Inside the First Flight of the Qatari-Gifted Air Force One

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0:33Marcus Weisgerber:Fed Chairman Kevin Warsh says the inflation outlook is improving.

0:38Lauren Weber:Expectations of inflation over the first four months, first four weeks of this period, they've come down. Inflation risks have come down.

0:47Marcus Weisgerber:But won't say if the central bank should lift rates. Plus, President Trump takes his maiden flight on the new Air Force One plane that was gifted by Qatar. And the signature trade agreement between the U.S., Canada and Mexico is in doubt. It's Wednesday, July 1st. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:16Marcus Weisgerber:Federal Reserve Chairman Kevin Warsh said today that the risks of higher inflation have receded in his first weeks on the job. He sees that as evidence that markets have already grasped his hard line on prices. Wors was speaking at a conference of central bankers in Portugal. He's long argued that the Fed should say less about its outlook for the economy. And today, he sidestepped questions about future rate decisions and brushed aside complaints that investors need a clearer sense of how the Fed would adjust as the outlook changes.

1:44Lauren Weber:There has been a tendency, and I take plenty of blame from this, the 08 crisis, where we were trying to suppress volatility, where we thought we needed to spoon-feed markets to get out of that. That was the right policy for a crisis. It is not the right policy for the time that we have now.

2:00Marcus Weisgerber:Markets are anticipating a rate increase later this year, though interest rate futures are still expecting a hold at the next meeting later this month. It's July 1st, the start of a new month and a new quarter. There are several government programs that kick off today, plus at least one with a future that's in doubt. First, we've got education grants. A growing number of students are enrolling in trade schools instead of a four-year college degree. Now the financial aid system is catching up with them. Starting today, Pell Grants, the federal financial aid used for college, are available for short-term vocational programs.

2:34Marcus Weisgerber:These workforce Pell Grants are an effort to get more people training for jobs that have been hard to fill for years, like paramedics and HVAC specialists. For more, I'm joined now by journal reporter Lauren Weber. Lauren, this expansion was part of President Trump's big, beautiful bill that Congress passed last year. What was the thought or the goal behind this?

2:53Lauren Weber:The goals were two-pronged. On the one hand, it's to make this kind of training more accessible. It's also designed to help employers because for many of these roles, they've had shortages. It's been hard to hire people. So the idea is that students are on the path to a well-paid, in-demand career and also that employers can fill the open jobs that they have.

3:13Marcus Weisgerber:The idea of expanding federal scholarships for vocational programs has been discussed in Congress for a long time. Why did it take so long to get to this place where they're actually doing it?

3:23Lauren Weber:A huge roadblock was the issue of how do we make sure that this money is only going to high-quality programs? You have colleges, universities, they have to go through a whole accreditation process. You do have accreditation for trade schools and for community colleges, but it's a little bit more of a wild west in terms of making sure that there are high-quality standards. So there was a lot of negotiation among legislators about making sure that there are guardrails around the quality of the programs that are going to be eligible for this money.

3:55Marcus Weisgerber:How much can someone who applies for one of these grants expect to get?

3:59Lauren Weber:That's another place where this differs from the typical Pell grants. So for a four-year college degree, students are eligible for up to around$7 ,400 a year. For the Workforce Pell grants, the Congressional Budget Office did some projections, and they're expecting that grants will be around$2 ,200. This is for an 8 - to 15-week program, so it makes sense that they're less.

4:20Marcus Weisgerber:That was Journal Reporter Lauren Weber. Thanks, Lauren. Thank you for having me. Also starting today, a major expansion of Medicare coverage. A pilot program will offer weight loss drugs for a$50 a month copay, much cheaper than the$450 a month many seniors had to pay before. Up to 20 million people in Medicare will likely be eligible. The new covered drugs are Novo Nordisk's Wegovi and Eli Lilly's Zetbound injection and Foundayo pill. The coverage is expected to cost billions of dollars, and the government says it'll run through the end of next year. Beyond that, Medicare has to convince insurers to keep participating.

4:56Marcus Weisgerber:And something that's not being extended today, it was the deadline to renew the USMCA. That's the trade agreement between the U.S., Mexico, and Canada that underpins nearly$2 trillion in annual trade. Canada and Mexico were eager to extend the deal for 16 years. But the U.S. declined to do so. That wasn't exactly a surprise. President Trump's tariffs effectively ripped up parts of the deal. The U.S. refusal means that American trade representatives will meet every year for a decade, with Mexican and Canadian officials to continually review the deal. And the U.S. has some demands, including that it wants a more level playing field to reduce trade deficits with its neighbors.

5:33Marcus Weisgerber:While you shouldn't expect to feel the impact of this change on prices, it does have an economic effect. Companies are holding back on long-term investment plans, and that's hurting the economy in Mexico and Canada. Coming up, investors catch a sneak peek of a SpaceX AI prototype, and deals from the Middle East made up a notable portion of President Trump's income last year. That's after the break.

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6:30Marcus Weisgerber:Today, President Trump flew to North Dakota for the opening of Theodore Roosevelt's presidential library. But it's worth noting how he got there. It was the first flight of his new Air Force One, a Boeing 747-8 luxury jet donated to the U.S. by the Qatari government last year. Trump had complained that the presidential planes he flew on were too old and small. The new plane is two stories tall, and it's so big that the U.S. Air Force built a$300 million custom hangar complex to accommodate it at Joint Base Andrews. Journal National Security reporter Marcus Weisgerber joins me now from Washington.

7:04Marcus Weisgerber:Marcus, the plane's paint job, red, white, navy, and gold, resembles the look of Trump's personal jet. What is it like on board, and how does it compare to the previous presidential plane? The previous plane is very utilitarian, is the way the general who's overseeing the whole project described it to me.

7:22Lauren Weber:The Qatari plane, the new current Air Force One, is a lot more luxurious. The Air Force did not do a lot to change the interior of this plane, with the exception of a few pictures, presidential seals and such, instead of contemporary artwork and exit signs that were in Arabic previously. Swapped them out with some English language exit signs. And the number one priority was to make sure the plane was safe and to make sure the president has the ability to communicate. They put in a communications system that the president needs to be able to conduct business as if he was at the White House and be able to do secure video and voice calls and also be able to, say, transmit the nuclear codes if there is a nuclear war on hand.

8:02Marcus Weisgerber:This refurbishment, which cost$400 million, addressed a number of things, as you've mentioned. But one concern going into it was the cybersecurity risks from this plane. Did the refurbishment address that at all?

8:15Lauren Weber:So much of what is involved in Air Force One are classified. You ask them how they did it, and they will not give you specific answers. They will just say stuff like what capabilities of the U.S. government brings to bear has been used to actually check this thing. And as a program manager from L3 Harris Technologies, who did the modification, told me a few weeks ago, he's like, I hate to say just like, trust me, but, you know, trust me.

8:39Marcus Weisgerber:Taking a step back for a second, both Republicans and Democrats have criticized Trump for even accepting this plane in the first place. There were concerns about the ethics and the perceived conflicts of interest. Trump has largely dismissed this criticism. But is it still kind of swirling around or is it really a non-issue at this point?

8:57Lauren Weber:No, it definitely is. You know, you're still seeing this debate over what happens to the plane when the president leaves office. He's expressed his desire to have an Air Force One in his presidential library in Miami. This plane, though, as the military has told me, it'll be around for as long as it's needed. We've seen a lawmaker, Joe Courtney, from Connecticut introduce an amendment to the National Defense Authorization Act to try to actually block Trump from using it as a private jet after he leaves office. One key thing to keep in mind is that the ownership of the plane is by the Air Force.

9:36Lauren Weber:And after it goes out of service, the National Museum of the U.S. Air Force in Dayton, Ohio, takes over that decides essentially where it goes. And museums can apply to get an Air Force One. Now that the museum is under the jurisdiction of the Secretary of the Air Force, who is a political appointee who reports up through the defense secretary to the president of the United States. So politics could indeed also play a role into who gets what.

9:58Marcus Weisgerber:That was WSJ national security reporter Marcus Weisgerber. Thanks, Marcus.

10:02Lauren Weber:Thank you.

10:06Marcus Weisgerber:On this morning's show, we talked about President Trump's unprecedented income, as seen through his most recent round of financial disclosures. The biggest identifiable foreign region in the disclosures was the Middle East. Entities from the Gulf paid around$300 million to the president's businesses last year. Those include$263 million from the sale of half his stake in the cryptocurrency company World Liberty Financial to an entity backed by a top royal in the United Arab Emirates. The remainder of the Gulf money came from two Middle East developers who have launched Trump-branded towers and golf courses in the region in the past three years.

10:41Marcus Weisgerber:Journal Finance reporter Elliot Brown says that's raising some concerns about conflicts of interest.

10:46Lauren Weber:The president has a total foreign policy priority in the Gulf. And at the same time, you have the very countries that he's talking with on the foreign policy side, giving him enormous amounts of money. I mean, it's unprecedented to have a president sort of still atop a business where you can tell what all the assets are. Usually they just put it in a blind trust where they don't know what's going on. And with Trump, his business is being run by his sons, but he gets the wealth from it. The White House has been quite explicit that the president has never engaged or will ever engage in conflicts of interest.

11:21But the challenge from an ethics

11:24Lauren Weber:perspective is he knows where the money is coming from. The worry is that that clouds his policy judgment. It's very difficult to separate these things.

11:34Marcus Weisgerber:In market trading today, the Dow was flat and the S &P and Nasdaq slipped. The Nasdaq led the losses and closed down 0.7 percent. And Bending Spoons, an Italian company that seeks to revamp tech brands, popped in its stock market debut today. Bending Spoons owns internet pioneer AOL as well as the video platform Vimeo and the event's website Eventbrite. Its shares closed up about 40 percent. The journal is exclusively reporting that Elon Musk's SpaceX has recently shown investors a prototype for an AI device that looks like a phone. It has a sleek design that's slimmer than an iPhone with a proprietary operating system.

12:12Marcus Weisgerber:It would use a Qualcomm Snapdragon chipset. SpaceX told investors that the project's at an early stage. It's not clear if the device will actually be made. Spokespeople for the company and for Qualcomm didn't immediately respond to requests for comment. And that's what's news for this Wednesday afternoon. Today's show is produced by Anthony Bansi and Alexis Moore with supervising producer Tali Arbel. I'm Alex Oseleff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

13:06Lauren Weber:If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now.