Withdrawal
Week of September 25-October 1, 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
‘Doomsday War’: U.S. troops complete withdrawal from Iraq as Trump rejects Iran proposal and doubles down on annihilation threats; Europe, Texas declare fuel emergencies as IRGC appeals to U.S. midterm voters. On Wednesday, September 30, the U.S. military completed their full withdrawal of troops from Iraq, its second withdrawal in the 23 years since George W. Bush invaded Iraq in 2003. Pentagon spokesman Sean Parnell said the final departure of troops and military equipment from Erbil, Iraq marked a “transition from a wartime coalition mission to an Iraqi-led security effort supported by a more normal bilateral security relationship,” and touted “the success of a 12-year campaign that defeated ISIS as an organized military threat in Iraq and across the region.”
The ending of U.S. military presence in Iraq was received with mixed feelings from various Iraqi groups and security analysts; some Western-connected analysts fear that various militia groups, some part of the Iran-backed “Axis of Resistance,” will compete to dominate the ‘vacuum’ that they perceive will be left after U.S. withdrawal. The New York Times reports that the withdrawal comes as a relief for “widespread American fatigue with so-called ‘forever wars’” in the region, and for many Iraqis, some of whom lost family members to both ISIS and U.S. forces during the two-decade-long conflict, which one mother described as “worse than Saddam.”
Iraq declared October 1 an “Independence Day” national holiday, as President Ali Al-Zaidi said in an official statement that "October 1 will be a new day in the course of the Iraqi state, with the country free of any foreign military presence and the completion of national sovereignty over its territory.” Trump hailed the withdrawal as the conclusion of a “very expensive excursion into Hell,” saying at a White House event on Wednesday that “it’s been a long time with very bad decision making that got us involved in this quagmire in the first place.”
Meanwhile, Trump’s war of choice on Iran appears to be settling into its own quagmire as Trump this week rejected Iran’s latest proposal for ending the war, which was relayed from Foreign Minister Araghchi to the United States via Qatari intermediaries while at the UN General Assembly meeting in New York. The proposal, which Araghchi discussed with reporters in New York last Friday, outlined a plan to reopen the Strait of Hormuz and resume talks over Iran’s nuclear program within seven days if “certain commitments were met” by the United States, which closely matched the commitments outlined in the Memorandum of Understanding signed by both parties in June. “We have never closed the door to diplomacy or negotiations,” Araghchi noted, “but at the same time, we have never backed down from our rights.”
While Trump publicly rejected the proposal nearly immediately, again posting on Truth Social to rename the Strait of Hormuz the “Trump Strait” on Friday and telling reporters on Sunday that “I reject it” and he may just have to “blow up” the country, sources familiar with back-channel negotiations say that the United States and Iran are largely in agreement on the major points of the proposal, but that the U.S. response, formally delivered to President Pezeshkian on Wednesday, sought to discuss further “how they are going to implement the sequence of the aspects of the agreement.” Analyst Luciano Zaccara at Georgetown University in Qatar opined that “both sides are trying to get out of this war, while saving face at the same time.”
As Tehran weighed the U.S. response to its proposal to end the war, Pezeshkian appeared on Iranian state media Thursday to explain that Iran remains open to dialogue despite the current impasse that is threatening to send the global economy into a severe depression. “We have never shied away from talks, and we never will, although the United States has targeted our country three times despite having signed an agreement,” Pezeshkian told Tasnim news agency. Opposition media reports that a schism has developed among officials at top levels of the government between the negotiators and “hardliners” in Tehran over the proposal, although it has not been confirmed by sources within Iran.
Trump over the weekend again hinted that he would resume bombing after the midterms; while Araghchi said in an interview with Face the Nation Sunday: “We don’t care about U.S. midterms, we don’t care about any other things, we care about our national interests. We are ready to negotiate, as much as we are ready to face any challenge… we stand firm in the face of any aggression against us, even if it comes to a doomsday war.”
On Friday, September 25, the Hormuz Letter reports that the U.S. Navy was forced to draw back its blockade fleet several hundred kilometers from their position farther outside of the immediate Persian Gulf region, after an Iranian attack debuted its Qasem Basir “carrier-killer” missile, a new weapon with a 1,200 km range and advanced thermo-imaging capability to seek naval targets. Iranian National Security Council chief Mohsen Rezaei claimed the new missile “created hell for the Americans,” while CENTCOM acknowledged that ships had come under attack but said no damage was reported.
Open-source satellite imagery shows no U.S. warships within the previous blockade zone, indicating that the line has been moved outside the new missile’s range, which covers the entire Gulf of Oman and the Arabian Sea. The IRGC also claimed this week to have laid a new generation of undersea mines in the Strait of Hormuz, and captured another advanced U.S. sea drone for study.
Oil prices remain above $100 per barrel as the situation in the Strait of Hormuz has continued to escalate. Reports are contradictory as to how much traffic is crossing the Strait. Trump, CENTCOM and Kpler, a maritime tracking firm, have said that oil exports from the Persian Gulf are nearly up to pre-war levels via the Strait as well as alternate pipeline routes, although the IMF’s PortWatch tracked only one vessel successfully crossing the Strait on September 27. This week, Iran claimed to have targeted 19 ships in 48 hours that were crossing the Strait via ‘unauthorized’ routes, and between Tuesday and Wednesday three Liberia-flagged tankers were hit by unknown projectiles.’
Energy analysts note that while crude oil exports may have increased via alternative routes, refinery production has remained a critical bottleneck due to attacks by Ansarallah (Houthis) on Saudi production facilities and U.S. refineries running at capacity. Diesel prices continue to rise to record highs as Texas governor Greg Abbott declared a statewide fuel emergency, allowing him to relax emissions rules and release diesel for transportation that is normally reserved for agriculture, setting up a tradeoff between freight and food.
On Tuesday, the U.S. Department of Energy announced it would draw down another 40 million barrels from its dwindling Strategic Petroleum Reserve (SPR), which as of September 19 is reported to hold 284.5 million barrels, its lowest level since 1982. The generally accepted minimum safe operating level for the SPR is 250 million barrels.
In Europe, EU member nations held emergency talks Wednesday to formulate a response to pressure from Washington to release diesel from emergency reserve stockpiles held in France and Germany, with Trump threatening to implement a diesel export ban if Europe did not release 120 million barrels of diesel over the next six months (about 660,000 barrels per day). Reuters reports that in some European countries, diesel is reportedly selling for the U.S. equivalent of $12.99 per gallon.
Meanwhile, two attempted terror attacks appearing to target the U.S. and Israel – one where five men in ‘suspicious vehicles’ were arrested on Sunday at a UK airbase used by the U.S. military in the Iran war, and an attempted hijacking on Wednesday, when the Omani co-pilot of a FlyDubai plane headed for Tel Aviv seemingly stabbed the plane’s captain and attempted to ‘crash’ the plane before being taken down by passengers and crew – are increasingly being linked to Iran, although no concrete evidence has been presented to link the two incidents.
On Thursday, Trump insinuated that those behind the FlyDubai incident were linked to Iran, although he said “we’re working on it right now” to find evidence of a connection; he also said “they” [Iran] “will be hit very, very hard” if investigators established that Tehran was behind the incident. Also on Thursday, the Pentagon announced that approximately 9,000 additional sailors and Marines aboard the USS Theodore Roosevelt carrier strike group and the Makin Island amphibious readiness group will be heading to the Middle East, bringing the total number of deployed troops in the war zone to more than 20,000 and raising the probability of renewed attacks on Iranian territory.
Retired Lt. Col. Lawrence Wilkerson, former chief of staff to Secretary of State Colin Powell during the run-up to the Iraq War in 2003, warned this week that the confluence of the oil shock, escalation in Iran and Ukraine, and the upcoming political challenges to Netanyahu and Trump, on October 27 and November 3 respectively, threatened to widen the scope of the two major regional conflicts that are becoming increasingly interconnected. Given no effective conventional military options and with political pressures weighing, especially on Netanyahu, with elections in the U.S. and Israel only four weeks away, Wilkerson also warned that desperation could drive Israel to ‘nuclearize’ the Middle East conflict, potentially precipitating a global conflagration.
Also on Tuesday, the IRGC released a 25-page open letter to U.S. voters, urging them to “wake up” and “stop their government” by voting against the Trump agenda in the upcoming midterm elections. Saying that “it is the American taxpayers who will have to bear the cost of America’s unjust wars, and so they deserve to know the truth,” the letter grounds the United States’ strategic defeat against Iran in a detailed 70-year history of U.S. imperialism, which they said was inflicting a “common pain” on both the Iranian and American people.
“You are the ones who empower, with your votes, the government and allow it to do what it does,” the letter said, as it implored U.S. voters to “take back control” of their nation: “Although American politicians often win your votes through deception and false promises, as Trump did, you can change the makeup of the government if you apply the criteria for good leadership in choosing the people you vote into office.”
U.S. Treasury market closes on worst quarter since 1994 as global bond sell-off deepens; Anthropic IPO leak rattles markets; fuel crisis accelerates prospect of sovereign debt defaults, economic depression. Global bond markets kept getting pummeled this week as 10-year and 30-year Treasury bond yields hit 5.34% and 5.6% respectively on Thursday, marking their highest level since the end of the dot-com crash, rounding out the worst quarter for U.S. Treasuries since 1994. The bond volatility index, or MOVE, jumped 29% in the last week of September, crossing the key psychological threshold of 100 and prompting investors to seek safe havens in foreign markets.
UK 30-year gilts hit 6% for the first time since 1998, while France’s 10-year bond hit 4.96%, its highest level since 2002. Also worrying the Eurozone is the yield ‘spread’ between French and German government bonds, which jumped to its highest level in more than a decade and is an indicator of recession. Analysts also warned that the yen carry trade shows signs of unwinding as both 2-year and 30-year bond yields hit new multi-decade highs. Dollar-denominated debt in emerging markets also turned negative for the first time as investors ditched the dollar in favor of sovereign debt in local currencies that are weakening against the surging dollar.
The Financial Times reported this week that oil prices and U.S. Treasury yields are in their tightest correlative relationship since the beginning of the first Gulf war in 1990, indicating the dependence of the global economic outlook on the situation in the Strait of Hormuz. Ian Lyngen of BMO Capital Markets notes that “while there have been episodes when monetary policy and/or economic data overshadowed the fluctuations in oil prices, it is clear that the potential fallout on the global economy from the war with Iran remains a key driver of the macro narrative.”
CNBC reports that hedge funds have been investing more in bonds as traditional investors scurry away from the elevated risk. The Bank of International Settlements warned this week that the growing share of these new buyers in the market, while boosting dollar liquidity in the short term, also amplifies systemic risk due to their highly leveraged positions in the event of a crash. “When forced deleveraging happens due to extreme situations or crisis scenarios,” says hedge fund specialist Ricky Siao, “it may result in a broader liquidity and financial stability event.”
On Thursday, China halted exports of oil products beyond Hong Kong and Macau to preserve domestic oil stocks, sending global oil prices spiking up 4% and adding pressure to the already hyper-stressed diesel market, leaving global buyers to compete for an even smaller pool of refined products. Gasoline and diesel inventories in China dropped to 7-year lows at the end of September as internal demand strengthened and refiners were compelled to prioritize the domestic market as the Chinese state moved to suppress price increases for domestic gas and diesel. China also pulled back on imports as the stalemate in the Strait of Hormuz showed no signs of letting up.
As markets began to price in the reality of “higher for longer” interest rates driven by the global spike in bond yields, the inevitable dragging down of stocks began to become more apparent this week. Equities took a tumble across the globe on Thursday as rising oil prices and bond yields together sent investors running away from risk.
Stock indices around the world fell by 1.5-2% as U.S. equity markets closed down overall despite gains in several technology-related stocks and softer-than-expected inflation data. Out of the 11 economic sectors in the S&P 500, only technology, communication and healthcare posted positive gains in September, while utilities led sectors in the red with a decline of more than 6%. Stocks in heavily fuel-dependent industries, including aviation and mining, fell more than double the average declines on Wall Street.
Also putting pressure on bond markets is the record-level corporate debt issuance driven by tech giants and the AI industry, where bond issuance hit a record of $540 billion year-to-date, with 90% coming from U.S. companies. Semiconductor company Micron posted strong gains along with Meta and Alphabet, but their corporate debt situation is worrying analysts. A prospectus for Anthropic’s pending IPO in November was leaked to media this week, showing that the company is planning for a $2 trillion valuation despite the report showing $42 billion in losses from committed contracts despite only $4.6 billion in revenue, strengthening fears that the AI bubble, which has buoyed nearly all U.S. economic growth in the last quarter, is grossly overvalued with no chance of realizing profitable returns, further risking the destabilization of the entire economy.
Economist Michael Hudson notes that today’s confluence of oil shock, global war and mounting debt crises constitute the consummate conditions for a global depression. In a new paper published this week by The Democracy Collaborative, Hudson notes that absolute shortages of oil supply threaten global stocks of fertilizer and fuel – and as oil price spikes underpin rising costs for everything, businesses, farmers and consumers will find it harder and harder to service debt.
This also goes for sovereign debt especially in the Global South, where decades of neoliberalism have constrained domestic development and undermined sovereignty; with the sole exception of the United States, which has used its hegemonic military and economic power to extract tribute and fuel its own push towards financialization with the “free lunch” of the world’s reserve currency.
Today’s economic conditions are already accelerating the debt spiral, leading to “defaults, distress sales, and rising bankruptcy rates,” and further intensifying the conflict between creditor and debtor nations. He notes how the missteps in policy to handle the mounting international debt crises of the interwar period led to the Great Depression, the rise of fascism, and ultimately global war; and details the missed opportunities presented by Keynes at Bretton Woods to cancel debts and create a mutually beneficial global economic order that were ultimately shelved in favor of U.S. hegemony.
In order to avoid such cascading crises in today’s volatile economic climate, and “to save themselves from politically unacceptable domestic austerity and depression,” Hudson writes, “oil-deficit countries ultimately require mutual support from China, Russia and each other to create new rules to govern debtor and creditor relationships based on recognition that debts that can’t be paid won’t be paid” – beginning with the “backlog of dollar-denominated debts.”
MOVEMENT TRACKER
Midterms Outlook: Voter concerns, polls, and the groups fighting for election integrity. Voter confidence in the upcoming midterms remains a fraught question. A new survey from UC San Diego’s Center for Transparent and Trusted Elections finds that of over 5,000 respondents, just 49% said that they expect the 2026 midterm elections to be free and fair; only 55% say they believe the 2024 Presidential Election’s votes were counted accurately.
Disinformation is a pressing concern, as some Black voter organizations are countering AI-enhanced algorithm manipulation with “propaganda playbooks” designed to help voters spot common techniques. The NAACP has produced a primer on race-based disinformation campaigns; another published this week by nonprofit organization Onyx Impact is billed as a ‘field guide’ to help voters and social media consumers to recognize disinformation amongst “the most dangerous moment many communities have faced in the information environment in a generation.” Politico reports on the “pink slime” phenomenon, where partisan websites masquerading as media outlets are geared toward shaping AI chatbot responses to voter questions.
According to a new Reuters/Ipsos poll, a plurality (47%) of voters from all parties have identified cost-of-living issues as the single most important issue influencing their midterm vote, with Democrats holding an 8-point lead on the issue compared to Republicans. Consumer confidence appears to be at its lowest since 2014 as fuel prices continue to climb; healthcare costs remain a major concern with rising cost of living, as soaring cancer rates become a key issue in Midwest states simultaneously facing a “farm crisis” significantly exacerbated by the Iran war.
Electorally-focused climate groups such as Sunrise Movement are adjusting their messaging towards data center opposition, as Democrats have pegged issues causing widespread bipartisan backlash as key wedge points for the upcoming elections. A new report from the Highland Project surveying Black women voters found rates of motivation to vote not found since the Obama campaign, with the main issue driving voters this time being the need to “protect their community.”
AIPAC associations appear to be a growing liability for both parties as popular sentiment around U.S. military support for Israel continues to plummet. Less prominent in the voter discourse is the massive incursion of dark money into this year’s elections, which appear to be largely driven by tech companies and individual billionaires; the New York Times reports this week on twenty large dark-money donors, all but two of whom are supporting Republicans.
Midterm snap polling finds that currently, Democrats have a solid chance of flipping the House this year, while at least three crucial seats in the Senate are a toss-up. Grassroots GOTV groups conducting ‘deep canvassing’ operations are finding that the Democrats’ main challenge is to deliver for voters on the issues they care about, beyond being simply “anti-Trump.”
Amnesty International calls for ICE to be abolished. Human rights NGO Amnesty International released a new comprehensive report late last week documenting human rights violations carried out by ICE since January 20, 2025, and directly calling for the abolition of the agency.
The report, titled ““We Had Whistles, They Had Guns”: Human Rights Violations in U.S. Immigration Enforcement Operations and the Case to Abolish ICE,” documents a wide array of rights violations in no uncertain terms, stating that “The administration is implementing a mass detention and deportation system, fuelled by racist, xenophobic and false narratives and white supremacist theories, whose objective is to detain and deport as many racialized migrants, asylum seekers and refugees from the United States as possible” (emphasis in original).
The violations themselves range from harassment, racialized discrimination, and unlawful arrest to “cruel, inhumane and degrading detention conditions that may violate the prohibition on torture,” “unlawful use of force, including lethal force, which in some cases may amount to extrajudicial executions,” and “possible acts of enforced disappearance.”
Amnesty International followed their report with a call to action this week, with a campaign demanding the closure of a child and family detention facility at England Airpark in Alexandria, Louisiana. The location in question is reportedly one of the most chemically polluted sites in the country, with contaminants present in quantities thousands of times greater than federal safety limits, including PFA levels in the groundwater that are 575,000 times the federal limit.
Susan Sarandon, Hannah Einbinder among scores arrested protesting Netanyahu UN speech. More than 100 protesters were detained last week in New York in connection with a sit-in protest held by Jewish Voice for Peace during Benjamin Netanyahu’s address to the UN. Among the arrested were New York congressional candidate Darializa Avila Chevalier, New York city council member Chi Ossé, actors Susan Sarandon and Hannah Einbinder, comedian Caleb Hearon, and former army intelligence analyst Chelsea Manning.
A number of other celebrities and politicians including congressional candidate Brad Lander were also present at the protest. The arrests took place after a large group of protesters, many holding signs reading “End the Genocide” and “Stop Arming Israel,” blocked an intersection in protest as Israeli PM Netanyahu prepared to speak before the UN General Assembly. Inside the General Assembly, delegates from nearly 70 countries also walked out of Netanyahu’s hour-long speech that took aim at international media, Turkiye’s Recep Tayyip Erdoğan, New York City Mayor Zohran Mamdani, and left-wing Twitch streamer Hasan Piker.
Indivisible’s “No Kings: Vote Early” campaign underway. Indivisible and the No Kings coalition have announced that October will see the movement focusing on voter turnout, with “No Kings: Vote Early” events planned nationwide for October 17th. Organizers have told the media to expect highly community-oriented events “that are about either going out together right from the event to vote early or making a plan to do so.” The No Kings website boasts planned events in every U.S. state and Puerto Rico alongside a number of international solidarity events. Indivisible will be joined by several partner organizations in hosting these voter turnout pushes, including the American Federation of Teachers, Black Voters Matter Fund, 50501, MoveOn, Public Citizen, State Voices and Voto Latino.