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FirstFT: Matt Gaetz challenges House speaker Kevin McCarthy

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Good morning.

Matt Gaetz, the firebrand Republican congressman from Florida, has moved to oust the Speaker of the House of Representatives, setting the stage for a dramatic vote within 48 hours to determine Kevin McCarthy’s political fate.

Gaetz took the bold step late yesterday, just two days after the Speaker brokered a deal with Democrats to avert a costly government shutdown.

Gaetz told the House he was introducing a resolution “declaring the office of Speaker of the House of the Representatives to be vacant”. It marks only the third time in US history that a motion to vacate has been filed in an attempt to remove a Speaker.

It comes after months of acrimony between the two men, and sets the stage for a make-or-break vote for McCarthy that must take place within two days, or by Wednesday evening. McCarthy will need a majority of the House to vote in his favour if he is to stay in his post. Here’s what could happen next.

And here’s what else I’m keeping tabs on today:

  • Sam Bankman-Fried trial begins: Jury selection begins in the New York trial of the FTX founder, who faces criminal charges that carry a combined maximum sentence of more than a century in prison. Here are some of the central figures in crypto’s most high-profile trial.

  • Monetary policy: Raphael Bostic, president of the US Federal Reserve’s Atlanta branch, will participate in a roundtable in Atlanta on the 2024 economic outlook, focusing on inflation, rising interest rates and the labour market.

  • Economic data: Economists expect August job openings in the US to have held steady at about 8.8mn from July.

  • Nobel Prize in Physics: The Nobel award for physics will be announced today. Yesterday Katalin Karikó and Drew Weissman took the award in medicine for their work that led to mRNA Covid-19 vaccines.

Five more top stories

1. Exclusive: Canada has been told by India that it must repatriate roughly 40 diplomats by October 10, according to people familiar with the matter. New Delhi, which has previously said it wanted “parity” in the number and grade of diplomats each nation posts to the other, has threatened to revoke the diplomatic immunity of any diplomats who remain in the country following the deadline. Demetri Sevastopulo in Ottawa has the full story.

  • Opinion: Despite their courtship of New Delhi, the west cannot turn a blind eye if Canada produces convincing evidence of India’s alleged role in the killing of Hardeep Singh Nijjar, writes Gideon Rachman.

2. Former president Donald Trump was accused of knowingly lying about his net worth — inflating it by as much as $2.2bn per year — in order to secure bank loans on advantageous terms from Deutsche Bank and other lenders, on the first day of a New York trial. The jury will consider charges brought by Letitia James, the New York attorney-general, against Trump and his co-defendants, including insurance fraud and falsification of business records. Josh Chaffin reports on the sometimes surreal first day of the trial.

3. Microsoft’s chief has called the idea that users have choice in internet search “bogus” because of contracts that make Google the default search engine on mobile devices. At an antitrust trial pitting Google against the US Department of Justice, Satya Nadella also testified that he had explored whether Apple would switch to an agreement with Microsoft’s search engine Bing. Here’s more from Nadella’s testimony.

4. German sandal maker Birkenstock is set to be valued at more than $9bn in an initial public offering this month. In an updated prospectus, Birkenstock said that it would sell stock at between $44 and $49 per share, which would raise up to $1.6bn for the company and its private equity owner L Catterton. Here’s why the valuation is raising hopes for a revival of the IPO market.

5. The US has expressed concern to Peru that China is gaining control over critical parts of the South American nation’s infrastructure, including electricity supply to the capital Lima and a new megaport on the Pacific coast. “On the big geostrategic issues, the Peruvian government is not sufficiently focused on analysing the benefits and threats to the country,” a US official told the Financial Times.

The Big Read

A montage of Greta Thunberg on a loudspeaker with industrial cooling towers in the background and graph points with US dollar bill images running along the bottom
© FT montage/Getty Images

ESG ratings influence, and in some cases dictate, which stocks and bonds make it into the $2.8tn of investment funds that are marketed as sustainable, lending legitimacy to companies and investors that claim to be green. Yet that power is now coming under intense formal scrutiny. Regulators and politicians around the world are asking questions about how the ratings are derived — and whose interests they really serve.

We’re also reading . . . 

  • Kristalina Georgieva interview: The IMF’s chief has backed reforms that could eventually give Beijing more voting power. “There is a need to constantly change to reflect how the world economy is changing,” she told the FT.

  • ‘Each time it has gotten harder’: Funding for Ukraine is becoming an increasingly divisive issue in Congress. FT reporters canvass reaction to Saturday’s vote. Thanks to all our readers who voted in yesterday’s poll — 75 per cent said the US must back its ally.

  • Artificial Intelligence: When it comes to AI and democracy, we cannot be careful enough, the international policy director at Stanford University’s Cyber Policy Center writes.

Chart of the day

Line chart of Percentage appreciation showing Renewable energy stocks’ gloomy third quarter

Renewable energy stocks have sold off sharply in recent months, significantly underperforming fossil fuel companies, as higher interest rates take a toll on the sector. The S&P Global Clean Energy Index, made up of 100 of the biggest such companies, is set for its worst annual performance since 2013.

Take a break from the news 

Adventurous tailoring, barely-there dresses and a designer debut — at Paris Fashion Week brands including Alexander McQueen, Balenciaga and Valentino played to their strengths, writes FT fashion editor Lauren Indvik.

Naomi Campbell at the McQueen show
Naomi Campbell at the McQueen show © Dave Benett/Getty Images for Alexander McQueen

Additional contributions from Tee Zhuo and Benjamin Wilhelm

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