Tulsi Gabbard to Resign as US Intelligence Director | Balance of Power: Late Edition 5/22/2026

Key Concepts

• Federal Reserve Independence: The swearing-in of Kevin Worsh as the 17th Fed Chair and the political pressure regarding interest rate policy.
• Energy Policy & Abundance: The "Operation Gigawatt" initiative in Utah, focusing on nuclear energy (SMRs), geothermal, and natural gas as a bridge to energy independence.
• Geopolitical Conflict: Ongoing tensions with Iran, the closure of the Straits of Hormuz, and the resulting impact on global energy prices (oil, diesel, and natural gas).
• National Security: The resignation of Director of National Intelligence (DNI) Tulsi Gabbard amid reports of being sidelined by the administration.
• Market Dynamics: A record-breaking rally in the S&P 500, the role of AI-driven demand for memory chips (Micron Technology), and the potential for a SpaceX IPO.

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1. Federal Reserve Leadership and Independence

Kevin Worsh was sworn in as the 17th Federal Reserve Chair by Supreme Court Justice Clarence Thomas.

• Reform Agenda: Worsh aims to move away from "static frameworks" and "Fed speak" (such as the dot plot and summary of economic projections).
• Independence: President Trump publicly stated, "Don't look at me. Don't look at anybody. Just do your own thing," though analysts suggest this independence will be tested if Worsh does not cut rates once the conflict with Iran concludes.
• Market Outlook: Analysts note that despite the desire for rate cuts, inflation remains a barrier, and Worsh faces a "sales job" to convince the Open Market Committee to shrink the balance sheet and return to a regime of "scarce reserves."

2. National Security and DNI Resignation

Tulsi Gabbard announced her resignation as DNI, effective June 30, citing her husband’s bone cancer diagnosis.

• Internal Discord: Reports indicate a disconnect between Gabbard and the White House, specifically regarding foreign intervention. She was notably absent from key situation room meetings concerning Venezuela and Iran.
• Political Navigation: Observers noted that Gabbard attempted to maintain deference to President Trump during Congressional hearings while distancing herself from the administration's hawkish stance on Iran. Aaron Lucas will serve as the acting director.

3. Energy Strategy: The "Operation Gigawatt" Framework

Governor Spencer Cox (Utah) and Michael Katzios (White House Chief Science and Technology Policy Adviser) discussed the administration's "all-of-the-above" energy strategy.

• Nuclear Expansion: The administration claims the most significant progress in civil nuclear power since 1953, citing expedited permitting and the development of Small Modular Reactors (SMRs).
• SMR Milestones: At least three SMRs are expected to "go critical" within 14 months. These reactors offer flexibility, serving both as grid-connected power and "behind-the-meter" solutions for energy-intensive data centers.
• Abundance Mindset: Governor Cox emphasized moving away from a "scarcity mindset," advocating for geothermal and nuclear to provide dispatchable, reliable power that solar and wind cannot currently provide at peak demand.

4. Economic Indicators and Market Performance

• Stock Market: The S&P 500 achieved an eighth consecutive week of gains, a near-unprecedented streak. The rally is attributed to corporate earnings and investor comfort with the current interest rate environment.
• Commodities: Mike McLoone (Bloomberg Intelligence) noted that while crude oil prices are high due to the closure of the Straits of Hormuz, the U.S. is a net exporter of LNG and crude, which should eventually stabilize supply.
• Micron Technology: CEO Sanjay Mehrotra confirmed a $200 billion investment in U.S. manufacturing (Boise, Idaho; Manassas, Virginia; and Syracuse, New York) to meet the surging demand for memory chips driven by AI.

5. Political Developments and War Powers

• War Powers Resolution: Republican leadership pulled a resolution by Gregory Meeks from the floor due to a lack of guaranteed votes, signaling a potential shift in Congressional support for the administration's war policy.
• Democratic Autopsy: President Trump mocked the release of the Democratic Party’s 2024 election autopsy, which attributed their loss to "crappy candidates" and "bad policy."
• Presidential Schedule: President Trump’s decision to skip his son’s wedding to focus on the "Iran situation" has fueled speculation regarding potential military escalation over the Memorial Day weekend.

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Synthesis and Conclusion

The current landscape is defined by a tension between aggressive domestic industrial policy—specifically in energy and semiconductor manufacturing—and the volatility of foreign conflicts. While the administration pushes for "abundance" through nuclear and tech investment, the political and economic stability of the country remains tethered to the resolution of the conflict with Iran. The legislative branch is showing signs of increased friction with the executive, particularly regarding war powers, suggesting that the coming months will be a critical test of the administration's ability to maintain control over both its policy agenda and its party's legislative unity.