By Damian Paletta

Good morning. In 1996, then-Federal Reserve Chairman Alan Greenspan used the phrase "irrational exuberance." He was referring to investors who were so excited about chasing stocks that they were overlooking the downside risks. Drunk with excitement about what might go right, investors didn't anticipate what might go wrong.

Thirty years later...

The Justice Department, after being admonished by a federal judge and a Republican senator, is still investigating the Fed over an elaborate, complicated construction project. The U.S. attorney leading the investigation, Jeanine Pirro, is close with President Trump and is on a short-list of people talked about as the next attorney general.

Trump has long had a beef with the Fed, to put it mildly, and has alleged there could be some funny business going on with this construction work. A federal judge has already told Pirro's office to knock it off, essentially saying the subpoenas issued so far are meritless, and Sen. Thom Tillis (R., N.C.) has said the investigation is a political attack. He has vowed to block any Fed nominee until the probe is over.

The probe ain't over, it appears. And neither is Trump's fury.

This week, some federal investigators showed up at the Fed's construction site. Why? It's unclear. All hell broke loose. Tillis posted a meme (these are the days of our lives, it appears) of The Three Stooges with the caption "The U.S. Attorney's Office for D.C. at the crime scene."

Nyuk nyuk nyuk. (crossing that phrase off my newsletter bingo card).

One person who probably isn't laughing: Kevin Warsh, Trump's pick to be the next chairman of the Fed. His confirmation hearing before the Senate Banking Committee is supposed to be next week. On that committee: Tillis.

This is an edition of the Politics newsletter, bringing you an expert guide to what's driving D.C. every day. If you're not subscribed, sign up here.

People and Policies I'm Watching

Iran war: Follow the Journal's live coverage. The U.S. and Iran have agreed in principle to meet again for negotiations but haven't settled on a date and venue. Trump said that the leaders of Israel and Lebanon would speak on Thursday, the highest-level talks between the two countries in decades.

Pentagon briefing: Defense Secretary Pete Hegseth and Chairman of the Joint Chiefs of Staff Gen. Dan Caine have a briefing with reporters set for 8 a.m.

Trump's Thursday: The president is scheduled to get his intelligence briefing at 11 a.m. Eastern before heading to Las Vegas. There, he will participate in a "No Tax on Tips" roundtable discussion at 4 p.m.

What I'm Following

Trump is working to crank up economic pressure on Iran, even as he has declared that the war is "very close to over." His conundrum is that he said he would be announcing "other countries" that will be involved with the U.S. blockade against Iranian commercial ships and oil tankers, but none have stepped forward -- and many have refused. Meanwhile, as Trump says the war will end soon, some officials and analysts estimate it could take months or longer for the Iranian regime to feel enough economic pain from the blockade to yield in the negotiations.

Eric Swalwell's flameout is pushing powerful Democrats to say what they knew and when. With the former California congressman and onetime California gubernatorial candidate accused of sexual misconduct, the scandal has resurfaced old questions about Capitol Hill culture and the power dynamics between elected officials and their subordinates. It is a uniquely modern one, involving graphic photos sent on Snapchat and an online campaign against Swalwell by content creators.

Associates of Trump with ties to his businesses pushed him to increase the number of visas for seasonal guest workers. The January meeting where Trump's associates made their pitch came after the administration late last year said it planned to slash the number of seasonal worker slots, known as H-2B visas, to roughly 30,000 below the previous year's nearly 65,000. Weeks after the meeting, the administration quietly reversed itself and released the maximum number of visas allowed under the law.

What Else Is Happening

   -- Gov. Kathy Hochul has thrown New York City Mayor Zohran Mamdani a 
      lifeline on his plan to raise taxes on the wealthy, with a proposal to 
      tax luxury second homes that raises revenues without targeting the city's 
      top earners. 
 
   -- Supreme Court Justice Sonia Sotomayor publicly apologized to Justice 
      Brett Kavanaugh after suggesting last week that he didn't know any 
      blue-collar workers because he had a privileged upbringing. 
 
   -- The administration wants automakers and other U.S. manufacturers to play 
      a larger role in weapons production reminiscent of a practice used during 
      World War II. 
 
   -- The FTC and a coalition of eight states have reached a proposed 
      settlement with top advertising companies to resolve a probe into whether 
      the firms broke antitrust laws by coordinating boycotts against platforms, 
      including Elon Musk's X. 
 
   -- Seeking a noncontroversial nominee to lead the CDC, the administration is 
      expected to pick Erica Schwartz, a physician who served in the U.S. Navy 
      before joining the U.S. Public Health Service Commissioned Corps and the 
      U.S. Coast Guard. 

What I'm Reading

   -- Thune Urges DOJ to Finish Powell Investigation Ahead of Warsh 
      Confirmation (Washington Examiner) 
 
   -- Jared Kushner's Mysterious Role in the Trump Administration (The 
      Atlantic) 
 
   -- On Ruben Gallego, We Told You So (Washington Free Beacon) 

About Me

I'm Damian Paletta, The Wall Street Journal's Washington coverage chief. I've covered Washington for 22 years as a reporter and editor. I've covered the White House, Congress, national security, the federal budget, economics and multiple market meltdowns.

WSJ Politics brings you an expert guide to what's driving D.C., every weekday morning. Send your feedback to politics@wsj.com (if you're reading this in your inbox, you can just hit reply). This edition was curated and edited in collaboration with Joe Haberstroh and Mali Michelle Fleming. Got a tip for us? Here's how to submit.

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April 16, 2026 06:50 ET (10:50 GMT)

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