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US Dollar stocks fall after Fed keeps rates unchanged
The dollar fell on Wednesday, U.S. stock prices extended their losses, and interest-rate-sensitive two-year Treasury yields declined after the Federal Reserve kept interest rates unchanged. Meanwhile, oil?prices soared in response to renewed attacks across Middle East. The ?Fed's decision was largely expected, but three of the 12 members ?of ?the policy-setting Federal Open Market Committee dissented from the move that left the benchmark interest rate in the 3.50%-3.75% range in favor of a quarter-percentage-point hike. After major airstrikes resumed, oil prices rose by about 8%. This raises the possibility of further disruptions in already strained global energy supplies. This rally was boosted by data from the industry showing a decline in U.S. oil inventories. Bill Merz is the head of capital market research and portfolio development at U.S. Bank Wealth Management, Minneapolis. Oil prices rose, and expectations were raised that the U.S. The central bank may raise rates this week despite the fact that inflation in June was lower than expected. JP Powers said that this was expected after the June inflation print showed progress. "But with each meeting, we are creating more uncertainty than ever before." Fed funds futures traders now price in 60% odds that a rate increase will occur in September. The bigger question is how much pressure they will have to exert in order to raise rates in September. The market is expecting the next rate hike in September, as the inflation rate is high and crude oil prices are surging. The Dow Jones Industrial Average dropped 2.2% to 51,594.86, while the S&P 500 fell 1.5% to 7,316.39, and the Nasdaq Composite declined 1.7% to 24,442.94. The MSCI All Country World Price Index dropped by 1.1%, to its lowest level in June 2011. The yield on the benchmark U.S. 10 year notes increased 7.53 basis to 4.679%. This is due to concerns over future inflation. The dollar index (which measures the greenback versus a basket including the yen, the euro and others) fell by 0.45%, while the euro rose by 0.54% to $1.1447. Worries about tech giants The global markets have been volatile in the past month, as investors questioned the sustainability of AI spending. This is due to signs that U.S. major companies continue to invest billions of dollars into AI at the expense free cash flow. Meta missed earnings on Wednesday and lowered its annual capital budget forecast range as the social media giant focuses on building data centers to increase its AI computing power. The focus is now on returns, not spending plans. Investors are looking for evidence that AI capex generates revenues right now and also strengthens the future growth prospects," said Gina Martin Adams. Gina Martin Adams is chief market strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip technology and its cheaper AI models, investors are becoming more scrutinizing. Amazon.com and Apple are expected to release earnings this week. Even though SK Hynix reported a six-fold increase in its quarterly profit, it fell short of expectations. Its shares dropped 9.6%. South Korea's KOSPI fell 6% in a single day after falling more than 10% and reaching a new three-month low. South Korea will impose additional restrictions on leveraged single-stock exchange-traded fund (ETFs) in response. This includes a cap on an individual's investments of up to 20%. The pan-European STOXX 600 fell by 0.3% while the FTSEurofirst 300 index in Europe fell by 0.4%.
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US stocks continue to fall after Fed maintains rates
?U.S. Stocks remained lower for the day. Interest-rate sensitive yields on 2-year Treasury notes reversed an earlier rise and the dollar fell?on Wednesday, after the Federal Reserve kept interest rates steady. This was a move which economists had expected. The ?decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee that "preferred" a quarter-percentage-point hike at this meeting. The recent rise in oil prices, due to the return of the war against Iran, had some expecting that the U.S. Central Bank would raise rates this week. The U.S. central bank is still raising rates despite the fact that June's inflation data was lower than expected. JP Powers is chief investment officer of TWA Wealth Partners. He said that this was expected after the June inflation print revealed some progress. "But with each meeting, we are now creating more uncertainty than ever before." The Dow Jones Industrial Average fell 1.55% to 51,928.87. The S&P 500 dropped 0.50% to 7391.31 while the Nasdaq Composite declined 0.37% to 24784.10. The yield on the interest rate-sensitive 2-year Treasury note was unchanged at 4.277%. The yield on the benchmark U.S. 10 year notes increased 3.67 basis points, to 4.641%. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) fell by?0.25%, falling from 101.17. The oil prices rose by around 7% as major airstrikes resumed across the Middle East. This quelled hopes of an imminent end to the?Iran war. The rally was exacerbated by data from the 'industry showing a decline in U.S. oil inventories. Bill Merz is the head of capital market research and portfolio development at U.S. Bank Wealth Management, Minneapolis. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. The global markets have been volatile this month, as investors question whether the AI spending boom will last. This is despite signs that U.S. major companies are continuing to invest billions in the technology and continue to drain cash from their free flow. "The focus is shifting away from budgets to return on investment." Investors are looking for evidence that AI capex generates revenues right now and also strengthens 'the future growth prospects,' said Gina Martin Adams, chief strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip technology and its cheaper AI models, investors are paying more attention. The expectations have become so inflated that SK Hynix shares fell 9.61% despite a six-fold increase in its quarterly profit. South Korea's KOSPI - which has become emblematic for the wild swings of AI sentiment - fell almost 6% in a single day, after falling more than 10% and reaching a three month low. South Korea's finance ministry announced on Wednesday that it would introduce new restrictions on leveraged exchange-traded products, such as ETFs with single stocks. These will include a cap on individual investors who invest in these products. The pan-European STOXX 600 fell by 0.29% while Europe's FTSEurofirst 300 fell by 0.36%. The MSCI All Country World Price Index was down 0.45% in the last few days and had earlier dropped to its lowest level since 11 June.
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Official Israeli source: Trump and Netanyahu discussed all options, including an attack on Iran.
?U.S. In their meeting on Wednesday, President Donald Trump and Israeli Premier Benjamin Netanyahu discussed all possible ways to stop Iran's nuclear program, including diplomacy, pressure from the economy and force. The official told reporters in a press conference after the two men had met at the White House, on Tuesday that Netanyahu did not inform Trump of Israel's preference for an attack against Iran. The official stated that Trump's decision was final. The official stated that Trump had 'three options, all of which were discussed in detail: a deal, continuing the blockade, economic pressures and a massive strikes. Officials said there was evidence that?Iran’s clerical leaders have been rattled? by rising inflation, but that the impact on the global economy and the oil markets were also taken into consideration. The oil prices soared on Wednesday, one of the biggest spikes since the beginning of the war on February 28. This was due to a joint Israeli and U.S. aerial campaign against Iran. Tehran responded by launching strikes on Israel and Gulf States. Israel did not take part in the two-week U.S. airstrikes this month, which prompted Tehran to respond by firing on U.S. military bases. However, it has warned Tehran that it will strike back if attacked. The United States and Saudi Arabia attacked Iran-backed paramilitary groups on Wednesday. Trump promised to "beat the fucking sh*t" out of Iran after it fired at U.S. soldiers days after he stopped?air strikes. Iran has confirmed that it fired at U.S. bases in Jordan, as well as ships in the Strait of Hormuz. It also rejected an Omani proposal for a joint management of the Strait.
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SAIL and Krakatau Steel to invest $350 Million in a stainless steel plant
Two Indian sources said that India's state run Steel Authority of India and Indonesia's Krakatau Steel are planning to invest up to $350 million in a stainless-steel slab plant in Indonesia. Sources said that the?plant?will have a?capacity of?500,000 metric tonnes and will be operational in the next three to five years. SAIL and Krakatau Steel have signed a preliminary joint venture agreement in Indonesia to produce stainless steel plates. This was done during the visit of Indian Prime Minister Narendra Modi to Indonesia earlier this month. Sources said that SAIL will send a "technical" team to Indonesia in the next month to produce a feasibility study. After this, both companies will finalise details such as the equity structure, timeline for government approvals, and other details. Sources declined to be identified because the discussions aren't public. SAIL didn't respond to an email sent Monday seeking comment. Krakatau Steel?did not respond to an email request for comments made on Tuesday. Sources?said that the proposed plant's capability could be?expanded once it becomes operational. One source said that partnering with Krakatau Steel could help SAIL obtain nickel at a lower price, which is a crucial raw material for stainless steel production. Indonesia produces more than half of the world's nickel. The second source said that SAIL would consume all the output from the planned Indonesian facility, and then bring the stainless steel plates to its Salem plant to be rolled and finished. Salem is located in Tamil Nadu, a southern Indian state. Sources said that the state-run steelmaker would primarily sell the finished product to Indian clients, with a small portion?possibly being exported to Europe and the Middle East. According to commodities consultancy BigMint, SAIL was India’s third largest?steel manufacturer in the fiscal year ending March 2025. It held a 10.1% market share. India, which is the second largest producer of crude steel in the world after China, has identified Indonesia as well as more than a dozen?countries to cooperate with the steel industry. This will boost exports and ensure key raw materials. BigMint data shows that India's finished steel consumption has increased by 55% in the last five years. This is more than double the increase in production of 42%. Indian steelmakers are "pivoting" to the domestic market in order to offset weaker imports from Europe and Britain, but Chinese steel is sabotaging that strategy. (Reporting from New Delhi by Neha Arora; Additional reporting in Jakarta by Fransiska Nanangoy; Editing by Mayank Bhadwaj, Christian Schmollinger).
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Stocks fall as Mideast conflict reignites and Fed decision looms
U.S. stock prices fell, while oil and Treasury yields rose, as the fighting in the Iran war resumed just hours before the highly anticipated 'Federal Reserve interest rate decision due later on Wednesday. Although the Fed is expected to keep rates unchanged, traders have priced in roughly 34% of a rate hike. This is because rising oil prices are reigniting concerns over inflation which remains above the U.S. Central Bank's annual target of 2%. The markets have fully priced in a Fed rate hike for the September meeting. Chris Low, FHN Financial's chief economist, said that if oil prices continue to rise in September, then the Fed will determine that the shock has lasted for long enough to warrant a rate increase, or increases. The market also believes that some participants will make the case for rate hikes today...and there's a good chance they can convince a majority to support them. After major airstrikes resumed, oil prices rose more than 6%. This quelled hopes of an imminent end to Iran's war. This rally was exacerbated by data from the industry showing a decline in U.S. crude inventories. The Fed chairman Kevin Warsh prefers to give less "forward guidance" on the Fed's probable monetary path. The yield on the benchmark U.S. 10 year notes increased 2.45 basis points from late Tuesday to 4.629%. The Dow Jones Industrial Average dropped 1.37% to 52 024.98, the S&P 500 declined 0.62% at 7,382.73 while the Nasdaq Composite was down 0.83% at 24,670.23. EARNINGS TO SET TONE Investors will also be waiting for a wave key earnings. Microsoft and Meta are due to report their results after the close of markets, followed by Amazon.com, and Apple later in this week. Investors have questioned the sustainability of AI spending boom amid signs that U.S. major companies are continuing to invest billions in the technology and continue to drain free cash flow. The focus is now on returns from investment, not spending plans. Investors are looking for evidence that AI capex generates revenues right now and also strengthens future growth prospects, said Gina Martin 'Adams, Chief Market Strategist at HB Wealth. As China's competition intensifies in both the race to develop advanced chip models and Chinese firms rolling out cheaper AI models, there is a growing concern. Even a six-fold increase in SK Hynix’s quarterly profit failed to meet expectations, sending the shares tumbling by 9.61%. South Korea's KOSPI fell almost 6% in a single day, after falling more than 10% and reaching a three-month high. South Korea is responding by introducing additional 'curbs' on leveraged single-stock exchange-traded fund, or ETFs. This includes a cap that would limit an individual investor's investment to 20% of total assets. The pan-European STOXX 600 fell by 0.21% while Europe's FTSEurofirst 300 fell by 0.28%. The MSCI All Country World Price Index dropped by 0.57%, to its lowest level since June 26.
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Hungary's Paks Nuclear Plant will shut down one reactor due to a drop in the Danube water levels
Operator MVM announced that the Paks nuclear plant in Hungary will shut down one of the 'four reactors' at a time of?1300 GMT on Wednesday due to record low water levels along the Danube River, which provides cooling water for the facility. On Monday, the plant had already cut output by 254 Megawatts at another unit. The plant operates four Russian-built nuclear reactors with a combined 2 gigawatts of capacity. It produces almost?half of Hungary’s electricity. The shutdown on Wednesday will reduce production to?about 60 percent of its capacity. It follows?contingency steps taken in June, during a heatwave record. Authorities exempted this plant from temperature limits for discharged cooling waters. The water levels along the Danube are now at new record lows. This has disrupted cargo and river cruises on one of Europe's most busy?waterways. The Environment Minister Laszlo Gajdos stated earlier on Wednesday that the Hungarian water management authorities are ready to assist in ensuring cooling water supplies for the plant. He said that the authorities had placed four pumping pontoons, and two floating cranes near Paks in preparation for a possible deployment as water levels are expected to continue to drop over the next few days. Reporting by Gergely szakacs and Anita Komuves. Mark Potter edited the article.
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NextEra and Brookfield plan a $100 billion Kentucky datacenter campus
NextEra Energy and Brookfield are building a $100 billion campus of data centers at an 'ex-uranium enrichment site' in Paducah, Kentucky. The soaring demand for electricity in the United States is driving companies to invest heavily into artificial intelligence data centres and other technologies that strain an aging U.S. electric grid. NextEra is the largest U.S. power company and will provide 2.6 GW in battery storage and 2 gigawatts (GW) of natural gas to support the datacenter. Brookfield, on the other hand, will own and operate the 1.8 GW campus. One gigawatt can power approximately 750,000 homes. The campus will be built on the Department of Energy’s Paducah Site. This site was originally constructed in 1952 for the production of enriched uranium, but it was closed down later. NextEra said the project complies with the Trump Administration's "Ratepayer Protection Pledge" which seeks?to ensure that companies building and using data centres?pay over?and above normal rates to avoid costs being passed on to average households. Brookfield CEO Bruce Flatt said in a statement that "the Department of Energy Paducah Site will be the seed of a plan to invest 100 billion dollars?in AI Infrastructure". The project should be completed in 2032. Reporting by Vallari Shrivastava, Bengaluru. Editing by Tasim Zaid
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Allied Gold's $4 Billion sale to China's Zijin falls through, lands a $295 M investment
Zijin Gold & Allied 'Gold has scrapped its planned C$5.5 Billion ($3.90 Billion) buyout. Instead, the?Chinese?company took a 9.2% share for around $295 M. In premarket trading, shares of Allied Gold listed in the U.S. fell by nearly 15%. The companies announced on Wednesday that they had mutually agreed to allow the deadline of July 29 to expire as "there was no reasonable likelihood" that the remaining conditions would be met in a reasonable time frame. Allied also cited broader external factors affecting trans-border transactions at this scale but did not provide any further?details. Zijin Gold operates mining operations in Asia, Africa and South America, while the Canadian firm has gold mines,?development and development projects on the Ivory Coast, Mali, and Ethiopia. In January, Zijin announced its agreement to purchase Allied for C$44 a share. ZIJIN?REMAINS INVESTOR Zijin has agreed to purchase approximately 12.8 million newly-issued Allied shares for?C$32.55 each in a private placing for the '9.2% stake. The transaction is expected to close around August 10. Allied stated that it 'expects' to use the proceeds - including the completion and ramping up of the Kurmuk Mine in Ethiopia and the expansion of the Sadiola Mine?in Mali - to advance growth initiatives. It also said they expect the proceeds -including increasing production – at their Ivory Coast operations, and funding exploration across the business. ($1 = 1.4098 Canadian dollars) (Reporting by Arunima Kumar in Bengaluru; Editing by Vijay Kishore)
What Trump 2.0 could suggest for trade, migrants, climate change and electric vehicles
Donald Trump's 2nd governmental term might have big implications for U.S. trade policy, environment modification, the war in Ukraine, electrical automobiles, Americans' taxes and unlawful migration.
While some of his project proposals would need congressional approval, here is a summary of the policies he has said he will pursue when he takes workplace in January:
MORE TARIFFS
Trump has actually drifted the idea of a 10% or more tariff on all items imported into the U.S., a relocation he states would eliminate the trade deficit. But critics say it would result in higher prices for American customers and worldwide financial instability.
He has likewise said he ought to have the authority to set greater tariffs on countries that have actually put tariffs on U.S. imports. He has threatened to impose a 200% tariff on some imported cars, stating he is determined in particular to keep vehicles from Mexico from coming into the nation.
However he has also suggested that allies such as the European Union might see higher responsibilities on their items. Trump has actually targeted China in particular. He proposes phasing out Chinese imports of products such as electronics, steel and pharmaceuticals over four years. He seeks to prohibit Chinese companies from owning U.S. real estate and facilities in the energy and tech sectors.
Trump has stated tariff is his preferred word and views them as revenue generators that would help fill government coffers.
MASS DEPORTATIONS
Trump has actually promised to renew his first-term policies targeting unlawful border crossings and to advance with sweeping new limitations.
He has actually vowed to limit access to asylum at the U.S.-Mexico border and to start the biggest deportation effort in American history, which would likely set off legal difficulties and opposition from Democrats in Congress.
He has stated he will utilize the National Guard, and, if essential, federal soldiers, to accomplish his objective, and he has not ruled out establishing internment camps to process individuals for deportation.
Trump has actually stated he would look for to end automated citizenship for kids born to immigrants, a relocation that would run against the long-running analysis of the U.S. Constitution's 14th Change.
He has likewise suggested he would withdraw protected legal status for some populations such as Haitians or Venezuelans.
Trump states he will reinstitute the so-called travel ban that limits entry into the United States of people from a. list of largely Muslim-dominant nations, which stimulated. several legal battles during his first term. Some of Trump's earliest visits reflected an urgency to. follow through on his immigration program. Trump has named a. border czar, Tom Homan, and will make Stephen Miller, the. architect of his migration strategies, a White House deputy chief. of personnel.
DRILLING AWAY
Trump has sworn to increase U.S. production of nonrenewable fuel sources. by relieving the allowing process for drilling on federal land. and would encourage new natural gas pipelines. He has actually said he. would reauthorize oil drilling in the Arctic National Wildlife. Sanctuary in Alaska. Trump has vowed to develop a National Energy Council to. coordinate policies to enhance U.S. energy production that will be. led by his choice for interior secretary, North Dakota Guv. Doug Burgum.
Whether the oil industry follows through and raises. production at a time when oil and gas rates are fairly low. stays to be seen.
Trump has actually stated he will once again pull the United States out of. the Paris Environment Accords, a structure for decreasing worldwide. greenhouse gas emissions, and would support increased nuclear. energy production. He would likewise roll back Democratic President Joe Biden's. electric-vehicle mandates and other policies aimed at minimizing. automobile emissions.
He has actually argued that the U.S. requires to be able to enhance energy. production to be competitive in developing synthetic. intelligence systems, which consume large quantities of power.
TAX RELIEF. In addition to his trade and energy programs, Trump has actually guaranteed to. slash federal guidelines that he says limit task creation. He. has actually vowed to keep in place a broad 2017 tax cut that he signed. while in workplace, and his economic group has actually gone over a further. round of individual and business tax cuts beyond those enacted. in his very first term.
Trump has promised to decrease the corporate tax rate from 21%. to 15% for business that make their items in the U.S.
. He has stated he would look for legislation to end the tax. of suggestions and overtime incomes to help waiters and other service. employees. He has actually vowed not to tax or cut Social Security. benefits.
Trump also has stated that as president he would pressure the. Federal Reserve to lower interest rates - however would stop brief. of requiring it.
A lot of, if not all, of his tax proposals would require. congressional action. Spending plan experts have actually cautioned that the bevy. of tax cuts would balloon the federal financial obligation.
DOING AWAY WITH DIVERSITY PROGRAMS
Trump has promised to need U.S. colleges and universities. to safeguard American custom and Western civilization and to. purge them of variety programs. He stated he would direct the. Justice Department to pursue civil liberties cases against schools. that engage in racial discrimination.
At K-12 schools, Trump would support programs permitting. parents to utilize public funds for private or religious. instruction.
Trump likewise wishes to eliminate the federal Department of. Education, and leave states in control of education.
NO FEDERAL ABORTION RESTRICTION
Trump appointed three justices to the U.S. Supreme Court who. became part of the bulk that got rid of Roe v. Wade's. constitutional protection for abortion. He likely would continue. to appoint federal judges who would maintain abortion limitations.
At the same time, he has said a federal abortion restriction is. unnecessary and that the problem must be resolved at the state. level. He has actually argued that a six-week restriction favored by some. Republicans is excessively extreme which any legislation should. include exceptions for rape, incest and the health of the. mom.
Trump has actually suggested he would not seek to limit access to the. abortion drug mifepristone after the U.S. Supreme Court rejected. a difficulty to the federal government's technique to regulating it.
He supports policies that advance in vitro. fertilization (IVF), contraception and prenatal care.
A PUSH TO END WARS. Trump has actually been vital of U.S. assistance for Ukraine in its war. with Russia, and has actually said he might end the war in 24 hr if. elected - although he has not stated how he would attain this.
He has suggested Ukraine may need to yield a few of its. territory if a peace deal is to be struck, a concept Ukraine has. consistently declined. Trump's choice for his nationwide security advisor, U.S. Representative Michael Waltz, was vital of the Biden. administration's decision in November to permit Ukraine to use. U.S.-provided rockets to strike within Russian territory.
Trump has likewise said that under his presidency the U.S. would. fundamentally rethink NATO's purpose and NATO's mission.
Trump called U.S. Senator Marco Rubio, a China hawk, as his. secretary of state, charged with performing his diplomacy. objectives. Trump has backed Israel in its fight against Hamas in Gaza but. has urged it to finish up its offensive. He can be anticipated to. continue the Biden administration's policy of equipping Israel. At. the same time, Trump is most likely to promote historical. normalization of relations in between Israel and Saudi Arabia, an. effort he made during his 2017-2021 presidency and which Biden. has likewise pursued.
Trump has stated if he ends up being president, he will stop the. suffering and destruction in Lebanon, however has actually not said how he. will achieve that.
He has recommended building an iron dome - an enormous. missile-defense guard comparable to Israel's - over the entire. continental United States.
Trump has actually likewise drifted sending out militaries into Mexico to. fight drug cartels and using the U.S. Navy to form a blockade. of that country to stop the smuggling of fentanyl and its. precursors. His shift team has been preparing lists of potential. high-ranking U.S. military officers to fire as part of a purge. of the Pentagon of those believed to be disloyal to Trump.
EXAMINING OPPONENTS, HELPING ALLIES. Trump has vowed at times to use federal police. companies to investigate his political foes, including election. officials, attorneys and party donors. Trump tapped former U.S. congressman Matt Gaetz as his attorney. basic. Gaetz has actually recommended he is supportive to Trump's. vengeance program.
Along that line, Trump has actually said he will think about designating. a special district attorney to probe Biden, though he has actually not specified. the grounds for such an investigation.
And he has actually stated he would think about firing a U.S. lawyer. who did not follow his directives - which would constitute a. break with the longstanding U.S. policy of an independent. federal law enforcement apparatus.
Trump has actually said he will consider pardoning all of those who. have been founded guilty of criminal activities in connection with the Jan. 6,. 2021, attack on the U.S. Capitol.
In addition to criminal investigations, he has actually suggested. utilizing the federal government's regulatory powers to punish those he. views as critics, such as television networks.
PURGING THE FEDERAL BUREAUCRACY
Trump would look for to annihilate what he terms the deep state. -- career federal employees he says are clandestinely pursuing. their own programs-- through an executive order that would. reclassify thousands of employees to allow them to be fired. That. would likely be challenged in court. He has stated he will establish an independent federal government effectiveness. panel headed by billionaire advocate Elon Musk and previous. governmental candidate Vivek Ramaswamy to root out waste in the. federal government. The federal government currently has watchdogs such as. the Workplace of Management and Budget, and investigators basic. at federal agencies.
Trump would crack down on federal whistleblowers, who are. generally shielded by law, and would set up an independent. body to monitor U.S. intelligence firms.
(source: Reuters)