Red Sea Change
Weeks of September 4-17, 2026
Published in conjunction with The Nation magazine, TRACKING THE CRISIS is a weekly round-up from The Democracy Collaborative tracking the administrative, legislative, and other actions of the Trump Administration as well as the many forms of legal and movement response from across a broad range of social, political, and economic actors. TDC is providing this service for collective informational purposes, as a tool for understanding the times during a period of disorientingly rapid flux and change in the U.S. political economy. This round-up is produced by humans, not by Artificial Intelligence. TDC should not be understood as endorsing or otherwise any of the specific content of the information round-up.
TRUMP TRACKER: Administration actions
Turning point in Middle East conflict as Houthis capture key Red Sea corridor, strike Saudi oil infrastructure. The strategic equation in the ongoing Middle East conflict has shifted dramatically in the last 10 days as Iran-allied group Ansarallah, also known in the West as the Houthis, made significant territorial and strategic gains in their renewed war against Saudi Arabia and the Saudi-backed government of Yemen.
While Iran and the United States continued to exchange escalating strikes on ships allied with either side in the Strait of Hormuz – with the IRGC directly targeting U.S. military vessels on September 5 and the United States sinking five Iranian tankers in one day on September 8 – the Houthis launched a ‘lightning offensive’ against Saudi-allied Yemeni forces as well as Saudi Arabia itself, and by September 11 had captured the entire western coast of Yemen and consolidated control over the crucial Bab el-Mandab Strait. The offensive marks the biggest escalation in Yemen’s long-simmering conflict between the Houthis, Saudi Arabia, and Saudi-backed Yemeni government forces since a UN-brokered truce halted large-scale fighting in 2022.
On Tuesday, September 8, Houthi forces launched dozens of drones and missiles into Saudi Arabia itself, striking several Aramco oil facilities across four cities in attacks that left more than 70 wounded. In retaliation, Saudi Arabia launched more than 50 airstrikes across Yemen in a 12-hour period on Wednesday, September 9, while Houthi ground forces captured the coastal districts of Hays and Al-khawkhah. Over the next two days, Houthi forces advanced rapidly southward down the western coast of Yemen, capturing the key port city of Mocha on September 10. According to Al Jazeera, after fierce battles at Al-Waziyah and a Houthi takeover of the Khalid ibn-Walid military base, Saudi-backed military forces “abandoned their positions” in Mocha, allowing Houthi forces to easily take over the city.
After capturing Mocha, Houthi forces “met little resistance” as they swept south along the coast, taking the southern port cities of Dhubab and Murad, the final coastal town that had still been under government control. Houthi naval forces then pushed offshore, capturing the islands of Mayyun and Zuqar in the Bab el-Mandab Strait. By midday on Friday, September 11, just over 18 hours since the fall of Mocha, Houthi forces seized Perim Island, a key strategic site marking the narrowest point in the Bab el-Mandab Strait, thus consolidating their control over the critical shipping route through which 12% of global trade passes. On the same day, drones reportedly launched from Iraq blew a hole in Saudi Arabia’s East-West oil pipeline, the main land route the kingdom had been using to bypass the Strait of Hormuz to get its oil to global markets, sending up a massive plume of black smoke that could be seen from space.
Houthi military spokesman Yahya Saree issued a statement hailing their victory, saying that the offensive, officially launched on September 3, aimed to end what the Houthis described as the “years-long siege and aggression against Yemen,” and expelled Saudi-backed forces from six districts covering 5,400 square kilometers. The statement also claimed the liberation of Yemeni prisoners held by Saudi-backed forces and announced successful air defense operations, including the downing of nine aircraft. Houthi-issued statements also called on government forces to lay down their arms in exchange for full immunity from future ‘prosecution.’ Houthi forces also captured hundreds of millions of dollars’ worth of U.S.-made military equipment such as M1 Abrams armored carriers and other materiel that had been left behind by the retreating Saudi-aligned forces, posting videos on social media of Houthi soldiers inspecting and operating the captured equipment.
The Houthis also received official congratulations from Tehran, as an adviser to Supreme Leader Mojtaba Khamenei praised Ansarallah and declared: “Iran’s might in the Strait of Hormuz and the homegrown resolve of the resistance have driven the U.S. and its allies into a tactical and strategic impasse.” Iranian national security chief Ebrahim Azizi praised the Houthis as “besieged and bombed, yet unbowed,” stating that “in an era where some regional rulers trade sovereignty for empty promises, Yemen stands alone against imperial hegemony on behalf of the entire region.” Houthi politburo representative Hazem al-Assad reassured global markets that “freedom of navigation in the Red Sea and the Bab el-Mandab Strait” will remain “safe and orderly,” excepting only Saudi-flagged vessels.
The swift and decisive Houthi victory came as a shock to many in the Gulf states and their Western allies, as it revealed capabilities hitherto unseen in the long-standing Yemeni conflict. Mohamad Elmasry of the Doha Institute for Graduate Studies told Al Jazeera that over the last several years and with assistance from Iran, the Houthis had developed a “fighting force that is probably more advanced than the force that the Saudis were fighting against about a decade ago.” AI company Anthropic said that an audit of their systems identified at least three separate users from Yemen who had been using its Claude LLM agent to develop “navigation, guidance and control software” for new missile and drone systems.
Area analysts and experts who have closely studied the region attributed the success of the historic offensive to the Houthis’ relatively strong cohesion and resolve compared to the ideological and political fragmentation that had plagued official Yemeni government forces and the Saudi-backed mercenaries that supported them. A Western-based source told CNN that part of the reason the Houthis took Mocha so easily was because Yemeni forces were severely depleted, with up to 80% of their official roster revealed to be a “ghost army” made up of individuals who were receiving checks from the government but had not actually reported for duty.
Andreas Krieg, a lecturer at King’s College London, told Al-Jazeera that “what we are seeing now is a picture of a highly fragmented anti-Houthi front, where different patrons [such as Saudi Arabia and the UAE] have bought their loyalties through money, where people and also militias have been assembled to basically compete over domestic constituencies” in southern Yemen “without actually ever focusing on the Houthis in the north.” Al-Jazeera correspondent Yousef Mawry noted that the recognized Yemeni government had itself been divided, and its forces in Mocha were aligned with the former ruler Ali Abudllah Saleh, who has his own differences with the current Yemeni regime; and that it would be difficult to “put together a unified front” to counter the Houthis and recapture strategic territories. University of Tehran professor Mohammed Marandi credited the strength of the Houthis’ ideological cause to protect Yemen, which he called an ancient “civilizational state,” against Saudi Arabia, a monarchical nation-state formed in modern times to benefit “just one family” (the House of Saud).
Perhaps no observers were as shocked at the surprise offensive and decisive victory as the House of Saud, which at a critical moment found itself bereft of support from its strongest ally, the United States, after decades of having invested trillions of dollars in the U.S. economy and defense industry ostensibly in return for security guarantees. According to Axios, Saudi ruler Mohammed bin Salman, reportedly “in desperation,” called Trump twice on Thursday, September 10, urging the United States to bomb the Houthis as they closed in on the city of Mocha – a request that Trump declined.
This week, Reuters revealed that at a clandestine meeting held in the Omani capital of Muscat on Sunday, September 13, the Trump Administration made a “secret deal” with the Houthis to refrain from attacks on Houthi-held territories and from support for Saudi Arabia or Saudi-backed forces in any form, in return for guarantees that the Bab el-Mandab Strait would remain open to commercial shipping except for Saudi-flagged vessels. Even if the United States had been willing to back the Saudis, retired U.S. Army general Barry McCaffrey noted on X that “we do not have the U.S. air power to crack both the Iranians and their Houthi proxy. Logistics will fail our brave Navy. We have no allies.”
Saudi Arabia’s woes deepened this week as the Houthis pressed their attacks on the kingdom itself, striking key oil production and refining facilities in Yanbu, Abha and Dammam on September 15, each affecting more than 400,000 barrels of production per day. Along with the halting of service on the damaged East-West pipeline, which serves at least 4% of global oil production, the main arm of the Saudi economy has been dealt a crippling blow from which it will take weeks or months to recover. On Tuesday, September 15, reports emerged that the Houthis were beginning to lay mines across the Bab el-Mandab Strait, mirroring the hazard set out by Iran in the Strait of Hormuz.
Also on Tuesday, Saudi Arabia was forced to postpone or cancel all of its late-September crude oil shipments to Europe, as global oil prices surged past $108 per barrel. According to financial analyst Arnaud Bertrand, the Saudi regime is “bleeding money at an accelerating rate,” which could push it into a sort of ‘inverted petrodollar’ situation where “instead of recycling oil profits into U.S. Treasuries, they’ll be forced to sell them to cover oil losses caused by U.S. wars.”
With no support from the United States and with its own stocks of U.S.-made air defense munitions severely depleted, Saudi Arabia sought military backing this week from other regional and Western allies, including members of its newly formed defense pact with Pakistan and Turkey. On Wednesday, September 16, Saudi Arabia accused the Houthis of crossing a “red line” by targeting the holy city of Mecca with a drone, which the Houthis denied; according to AP, “the region responded with condemnation but no sign of military support.” Even Israel declined to endorse preemptive strikes against the Houthis, with senior intelligence sources telling Al-Monitor that “at the moment, no one has deterrence over the Houthis. Not the Americans, not us, and certainly not the Saudis. They are the dark horse that no one expected.”
Ansarallah leader Abdul Malik al-Houthi delivered public remarks on Thursday, September 17, denouncing Saudi Arabia’s accusation of an attack on Mecca as “propaganda and lies” designed to “justify and rationalize what they are perpetrating against our people” as well as “instigate and provoke others to rally support.” His claims were backed by Iranian Foreign Affairs spokesperson Esmail Baghaei, who noted that several ‘false flag’ attacks have already been used as a justification for escalation in the U.S.-Iran conflict, and condemned both aggression against Islamic holy sites as well as the Saudis’ claim, saying: “The Islamic Republic of Iran emphasizes the necessity of preventing the politicisation of the issue of Islamic sanctities and their security, and of not using it as a tool to incite strife and escalate regional tensions.”
Also on Thursday, Saudi Arabia appealed to China for help, citing disruptions to global trade, and China has privately asked Iran to help rein in the Houthi offensive and prevent further energy supply disruptions. Reuters reported Thursday morning that the response from Tehran was that “stability and peace in the region would depend on ending the U.S.-Israel war on Iran.”
Crude prices surge to over $100 per barrel, average price of diesel in U.S. tops $6 per gallon as global oil crisis intensifies, sparking protests around the world. With the Houthis’ capture of key sites along the Bab el-Mandab Strait, the ‘Axis of Resistance’ is consolidating control over two of the world’s most critical chokepoints in the global supply chain, particularly but not exclusively regarding energy. Brent crude prices have remained above $100 per barrel for a week straight since the Houthi offensive against Saudi Arabia effectively cut off Saudi oil exports, affecting more than 4% of global supply. Oil price spikes have also been driven to a lesser extent by Ukrainian strikes on Russian oil refineries, despite Trump’s urging Zelenskyy to halt strikes on oil infrastructure. Soaring insurance rates and fuel costs have raised the price of commissioning oil tankers to a record $1 million per day, up to 500% above the cost of shipping before the Iran war began.
On Monday, September 14, the Wall Street Journal reported on a dire warning issued by top oil executives that “the Great Fuel Crisis” has arrived. Speaking at an energy conference in Austin, Texas on Friday, September 11, Chevron CEO Mike Wirth warned that the various “mechanisms” put into play to “mitigate the price and supply risk” in energy markets – such as the drawing down of strategic reserves, alternate routes to bypass the double-blockaded Strait of Hormuz, and leveraging of existing commercial stocks – have now “largely played out, and we don’t have nearly the buffers in the system that we did when it began.”
The United States’ Strategic Petroleum Reserve is now down to 285 million barrels as of the week ending September 4, its lowest level in 44 years. Due to the structural nature of the natural salt caverns that hold the nation’s reserve oil supply, energy experts believe it could hit its “operational limits” as soon as November.
Oil’s surge above the $100 per barrel threshold is now causing service disruptions and social unrest across the globe. In Asia, the region of the world most dependent on Gulf oil exports, rolling blackouts and forced idling of key industries are affecting the livelihoods of working people across the continent, sparking widespread anger. In Bangladesh, now struggling with its worst energy crisis in 20 years, prolonged power cuts are leaving large parts of the country without electricity for hours at a time; at least one hospital reported nurses having to use mobile phone flashlights and handheld fans to tend to patients. In the Philippines, commercial fishermen are idling their boats due to lack of fuel. In Indonesia, shortages of cooking gas have been reported as motorists formed long lines at gas pumps, hoping to fill up before the stations’ supplies ran out. Asian countries hungry for energy have begun relying more heavily on renewable energy exporters such as Laos, which has left its own people to deal with rolling blackouts as it supplies its neighbors with hydroelectric power.
Protests over fuel and energy prices have also rocked Guatemala, Portugal, France, Sri Lanka, and Syria as well as Libya, where protests over power cuts have shut down oil production and forced the country to declare force majeure on its crude oil export commitments. South Korean prime minister Lee Jae Myung met on Thursday, September 17 with International Energy Agency chief Fatih Birol to discuss ways the IEA could assist South Korea with accelerating its transition toward renewable energy.
Even China, which relied on its vast petroleum reserves and rapid EV transition to almost single-handedly stabilize oil markets during the first six months of the Iran war, now faces an acute energy challenge as it has had to resume buying large amounts of oil off the open market, now exacerbating rather than alleviating the global oil crunch. On top of all this, the U.S. House of Representatives passed a bill this week levying new secondary sanctions on importers of Russian oil and gas, throwing up more barriers to global access to energy.
In the United States, gasoline prices rose to $4.36 per gallon on average this week, with prices at the pump topping $6 in California. Diesel prices surged past $6 per gallon nationwide as the diesel crack spread – the margin between the price of crude oil and the refined product – hit an all-time high of $111 per barrel on Tuesday, September 15; meaning that diesel futures in the United States and Europe are now trading at around $220 per barrel. Heating fuel – made from nearly the same ingredients as diesel for transportation – hit a crack spread of $117 per barrel on Wednesday, September 16, marking the highest level recorded by the Bloomberg index since it started keeping records in 2009. At one gas station in Southern California’s San Diego area, diesel prices rose to a whopping $9.99 per gallon – the maximum amount that can be displayed on most electronic gas station signs that are constrained to only three digits. Several stations in North Texas and Orlando were reported to have run out of diesel entirely.
As the world’s largest exporter of diesel fuel, U.S. refineries have increased their output, “running all-out” in an attempt to fill the gap in demand left by refineries in Russia and the Gulf that have been damaged by the twin wars raging over Eurasia. As a result, refineries have been unable to power down and conduct routine maintenance as they normally would on an annual basis. This week, a power outage caused by floodwater damage shut down the Exxon-Mobil refinery in Joliet, Illinois, one of the major refineries supplying the agricultural breadbasket of the U.S. Midwest, pulling up to 11 million gallons per day of diesel production capacity off the market.
The soaring price of diesel – the lifeblood of commodity transportation in the United States and around the world – has raised production and shipping costs everywhere, which will soon lead to even higher inflation in retail prices for nearly all types of consumer goods, including (and especially) basic necessities such as food. The Producer Price Index (tracking wholesale prices based on production costs) was already up 0.4% month-over-month in August 2026, before the recent spike in oil prices, and is expected to rise even higher in the coming months. Energy experts are predicting a harsh winter for U.S. residents, with home heating oil prices expected to rise 30% over last year.
The coming price shock at the pumps will exacerbate an already unbearable affordability crisis for a significant proportion of working people, farmers, and small businesses in the United States just ahead of the midterm elections, potentially locking in a political disaster for Trump and the GOP. Speaking to reporters on September 9, Trump admitted that fuel prices will likely not come down until after the midterms. Brown University published a study this week estimating that the Iran war has cost U.S. consumers at least $100 billion on increased gasoline and diesel costs alone, averaging about $770 per household, since the war began.
Trump Administration officials spent this week attempting to placate voters as Trump made several proclamations on Truth Social, from saying (again) that Iran wanted to make a deal “quickly and desperately” (which Iran vociferously denied) and vowing the Iran war will end “immediately after the election,” to blaming Ukraine for the diesel price spike and saying Ukraine had agreed not to continue hitting Russian oil infrastructure. Zelenskyy quickly corrected the record, saying he had not agreed to any such thing, and as if to stress his point, bombed the Syzran oil refinery deep within Russian territory the very next day.
Senate Majority Leader John Thune said Monday he is “open to exploring” a diesel export ban, though Interior Secretary Doug Burgum, in an address to industry executives and insiders Thursday, insisted the price spike was “temporary” and said an export ban was not being considered as it was unlikely to lower prices for U.S. consumers. Trump also touted pending deals with Exxon-Mobil and Trump donor Harold Hamm to boost oil production capacity in Venezuela, which was taken over by the United States after its abduction of Venezuelan President Maduro in January; although experts say it will take years for any increased production to come online. Politico reports that behind closed doors, the mood inside the White House is largely “frustration” that they “can’t get this resolved.”
Iran racks up military and diplomatic victories against the United States as Pentagon report shows extent of destruction on U.S. bases in the Gulf. Trump’s humiliating losses from the Iran war compounded this week as the Pentagon’s Inspector General released a report detailing the true extent of the damage done to “hundreds” of structures on U.S. military bases that have been destroyed by Iranian missile and drone strikes. On Monday, September 14, the Department of War’s independent oversight agency revealed new information regarding the losses borne by the U.S. military at the hands of the IRGC, not just to military installations but also about $184 million worth of damage to embassies, consulates, and other diplomatic facilities throughout the Middle East.
Covering the period from February 27 to June 30, the report provides the fullest official accounting of the accumulated costs in American lives, taxpayer dollars, and physical damage to U.S. military capabilities suffered from the conflict so far. It also confirmed reports of a “strategic inventory shortfall” in munitions stockpiles that have been denied by Trump, Hegseth and other Administration officials, which according to the report would take years to replenish due to “industrial base bottlenecks for munitions resupply,” especially for advanced interceptor missile systems. Additionally, the report outlines the damage done to dozens of U.S. military aircraft, including 30 Reaper drones, 12 KC-135 aerial refueling planes, four F-15 fighters and an A-10 attack jet.
On September 10, Iranian strikes dealt damage to even more U.S. aircraft at a base in Jordan, including one A-10 Thunderbolt plane and at least eight F-15 fighters; the Wall Street Journal reported that at least 60-70 Patriot interceptors and at least a dozen THAADs were used to fend off the attack over a single night, which insiders say is the same amount of munitions the United States “has used in a full week at other times in the war.”
The Inspector General’s report also corroborates a stunning admission made last week by acting Secretary of the Navy Hung Cao in an interview with conservative media outlet The Epoch Times, in which he admitted that Iranian forces “blew the hell” out of the U.S. Navy’s Fifth Fleet headquarters in Manama, Bahrain. The Fifth Fleet previously served as the main support and resupply base for naval forces deployed in the Persian Gulf region, and its destruction cut off vital supply lines resulting in the difficult conditions observed aboard ships like the USS Abraham Lincoln, which was pulled from active service in the Gulf after a record 286 consecutive days at sea amid reports of breakdowns in basic facilities and multiple suicide attempts by desperate U.S. servicemembers. A Wall Street Journal investigation found that the cost of rebuilding the Fifth Fleet base could cost up to $400 million, which U.S. officials speaking to the Journal said may not ever be rebuilt.
On Tuesday, September 15, CBS News released leaked photos anonymously provided by active-duty servicemembers, including extensive damage done to bases, aircraft and other military assets in Saudi Arabia and Kuwait. One servicemember told CBS News: “This is major damage to our bases that hasn’t been communicated to the American public… we’re standing there with our eyes closed getting punched in the face.” Another servicemember said, “We’re not defending these bases. We’re just watching them get destroyed.”
The Intercept reported this week on comments made to the outlet by two anonymous U.S. military officials familiar with operations in the Middle East, who warned that the military is facing extreme strain under the pressures of the war, and could lead to a “breakdown” in military readiness that would imperil its ability to continue prosecuting Trump and Netanyahu’s war of choice.
Trump said on Sunday, September 13 that the United States could “stay and keep the oil” in Iran, much like he has done in Venezuela; a claim that the officials speaking to the Intercept dismissed as “almost impossible” and “nonsensical, obviously.” On Thursday, September 17, Trump told Axios that he is “approaching a turning point” in the war and is weighing a “big decision” regarding the war’s endgame and whether or not he wanted to “go in and annihilate” the Iranian forces. Trump’s comment comes days before he is set to meet with Gulf countries to discuss a plan for further action against Iran. According to a report from the New York Times this week, Gulf countries, weary of Iranian attacks and the failure of the U.S. security umbrella to deter them, are weighing ‘new’ options for a resolution of the conflict, including a return to diplomatic talks with Iran.
Analyst Trita Parsi reported last week that Israeli media has been ‘brainstorming’ ideas to goad the U.S. into a ground invasion of Iran, which he notes would require up to 1.5 million soldiers. According to Parsi, the Jerusalem Post floated the idea, reportedly under consideration by the Pentagon, to offer student loan and credit card debt forgiveness to American youth as an incentive to volunteer for what media outlets have described as a “chilling plan” for a major escalation in the war that Parsi warns could be implemented just before the midterm elections. Aside from the potential cost in American lives, Parsi notes that the financial costs to pursue a ground invasion would be “massive” at a time when military officials are already warning of “shortfalls” in the war budget that have forced them to dip into servicemember payrolls to cover.
Also this week, six Pentagon whistleblowers gave an exclusive interview with the Daily Mail, leaking to the public detailed accounts of “dysfunction and fear” pervading the Defense Department under Secretary Pete Hegseth. According to the whistleblowers, the Pentagon has been transformed under Hegseth into his “personal fiefdom,” describing a workplace “shaped by firings, stalled promotions and score-settling” amid a massive cover-up of the true cost of the Iran war that the Inspector General’s report has now made a matter of record. According to one of the insiders, the “whole building [the Pentagon] is non-concur,” referring to the term for formal objections submitted by military commanders to the Secretary of Defense.
On Tuesday, September 15, Republican House member Rep. Thomas Massie introduced articles of impeachment against Hegseth, forcing a vote to the House floor to remove him from his position as Secretary of Defense. The vote was thwarted by Speaker Mike Johnson, who abruptly called an early recess, preventing the House from returning to session until after the midterm elections. Also on Tuesday, the House passed its third War Powers Resolution demanding that Trump end military operations in Iran, this time with seven Republicans crossing party lines to vote for the measure. On Thursday, September 17, forty-six Senate Democrats, including Independent Senators Bernie Sanders and Angus King, sent a formal letter to the Pentagon demanding that Hegseth provide a detailed accounting of the Iran war’s costs, calling it the “bare minimum” required for Congress to provide proper oversight.
Meanwhile, Iran and Oman announced on Sunday, September 13 that they have reached agreement on a joint plan to manage the Strait of Hormuz. They had planned to discuss the plan with other Gulf States at a meeting in Muscat on Monday, September 14, which was postponed due to the escalation of the Houthi offensive against Saudi Arabia. The United States was not involved in any of the negotiations, nor was it invited to the planned meeting. On Monday, September 14, the Persian Gulf Strait Authority, the institution set up by Iran to manage passage through the Strait, issued an updated list of 77 sanctioned vessels accused of “violating Iranian protocols for the Strait of Hormuz.”
Iran has since launched attacks on a number of vessels attempting to cross the Strait without permission, including one U.S.-contracted vessel reportedly connected to the Department of Defense, wounding several U.S. military personnel along with civilian contractors. Last week in the Strait, Iran captured an intact U.S. naval drone manufactured by defense contractor Anduril, giving the IRGC an opportunity to reverse-engineer the advanced technology. Over the past several days, traffic in the Strait of Hormuz has dwindled to a “near-standstill” due to the repeated tit-for-tat strikes on commercial vessels originating from both U.S. and Iranian forces.
On Thursday, September 17, a UN fact-finding mission on Iran reported that it had found “reasonable grounds” to believe that the United States had committed at war crimes in Iran, specifically in reference to the bombing of an elementary school in Minab that killed 168 schoolchildren on February 28, the first day of the conflict, as well as an “indiscriminate” attack on a sports facility and residential area in the southern city of Lamerd, also on February 28. Although an initial assessment by the U.S. military in late March concluded that it was “most likely” that a U.S. missile struck the Shajareh Tayyebeh Primary School in Minab, the Trump Administration has neither admitted responsibility for the bombing, nor has it released the findings from the official Pentagon investigation into the attack. The UN report also found that the Iranian government had most likely committed a “crime against humanity” during its crackdown on widespread protests in early January. The Trump Administration dismissed the UN’s findings, issuing a scathing statement in response; White House spokesperson Anna Kelly retorted that the UN has “accomplished nothing for human rights while spouting unserious nonsense for decades.”
Also on Thursday, Iranian official Mohammed Baqer Zolqadr, a senior political adviser to Supreme Leader Mojtaba Khamenei, declared that the Strait of Hormuz would remain closed until both Trump and Netanyahu were removed from office, setting a new condition for reopening commercial traffic in the contested waterway. In August, Iran had said that the Strait could remain closed until the end of Trump’s term on January 20, 2029; the new declaration raises the stakes for the upcoming elections in both the United States and Israel. Zolqadr said in his statement that “Our fighters will not open the Strait of Hormuz until they bring the criminal Trump and the bloodthirsty Netanyahu down from the seat of power,” calling the action “the first stage of the Iranian people’s revenge.”
10-year Treasury bond yields top 5%; Fed forced to hike interest rate for the first time since 2023 as Trump threatens trade, countries pull out of U.S. economy. On Monday, September 14, the 10-year U.S. Treasury yield – the financial benchmark that sets the baseline rate for mortgages, auto loans, and most forms of personal and commercial credit – hit 5%, its highest level since October 2023. The 5% milestone is often considered a critical psychological threshold that signals significant strain on the U.S. economy and a marker of waning investor confidence in U.S. equities, and can often trigger a crash in stocks. On Tuesday, September 15, the 10-year yield climbed to 5.041%, its highest level since July 2007, just before the Global Financial Crisis triggered cascading meltdowns across multiple sectors and ushered in the Great Recession.
Financial analysts point to a ‘toxic stew’ of factors, including persistent inflation, the Iran war, the AI bubble, and the United States’ national debt load of over $40 trillion, that have cooled investor confidence in the U.S. economy and demand for U.S. debt, thus driving up yield rates. In August, Treasury Secretary Scott Bessent announced that he would be doubling the limit for U.S. Treasury buybacks to $4 billion in order to stabilize bond markets; last Wednesday, September 9, Bessent raised the limit again, tripling the normal ceiling for bond buybacks to $6 billion.
Bessent’s move comes as multiple countries have been pulling reserves of both U.S. Treasuries and gold holdings out of the United States economy as the instabilities created by Trump himself, as well as the runaway stock market bubble fueled by debt-heavy AI spending, has spooked central bankers wary of the growing fragility of the United States economy’s fiscal situation. Last week, the manager of Norway’s $2 trillion sovereign wealth fund, the largest in the world, announced that Norway would be cutting back about $80 billion worth of its Treasury holdings, reducing its position from 70% to 50%. The fund, whose investments include about 1.5% of all companies globally, is so massive that its portfolio decisions can influence world markets.
Also last week, the central banks of France and the Netherlands pulled their gold reserves out of the New York Federal Reserve and into other banks in London and Europe, repatriating gold that had been moved out of Europe during the rise of the Nazi regime in Germany before World War II and kept in U.S. banks. Germany and Italy, the two largest holders of gold reserves in the U.S., are mulling similar moves as well, in what Catherine Pell of the Bulwark calls a “frightening sign of just how much trust has been lost between the United States and its erstwhile allies.”
According to Newsweek, several countries, including China and Japan, the two largest holders of U.S. debt, have been reducing their exposure to U.S. bonds as they and other countries diversify their holdings to hedge against potential volatility in the precarious U.S. equity market.
On Wednesday, September 16, Trump-appointed Federal Reserve chair Kevin Warsh announced the Fed’s first rate hike since 2023, citing the need to combat persistent and rising inflation due to the Iran war oil shock. The move rattled markets and angered Trump, who had clashed repeatedly with former Fed chair Jerome Powell for defying Trump’s desire to lower interest rates in order to stimulate the economy. Warsh explained at a press conference after the announcement that “the plain fact is that inflation is too high and has been for too long… this summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”
Trump lashed out at Warsh and the Fed immediately following the announcement, demanding that Warsh lower the rate to 1%, insisting that the U.S. economy was “STRONG” and could handle the “LOWEST RATE in the world.” Central bank orthodoxy indicates that typically, lowering the interest rate during a period of high inflation could actually worsen inflation. Nonetheless, Trump posted an angry message on Truth Social demanding that Warsh “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT,” saying: “IT’S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change.” The New York Times reports that in July, the U.S. trade deficit in goods and services rose to its biggest gap in 16 months; the list of countries with whom the United States has a trade deficit is “lengthy,” including Canada and Mexico; nations in the European Union; and others including China, representing a substantial amount of the products that American families buy and U.S. businesses import.
While the Fed and other central banks believe that rate hikes will ‘tighten’ the money supply, helping to curb inflation, the recent spike in U.S. benchmark Treasury yields also spells bad news for U.S. consumers and borrowers, who are now caught in a ‘double whammy’ of oil-driven inflation and rising costs of borrowing.
MOVEMENT TRACKER
Battle of the Bands: Macklemore’s stand on Gaza genocide roils Ed Sheeran tour as stadium owners demand rapper’s removal, other artists and celebs back Palestine. Singer Ed Sheeran is facing widespread backlash this week for dropping rapper Macklemore from his tour, purportedly at the behest of billionaire stadium owner Robert Kraft, after the rapper gave a brief onstage speech that he concluded with “Free Palestine,” during the tour’s MetLife Stadium stop. Macklemore announced the split in an Instagram post on Monday, saying Kraft had given Sheeran an ultimatum to drop Macklemore from the tour or be prohibited from performing at all Kraft group-owned stadiums.
The announcement sparked immediate furor, and soon dozens of celebrities had made statements and comments supporting Macklemore, including bands Kneecap and Bob Vylan, who have themselves come under fire in recent years for publicly condemning the genocide in Gaza. All supporting acts associated with the tour, including Sheeran’s backing band Beoga, have now withdrawn in solidarity with Macklemore. Child advocate and educator Ms. Rachel stated in a post, “it’s not wrong to say Palestinian people should be able to be free and Palestinian kids should be able to grow up[.] It’s wrong to be silent during a genocide.” Social media offers an informal poll of the broader public on the matter: Ed Sheeran reportedly lost over 200,000 Instagram followers in the wake of the announcement, while Macklemore gained 1.6 million, with the other performers who withdrew from the tour also seeing boosts in their followings.
In a follow-up post, Macklemore pledged to donate the $1 million he had earned on Sheeran’s tour to six Palestinian aid organizations – Medical Aid for Palestinians, UNRWA USA, Anera, HEAL Palestine, Gaza Soup Kitchen, and the Palestinian Children’s Relief Fund – and invited Kraft to match the donation, saying, “Whatever we disagree about, perhaps we can agree on this: Palestinian lives are worth protecting. A Palestinian life is no less valuable than any other life on this earth. That is what this has always been about. Not me. Not a tour. Not the headlines or the controversy. It is about Palestinians’ right to freedom, dignity and safety in their own homeland.” Ms Rachel then announced that she would match the $1 million donation, and called on “every wealthy white celebrity” to do the same. Kraft has not expressed any plans to donate, but stated to media that Sheeran had made a $2 million donation and had also called for Kraft to match, although Sheeran has not publicly confirmed this at time of writing.
Border wall standoff in southern Arizona intensifies as protestors rally around ‘Grandmother’ cottonwood tree, halting construction. Three activists were arrested near Lochiel, Arizona this week in connection with an ongoing tree sit and protest that has stymied border wall construction in the state’s San Rafael valley since late July. A small group of protesters have camped continually in a threatened stand of ancient cottonwood trees they affectionately call “Grandmothers,” for more than six weeks, effectively stalling construction by repeatedly obstructing the road to the worksite with debris and standing in front of bulldozers. The protest has garnered national attention and international solidarity, as the tree-sit was briefly accompanied by a matching protest on the Mexico side of the border, and an online fundraiser supporting the protests had reached nearly $40,000 at time of writing.
The protesters, who were charged with disorderly conduct and released on their own recognizance with a prohibition against returning to the protest site, were arrested wearing costumes representing jaguars and yellow-billed cuckoos, two endangered animal species that inhabit the area. Conservation advocates say that the planned construction of two parallel 30 foot tall walls equipped with AI-powered surveillance cameras, motion detectors, and bright lights would represent “a death sentence for the entire ecosystem” in the valley.
Hackers reveal Flock camera secrets as anti-surveillance movement escalates. A group of hackers operating under the name “stegan0gram” have breached the encryption of a stolen Flock camera and leaked the contents to journalists, offering an unprecedented insight into the extent and nature of the data captured by the cameras. 404 Media and WIRED, in a joint investigation of the files, found that the cameras definitively recognize and catalog stills of human passers-by, alongside vehicles, bicycles, and license plates, generating thousands of images per day and transmitting them to Flock’s servers. The hackers responsible for the leak also expressed intent to publish details on how they managed to obtain the software, telling journalists, “Why just destroy them when we can reverse engineer them and find the secrets of those spying on us? We liberated hardware in the field, disarmed them, and proceeded with reverse engineering of the cameras and associated solar equipment.” Critics of ALPRs argue that the cameras’ collection of images of people poses a “terrifying” confirmation of fears that Flock networks can be used to track and identify individuals as well as vehicles.
Data Centers A bipartisan coalition of lawmakers in the U.S. House of Representatives on Wednesday released a joint letter urging congressional leaders to take immediate action to regulate the artificial intelligence industry, as the House on Wednesday also overwhelmingly passed legislation aimed at protecting Americans from bearing the costs of data centers on their electricity bills. However, an attempt by Sen. Jon Husted (R-Ohio) to fast track the bill’s Senate equivalent was stymied by an objection from the top Democrat on the Energy and Natural Resources Committee, Sen. Martin Heinrich (D-N.M.), who argued that the Ratepayer Protection Act didn’t go far enough in forcing data centers to foot the bill for their own energy costs; a counterproposal of his own bill, the GRID Savings act, was objected to by Sen. Bernie Moreno (R-Ohio). Hyperscale data centers continue to be wildly unpopular across party lines in every poll, as more revelations continue to come to light about the massive environmental impacts of data centers and AI use.
Nashville fights back against ICE detention center Residents of Nashville, Tennessee are pushing back against planned construction of an “ICE Command Center” in the Donelson neighborhood. Around 200 gathered at a rally led by the Tennessee Immigrant and Refugee Rights Coalition (TIRRC) earlier this month, in response to a job listing from ICE contractor Koniag Government Services that indicated the project was moving forward. This week’s Nashville Metro Council meeting was reportedly packed with residents who spoke out against the planned command center, imploring council members to intervene on residents’ behalf after the council had previously expressed intent to explore permitting and zoning measures that could prevent the center from opening. Speakers highlighted concerns over ICE’s potential impact on daily life in their neighborhoods, with some parents and educators expressing that Nashville’s children already fear the agency’s potential to separate them from their families. Activists say they are seeking legislative opportunities to block the construction, and have called for residents to contact their local elected officials and speak out against the project.
Dem-aligned organizations launch polling place protection program. A new nationwide Democratic initiative dubbed the “New Battlefield Project” is aiming to train tens of thousands of volunteers to monitor polling sites and counter possible voter intimidation in the upcoming midterm elections. The Association of State Democratic Committees (ASDC), an arm of the Democratic National Committee (DNC), hopes to train volunteers for 25% of the nation’s 95,000 election day polling places, focusing on districts with competitive races. These efforts come as a response to President Trump’s repeated attempts to interfere with the midterm elections, and volunteers will reportedly be trained to assist voters in finding their appropriate polling place, provide information about provisional ballots, and document any attempts to hinder others from voting that might take place.