🚨 Axios PM: Behind Waltz's shuffle

Happy (almost) Friday! Today's newsletter, edited by Natalie Daher, is 817 words, a 3-min. read. Thanks to Carolyn DiPaolo for copy editing.

⚡ Situational awareness: President Trump is releasing his 2026 budget tomorrow. Axios' Hans Nichols scoops. It will be the first official indication of how he wants to fund the government and outline his priorities.

Mike Waltz has been a dead man walking in the White House for the past month, and the outgoing national security adviser started to act like it, Trump administration sources tell Axios' Marc Caputo and Barak Ravid.

• But instead of outright firing him, President Trump nominated him for United Nations ambassador. He asked Rep. Elise Stefanik (R-N.Y.) to withdraw her nomination for the role to preserve the House's slim GOP majority.

🖼️ The big picture: Signalgate badly damaged Waltz, but it wasn't his only problem. He got on the wrong side of everyone from conspiracy theorist Laura Loomer to White House chief of staff Susie Wiles.

🧨 Behind the scenes: Waltz didn't work as well with other Cabinet and White House officials as was hoped.

• On a trip to Greenland in March, Vice President Vance counseled him about "working more collaboratively," a senior White House official told Axios at the time.
• The former Florida congressman and Green Beret also treated Wiles with a dismissive attitude, two officials said.
• "He treated her like staff and didn't realize he's the staff, she's the embodiment of the president," one of them said. "Susie is a deeply loyal person and the disrespect was made all the worse because it was disloyal."

🗣️ Then came Loomer, the social media influencer who has crusaded against what she claims are "disloyal" people and "neocons" who never should have been hired in Trump 2.0.

• In a meeting with Trump a month ago, Loomer urged him to fire some of the staffers Waltz had appointed, and shared an old video of Waltz criticizing Trump years ago.
• "When you stack everything on Waltz, he just couldn't survive. Laura Loomer gets a confirmed kill," an administration adviser familiar with the discussions said.

👀 The intrigue: In recent days, Wiles began collecting names to replace Waltz but kept the process and discussions strictly under wraps.

• Trump envoy Steve Witkoff has been floated in some reports but isn't interested in the job, a source familiar told Axios.

Trump announced Waltz's new gig on Truth Social, saying Waltz had "worked hard to put our Nation's Interests first."

• Secretary of State Marco Rubio will serve as interim national security adviser — underscoring his growing importance to Trump.

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McDonald's comparable sales fell 3.6% at U.S. stores, its worst showing since the pandemic, in a sign that people are pinching pennies because of recession fears, Axios' Nathan Bomey and Kelly Tyko report.

• Signs of a fast-food slowdown are spreading: Starbucks saw comparable sales decline in Q1, and Domino's Pizza said customers are opting for cheaper carryout over delivery.
• 🍗 Wingstop CEO Michael Skipworth flagged "a meaningful pullback in our business" in "specific pockets," including Hispanic customers and "lower middle income" consumers.

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🎁 The doll debate also continues.

• After President Trump acknowledged toy shortages could happen over tariffs, top adviser Stephen Miller argued today that "almost every American consumer" agrees they'd pay more for an American-made doll, Axios' Avery Lotz writes.
• Miller emphasized the administration's persistent argument that tariffs would force manufacturers to produce more goods in the U.S.
• But domestic retailers fear the trade war with China will leave prices higher and shelves empty.

😰 What to watch: Concerns about job losses and fears about price hikes from Trump's tariffs have fueled what Conference Board senior economist Stephanie Guichard recently called "pervasive pessimism about the future."

Instagram supports federal legislation requiring app store parental approval and age verification for teens under 16.

Here's why: Today, teens can download any app — even ones parents don't want them to. Federal legislation putting parents in charge could help keep teens safe.

Learn more.

1. 🎮 Microsoft raised prices for Xbox video game consoles by $80 to $100 more per model. The tech giant didn't reference the impact of tariffs specifically in its announcement, but its updated support page cited changing "market conditions." Go deeper.
2. ⚖️ A federal judge ruled that the Trump administration unlawfully cited the Alien Enemies Act in deporting alleged Venezuelan gang members to El Salvador. Go deeper.
3. 🛍️ Kohl's CEO was fired after four months in the job over allegations he violated conflict-of-interest standards. The struggling department store chain has had significant turnover in the C-suite as it tries to reinvent itself amid three straight years of sales declines. Go deeper.

With a new pope comes new ecclesiastical threads.

• Italian tailors who haven't yet received orders are preparing for the transition, AP reports.
• They're making garments like cassocks (clerical cloaks) ahead of the Conclave to elect Pope Francis' successor that starts Wednesday.

Raniero Mancinelli, 87, is preparing the white fabric for suits in three sizes, hoping they'll be selected to be worn by the new pope.

Portraits of late popes hang at the sixth-generation Gammarelli ecclesiastical tailor shop in Rome.

Federal legislation requiring app store parental approval and age verification for teens under 16 would put parents in charge of teen app downloads – and help them keep teens safe.

Why it's important: 3 of 4 parents agree that teens under 16 shouldn't be able to download apps without their approval.

Learn more.

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