native speakers to refine accent precision. Learn more about their new Rosetta Stone Sapphire app at rosettastone.com. This message comes from NPR sponsor Carvana. Carvana makes car buying easy, 100 % online, prices down to the penny delivered to your door.

1:32Why make car buying hard when it could be easy? Visit carvana.com today. Terms may apply. This message comes from NPR sponsor Charles Schwab with its original podcast, Schwab Market Update, stock updates, monetary policy decisions, and more. Listen today and subscribe at schwab.com slash market update podcast or wherever you get your podcasts. The Federal Reserve is expected to raise interest rates today. Prices have been climbing faster than wages in recent months, so the typical worker has been losing ground. Inflation has been higher than the central bank wants it to be for a long time. NPR's Scott Horsley joins us now.

2:13Scott, it's been more than three years since the Fed has raised interest rates. Why do it now? A, the U.S. war with Iran has rekindled inflation, pushing oil and gasoline prices higher. The Congressional Budget Office warns the war is likely to keep putting upward pressure on prices into next year. Just today, AAA said the price of diesel had jumped to another record high,$6.31 a gallon. And Fed Chairman Kevin Warsh renewed his promise to get inflation under control when he spoke last month in Jackson Hole, Wyoming. Now, while higher interest rates won't automatically bring lower prices at the gas pump, raising rates is the Fed's primary tool for fighting inflation.

2:50And forecaster Omar Sharif says if the Fed doesn't use that tool after Warsh's hawkish speech last month, the Fed risks losing credibility. I just think it's time to either raise rates or just sell the market. We don't plan on raising rates. It doesn't really matter what happens with inflation. We're just going to sit tight. Investors are definitely anticipating that the Fed will deliver on Warsh's hawkish comments this afternoon. Market odds of a rate hike are north of 90%. Okay, so that's the answer to why on raising interest rates. Next question, Scott, how high? The Fed is expected to raise its benchmark interest rate by a quarter percentage point today.

3:26And then beyond today's meeting, we'll see what happens. The central bank has two more meetings on the calendar this year. It's possible the Fed could push rates higher, especially if inflation remains elevated. But Sharif suspects Warsh will temper any rate hike today with a cautious news conference so investors don't walk away thinking that additional rate hikes are necessarily baked in. In addition to the chairman's news conference, we're going to get a series of forecasts this afternoon from the other members of the Fed's rate-setting committee, indicating where they think interest rates might be going.

3:59Back in June, the average Fed policymaker was projecting only one quarter-point rate hike this year, followed by a rate cut next year. We'll see if those forecasts have changed now that we've had another burst of energy-related price hikes. Those forecasts, Scott, how reliable are they? Well, they're not a roadmap, and they're not a promise. They're really just kind of the series of best guesses of where the individual committee members think rates might be going based on their personal views of the economy. Obviously, wars and tariffs and other events can change those views and thus the outlook for interest rates.

4:33By the way, Chairman Wors will probably not offer a forecast today. He did not make one in June, and he is generally discouraged any kind of forward guidance. Wors thinks that can tie the Fed's hands and leave policymakers with less room to maneuver. Not all of his colleagues are on the same page, however. Fed Governor Chris Waller spoke at a Reuters event earlier this month, and Waller said he generally doesn't think it's helpful for the Fed to try to surprise people. If you were in the state transportation department and you were going to close down three lanes of a highway, you cannot say a word and let people just come piling into this construction zone.

5:07Or you can start giving them signs way in advance saying, look, there's construction ahead. I think we all would prefer to get the information prior to make better decisions. So we'll see how the traffic cones line up this afternoon. While the Fed set short-term rates, longer-term interest rates are set in the bond market, and they've been moving up. That's making it more expensive for anyone trying to get a loan to buy a house or a car or finance a growing business. That's NPR's Scott Horsley. Scott, thanks. You're welcome. All right, Scott, I just mentioned one report showing that the war with Iran drove up prices for consumers in the U.S.

5:37Now we turn to new details about the cost to the government. According to that report and one other, the Iran war has caused damage to U.S. bases, shortages in American weapons, and has a price tag well over$30 billion and climbing. For more, we're joined by NPR national security correspondent Greg Myrie. Greg, who's responsible for these reports? Yeah, one of them comes from the Congressional Budget Office and the other from the Pentagon's inspector general. And both of these are independent, nonpartisan agencies. Both reports detail the extensive damage to U.S. bases and military equipment like the U.S.

6:16naval base in Bahrain. And this is something the Pentagon has really not wanted to talk about. The Pentagon inspector general said the Iranian strikes damaged and destroyed, quote, hundreds of buildings and structures at U.S. bases, and it listed eight countries in the region where this has happened. Also, around 60 U.S. aircraft have been damaged or destroyed. Now, about half of these are Reaper drones, and they cost at least$30 million apiece, but also around a dozen refueling aircraft and several fighter planes. And we should remember that in past wars, the Pentagon held multiple briefings every week.

6:56We might get this kind of information over time, but briefings have been extremely rare under Defense Secretary Pete Hegseth. We've heard a lot of estimates about the cost of the war. Any more concrete figures, though? Yeah, these are giving us more detail, but they tend to be pretty much along the lines of what we've been hearing. The Congressional Budget Office put the cost so far at$38 billion. The Pentagon Inspector General came up with$33 billion. And these numbers are just above and below the$37 billion that Hegseth gave back in July. And all three are actually using slightly different cutoff dates.

7:33So they do seem to be pretty much in the same ballpark. Now, they do not count the cost of rebuilding these damaged U.S. bases. The CBO said it tried to get this information, but the Pentagon did not respond. And the Congressional Budget Office says if the war continues at roughly the same pace as the past few months, with a large U.S. presence and periodic fighting with Iran, this is going to add an additional$2 to$3 billion in monthly costs. Now, does the Trump administration accept those findings? Yeah, they really haven't said that much since the reports came out. The president did take to True Social before they came out, and he said that the U.S.

8:13was, quote, producing more exquisite and elite weapons than at any time in our history. But both these reports noted that the U.S. was using many Patriot interceptor missiles that shoot down Iranian ballistic missiles. The CBO says the military has burned up to two-thirds of the Patriots and it could take up to five years to replace them. The U.S. still has large stockpiles of many weapons, but the war has put a strain on some important munitions, particularly high-end defensive weapons. By the way, Greg, one more thing. I mean, how is the U.S. funding this war? Well, the Trump administration is asking for an additional$67 billion to cover the Iran war and pay for what it says are other urgent military needs.

9:00Now, Congress hasn't acted and it may not act before the November elections. As our colleague Scott Horsley noted a moment ago, inflation remains elevated and the Congressional Budget Office says the Iran war is one key reason. And it's also predicting that inflation will be about a half percentage point higher up until the first part of next year than it would have been without the war. All right. That's NPR's Greg Myrie. Greg, thanks a lot. Sure thing, eh?

9:37The board of the Kennedy Center has voted to shut the arts complex down. Yeah, less than an hour before that vote on Tuesday, a federal judge ruled that the board cannot add President Trump's name to the exterior of the building or its grounds. And there are still a lot of questions about what happens next. And joining us to help walk us through these questions is NPR culture correspondent Anastasia Siolkas. So walk us through the timeline of what happened yesterday. So Federal Judge Christopher Cooper's decision came down around noon, and then the board meeting started at 12.30 p.m. There was only one item on the agenda, to vote whether or not to close the center.

10:17The board says the center's in dire circumstances, both financially and structurally. The board meeting took place by Zoom, and a source with close knowledge of the meeting told me about it, but asked not to be identified because this person had not been authorized to speak to the media. This person said there was a very heated back and forth between President Trump, who is now chairman of the center, and Representative Joyce Beatty, the Democrat from Ohio, who is an ex-officio member of the board, and Beatty sued Trump and the rest of the board. Anyway, Trump and Beatty got into it, and the board voted for the shutdown.

10:51Within a couple of hours of that vote, though, Trump had posted about the court ruling on his Truth Social platform, and he vowed publicly not to go ahead with the renovation unless his name is on the building. Yeah, so on that, I mean, how are we supposed to take that? What are we supposed to make of that? Well, it's hard to know how seriously to take Trump's statement, but immediately Beatty's legal team filed that post with Judge Cooper. And as of late yesterday afternoon, Trump and the board had already filed an appeal. All right, so let's assume for the moment that the shutdown does indeed happen.

11:24Is that all planned out? At this point, there are honestly more questions unanswered than answered. We obtained the lengthy memo that the board received over the weekend prior to the vote. That only addressed structural matters at the center, not programming. For example, the board told Judge Cooper it intends to move two of the signature annual events, the Kennedy Center Honors and the Mark Troyn Prize somewhere else. Where and how is unclear? The board says it will continue to support the National Symphony Orchestra. How that's going to happen is unclear. For example, the orchestra has moved its upcoming concerts elsewhere.

12:02Where's it going to rehearse? Who will pay for it? That's unclear. And it's worth noting that none of the people on the board or in upper management, the Kennedy Center, have that kind of programming experience. Wow. So there's still a lot that we don't know. For sure. Last winter, when President Trump started talking publicly about this huge renovation he wanted to put on, I put together a long list of questions for the Kennedy Center officials. I've still received no answers. For example, will the public know what is being spent and on what? How transparent will the bidding process be? Are there any performing arts experts, people experiencing music, theater, or dance who will have any oversight or at least be consulted?

12:50what happens to the archives of the Kennedy Center, what happens to the valuable artworks and historical artifacts housed there. Many of those were gifted to the United States by foreign nations. All of these things are things I will continue to seek answers on. All right, that's NPR's Anastasia Sielkas. Thank you very much. Thanks so much for having me.

13:15And that's up first for Wednesday, September 16th. I'm Amy Martinez. And I'm Leila Fadil. Today's episode of Up First was edited by Raphael Naam, Andrew Sussman, Steve Drummond, Mohamed El-Bardisi, and Alice Wolfley. It was produced by Ziyad Butch and Nia Dumas. Our director is Christopher Thomas. We get engineering support from Zach Coleman. Our technical director is Carly Strange. And our supervising producer is Michael Lipkin. Join us again tomorrow.

14:00This message comes from MidiHealth. CEO Joanna Strober shares the personal experience that led her to start a virtual care platform for women in perimenopause and menopause. I was having anxiety. I had gained weight. I wasn't sleeping. And my primary care doctor never once said that perhaps I was in perimenopause and that all these things could be related to my hormones. So I had a really tough time for quite a while. And a friend recommended that I try a concierge doctor. She prescribed hormones for me, a combination of estrogen, progesterone, and testosterone. And I felt very relieved that I had this care.

14:37And I also had a lot of sadness that I had spent such a long period of time going through this and not getting the right care. And so essentially what we really want to do at MIDI is democratize access to this type of care. MIDI Health. Committed to helping women in midlife with paramenopause and menopause care. Accessible via telehealth visits. At joinmidi.com.