There was anticipation, there was exasperation at the wait, and then there it was: a guilty verdict against Donald Trump, delivered by a jury of 12 New Yorkers after two days of deliberation. In fact 34 guilty verdicts, all for falsifying business records. Never before has a former American president been convicted of a crime. Nor has a major-party candidate sought the presidency with a felony record. The overriding question now is whether it will upset Mr Trump’s chances in this year’s race: if the election were held today, polls suggest, he would beat Joe Biden.
The U.S. Department of the Treasury building is seen in Washington, D.C., Jan. 19, 2023.
Saul Loeb | Afp | Getty Images
The U.S. government drifted further into red ink during May, with a burgeoning debt and deficit issue getting worse, the Treasury Department reported Wednesday.
After running a short-lived surplus in April thanks to tax season receipts, the deficit totaled just over $316 billion for the month, taking the year-to-date total to $1.36 trillion.
The annual tally was 14% higher than a year ago, though the May 2025 total was 9% less than the May 2024 shortfall.
Surging financing costs were again a major contributor to fiscal issues, with interest on the $36.2 trillion debt topping $92 billion. Interest expenses on net exceeded all other outlays except for Medicare and Social Security. Debt financing is expected to run above $1.2 trillion for this fiscal year, totaling $776 billion through the first eight months of the fiscal year.
Tax revenue has not been the problem. Receipts rose 15% in May and are up 6% from a year ago. Expenditures increased 2% monthly and are up 8% from a year ago.
Tariff collections also helped offset some of the shortfall. Gross customs duties for the month totaled $23 billion, up from $6 from the same month a year ago. For the year, gross tariff collections have totaled $86 billion, up 59% from the same period in 2024.
However, yields have held higher — after dipping last summer into September, they turned up in direct opposition to Federal Reserve rate cuts, eased in the early part of the year, then moved higher again following President Donald Trump’s April 2 “liberation day” tariff announcement. The 10-year Treasury yield is virtually unchanged from a year ago around 4.4%.
In recent weeks, Wall Street leaders including JPMorgan Chase CEO Jamie Dimon, BlackRock CEO Larry Fink and Bridgewater Associates’ Ray Dalio have warned of turmoil that could come from the onerous debt burden. The deficit is currently running more than 6% of gross domestic product, virtually unheard of in peacetime U.S. economies.
In 1957 nine African-American pupils attempted to register at Little Rock Central High School in Arkansas. The previously white-only school was belatedly complying with a Supreme Court decision, Brown v Board of Education, issued three years before that ordered the desegregation of schools. Yet, after braving a mob of some 300 who heckled and hissed, the students found their entry barred by members of the Arkansas National Guard, summoned by the segregationist governor, Orval Faubus. The president, Dwight Eisenhower, soon resolved the crisis by federalising the entire Arkansas National Guard, wresting it from the control of the governor. The very guardsmen who had been ordered to prevent the pupils’ attendance now escorted them into the building.
Most Americans are only dimly aware of the many functions that the National Guard perform. Its establishment long predates the formation of the United States by more than a century. Recent events are forcing examination, though. On June 7th, President Donald Trump federalised units of the California National Guard, over the strident objections of Gavin Newsom, the state’s governor. Mr Trump’s action came after deportation raids in Los Angeles provoked protests, some of them violent.
The National Guard in Little Rock, Arkansas in 1957
Video: Getty
Ordinarily, state National Guards are under the control of governors. Most of their members hold civilian jobs for much of the year, but can be mobilised for emergencies such as natural disasters or unrest. They are the modern-day versions of the colonial state militias; their role is enshrined in the constitution. Article I assigns Congress the power “to provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions”. Yet they also are reservists for the professional military services and can be commanded by the president and deployed abroad when needed.
In the two decades after Little Rock, state governors or the president mobilised the Guard regularly, often in response to unrest, though for other purposes too. In March 1970 Richard Nixon, then the president, ordered the deployment of almost 29,000 soldiers to distribute letters amid a postal workers strike. It was not a particularly effective solution, and soon a bargain was struck to get the mailmen back to work.
Little Rock, Arkansas
Sep 25th President Eisenhower directed the National Guard, along with the army, to protect black schoolchildren who were trying to attend a previously segregated school
Birmingham, Alabama
Jun 11th George Wallace, the pro-segregation governor, blocked black students from attending the state university. President Kennedy directed guardsmen to let them through. Mr Wallace relented
Selma and Montgomery, Alabama
Mar 25th Civil rights leaders planned a march from Selma to Montgomery, but were brutally turned back by police. When they tried to repeat the march two weeks later, President Johnson ordered the Guard to protect them, over Mr Wallace’s objections
Detroit, Michigan
Jul 23rd Civil-rights riots flared across the country during the 1960s, many of which were dealt with by state National Guards under the command of their governor. Detroit’s were among the worst. Governor George Romney deployed the National Guard to quell the riots, and Mr Johnson agreed to deploy army units to the city
Multiple cities
Apr 4th After Martin Luther King junior, a civil-rights leader, was assassinated in Memphis, riots broke out in cities across the country. President Johnson deployed 13,600 troops to Washington, DC alone. Federal forces were also deployed to Baltimore and Chicago
Kent, Ohio
May 4th Governor Jim Rhodes called in the National Guard to disperse anti-war protesters at Kent State University. They did not disperse; some threw rocks. The guardsmen opened fire, killing four students
Los Angeles, California
Apr 29th Four Los Angeles police officers had been filmed beating Rodney King, a black man. When they were acquitted, enraged Angelenos protested. Rioting carried on over six days. Governor Pete Wilson deployed Guard units and President George H.W. Bush deployed federal troops
Multiple cities
May 26th A Minneapolis policeman murdered George Floyd, a black man, during an arrest. Protests started in the city the next day and spread nationwide. By early June, dozens of states had called out their National Guard to control protests, which continued for months
One infamous and ugly use of the National Guard came in May 1970, to put down anti-Vietnam War student demonstrations. President Richard Nixon had announced that America would expand the war in Vietnam to Cambodia. A day later, students at Kent State University in Ohio started protesting. These demonstrations soon escalated into clashes with the police. James Rhodes, Ohio’s governor, called the National Guard in. The guardsmen instructed the protesters to disperse. They did not. Soldiers threw tear-gas; protesters chucked rocks. Eventually the guardsmen opened fire, killing four students. Their deaths prompted large protests and student walk-outs across the country, though in a Gallup poll shortly after the shootings more than half of respondents said the students were to blame, compared with barely a tenth who held the National Guard responsible.
Kent State University shootings, Ohio in 1970
Video: Getty
After this, the public and politicians soured on the idea of calling in the Guard. The next time they were deployed amid unrest in the continental United States was over two decades later. In April 1992 four police officers were acquitted of the beating of Rodney King, a black man, despite it having been caught on film. Enraged Angelenos took to the streets in protest, leading to several days of rioting and 63 deaths. Pete Wilson, California’s governor, deployed the National Guard. Several days later, George H.W. Bush sent several thousand soldiers, marines and federal police, too. More recently, in 2020, dozens of states called in the Guard during nationwide protests against the killing of George Floyd, another black man, by police.
Guard truths
The very public spat between Mr Trump and Mr Newsom has prompted both sides to exaggerate the purpose of the mobilisation. America’s armed forces are not actually carrying out deportations. A longstanding principle of English common law is that troops are prohibited from carrying out domestic law-enforcement operations. In America this was formalised in the Posse Comitatus Act of 1878, which bans the practice unless specifically authorised by Congress or the constitution.
Chart: The Economist
So far, Mr Trump has authorised a limited mission to the 4,000 members of the National Guard under his command that does not involve making arrests. They are to protect federal buildings and personnel. Department of Justice lawyers have long argued that presidents hold this so-called “protective power”. For Mr Trump to assign the guardsmen and recently deployed marines tasks of keeping the peace, he would have to invoke another authority like the Insurrection Act. This law, enacted in 1807, does not require the president to obtain the consent of a state’s governors in order to deploy troops there when “unlawful obstructions, combinations or assemblages, or rebellion against the authority of the United States, make it impractical to enforce the laws”. In such cases, the president can use troops “as he considers necessary to enforce those laws or to suppress the rebellion”.
What is different about Mr Trump’s deployment is that it seems to have inflamed the protesters in the name of keeping the peace. The state of California has filed suit claiming that the president’s actions were illegal. Courts are generally reluctant to restrict presidential actions premised on national security, says Chris Mirasola, a law professor at the University of Houston. But even if they did, Mr Trump could easily invoke the Insurrection Act, which would enable him to go further than he already has. Any ensuing violence would be treated as post-hoc justification for mustering troops in the first place. In such a case, it would also be harder for federal judges to intervene, for instance by declaring that the conditions of “insurrection” or “rebellion” had not been met.
National Guard troops deployed to Downtown Los Angeles on June 9, 2025
Image: Getty Images
Neither Mr Newsom and Mr Trump seem prepared to back down. There is, unfortunately, political upside in a protracted showdown for both men: Mr Newsom is plainly angling to be the next president and picking fights with the current administration burnishes his resistance credentials. Mr Trump would rather fight with his Democratic antagonists over immigration enforcement and imposing law-and-order, which he believes the silent majority backs him on, than reckon with his chaotic tariff policy or faltering diplomatic efforts. The president has extensive powers—ones that he is expected to exercise judiciously, in the interest of the country rather than himself or his party. The question is not whether Mr Trump is acting legally—he probably is—but whether or not he has the self-restraint to act rightly. ■
U.S. Vice President JD Vance speaks, during a tour of Nucor Steel Berkeley in Huger, South Carolina, U.S., May 1, 2025.
Kevin Lamarque | Reuters
President Donald Trump and Vice President JD Vance are now double-teaming the Federal Reserve in an effort to get lower interest rates.
In a social media post Wednesday morning on X, Vance echoed his boss’s urging that the central bank ease monetary policy, after the latest inflation readings showed that tariffs are yet to exert any substantial upward pressure on inflation.
“The president has been saying this for a while, but it’s even more clear: the refusal by the Fed to cut rates is monetary malpractice,” Vance wrote.
The statement followed a Bureau of Labor Statistics report showing that the consumer price index increased just 0.1% both on the all-items reading and the core that excludes food and energy. On an annual basis, the respective inflation levels stood at 2.4% and 2.8%, both above the Fed’s 2% goal.
While Trump had yet to address the CPI numbers himself Wednesday, the president has been badgering Chair Jerome Powell and his cohorts on the Federal Open Market Committee to cut rates. The Fed last eased in December, and officials lately have expressed concern over the longer-term impacts that tariffs will have on prices. Trump has said he wants a full percentage point cut from the current target level for the fed funds rate at 4.25%-4.5%.
The FOMC will release its interest rate decision in a week, and markets are assigning zero probability of a rate cut following the two-day meeting. Traders expect the Fed to ease in September, according to CME Group data.
Administration officials have emphasized the easing inflation data as well as a moderating labor market as reasons to lower rates.
“To me, that combination says it may be time for another rate cut, but I expect the Fed to emphasize the ongoing uncertainty and a desire to not act too early. It’s a tough spot,” said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Asset Management.