Middle East calls for de-escalation and G7 summit wraps
Neighbours of Iran and Israel are denouncing the conflict. The G7 summit closes out. The UAE Coast Guard evacuates crew after a tanker collision in the Gulf of Oman. On today's episode of Trending Middle East: Regional governments on high alert to de-escalate Israel-Iran conflict Israel-Iran conflict dominates G7 summit in Canada as Donald Trump leaves early UAE Coast Guard rescues 24 crew members after oil tanker collision in Gulf of Oman This episode features Thomas Helm, Jerusalem Correspondent, and Willy Lowry, Senior Correspondent. Editor's note: We want to hear from you! Help us improve our podcasts by taking our 2-minute listener survey. Click here.
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Zawya
11 minutes ago
- Zawya
Trump pressure on Fed may be backfiring: Mike Dolan
(The opinions expressed here are those of the author, a columnist for Reuters.) LONDON - Even if the Federal Reserve thought a window had opened for it to resume its interest rate cutting campaign, there's a risk it may now hold back, precisely because of the relentless political pressure President Donald Trump has put on it to ease policy. And that's not just Fed Chair Jerome Powell being stubborn. One of its key concerns at this stage of its monetary policy cycle is that markets, businesses and households will not believe it has the staying power or political support to wring out the last vestiges of excess inflation and bring inflation expectations back durably to its 2% target. A rate cut as soon as this week - especially with futures markets not pricing in another one until September - would stoke suspicion that the move was forced by the White House. Repeated calls from Trump for the Fed to immediately lop as much as a full percentage point off its policy rate are now essentially weekly - if not daily - exhortations. Trump has claimed he won't fire the Fed chair, whose term ends early next year, and a recent Supreme Court ruling indicates that he would not be legally allowed to do so. Yet the political pressure on the Fed to ease policy continues to ratchet higher. Trump summoned Powell to a meeting at the White House late last month to tell him he needed to cut rates. That prompted a hasty Fed statement underlining the institution's political independence and it insisted that the Fed chair did not discuss interest rate plans with the president. Trump followed this by claiming his nomination for Powell's successor would be "coming out very soon", adding that former Fed Governor Kevin Warsh was "very highly thought of". And then last week he said that even though he would not fire Powell, he "may have to force something". What's clear is that this pressure is unlikely to abate and is apt to go up several decibels every time there's a soft inflation or labour market reading, both of which we saw last week. Other G7 central banks cutting rates will also likely turn up the dial. The Fed's best defence is that "core" annual inflation rates - both the consumer price index and the Fed-favoured personal consumption expenditures gauge - remain at 2.5% or higher. The ongoing trade war threatens to push up import prices, while "hot wars", such as the raging Israel-Iran conflict, raise the prospect of higher energy prices globally. The picture is foggy at best and the Fed will almost certainly hold rates steady again this week while assessing the situation. RATE EXPECTATIONS But perhaps more worrying for the U.S. central bank is elevated inflation expectations. U.S. consumer inflation expectations over five years remain somewhere between 2.6% and 4.1%, according to monthly New York Fed and University of Michigan surveys respectively. Markets are only marginally more optimistic, with the five-year "breakeven" rate from the inflation-protected Treasury market and the five-year inflation swap at 2.3% and 2.5%, respectively. Over a 10-year horizon, markets see the U.S. inflation outlook as the worst of the G7. In short, the Fed has not yet convinced households or financial markets that it will get inflation back to its target over the medium term. So even if a cogent argument could be made for lowering borrowing rates at this juncture, such as concerns about the trade war's impact on economic activity, the Fed may not respond for fear of stoking those very expectations by appearing to be giving into political pressure. And allowing above-target inflation concerns to get embedded over time risks entrenching higher risk premia into long-term bonds and weakening the dollar longer term by suggesting investors might not be adequately compensated for inflation erosion over time. Fed independence and credibility are much more important than the timing of any given policy move, and that's an argument that both Powell and Fed officials make repeatedly. "It is absolutely critical that decisions on monetary policy be free of external noises and influences," Philadelphia Fed President Patrick Harker said this month. The question then is just how much worse the jobs picture would have to get, or how much deeper inflation would have to fall, for the Fed to be confident that a rate cut would not raise suspicions of political pressure. Meanwhile, speculation about Trump's willingness and ability to remove Powell still rumbles, despite the recent Supreme Court ruling. University of California, Berkeley Professor Barry Eichengreen argues the footnote in the court ruling that supposedly protects the Fed came with no legal basis. "The note reads like a ChatGPT hallucination," he wrote in a piece for Project Syndicate last week, adding "arbitrarily exempting the Fed opens the door to arbitrarily not exempting the Fed." "Advocates of Fed independence should be worried", he concluded. To prove its independence, the Fed may have to sit on its hands longer than it would have otherwise. The opinions expressed here are those of the author, a columnist for Reuters. (By Mike Dolan; Editing by Jamie Freed)
Khaleej Times
43 minutes ago
- Khaleej Times
'What are these wars for?': Arab town in Israel shattered by Iran strike
An Arab town in northern Israel paid a heavy price for the ongoing air war between Iran and Israel when a ballistic missile slammed into a home there, killing four people and upending life in the small community. Hundreds of sobbing residents crowded the narrow streets of Tamra on Tuesday to watch as the wooden coffins adorned with colourful wreaths were carried to the town's cemetery. To some, the Iranian strike highlighted the unequal protections afforded Israel's Arab minority, while to others, it merely underscored the cruel indifference of war. Raja Khatib has been left to pick up the pieces from an attack that killed his wife, two of his daughters and a sister in law. "I wish to myself, if only the missile would have hit me as well. And I would be with them, and I wouldn't be suffering anymore," Khatib told AFP. "Learn from me: no more victims. Stop the war." After five days of fighting, at least 24 people have been killed in Israel and hundreds more wounded by the repeated barrages launched from Iran. Israel's sophisticated air defence systems have managed to intercept a majority of the missiles and drones targeting the country. But some have managed to slip through. With some projectiles roughly the size of a train carriage and carrying a payload that can weigh hundreds of kilograms, Iran's ballistic missiles can be devastating upon impact. A single strike can destroy large swaths of a city block and rip gaping holes in an apartment building, while the shockwave can shatter windows and wreak havoc on the surrounding area. The level of destruction from the missiles has been unprecedented in Israel, even after 20 months of continuous war in the wake of the October 7, 2023 Hamas attacks. Along with Tamra, barrages have also hit residential areas in Tel Aviv, Bnei Brak, Petah Tikva and Haifa. Discrimination As the coffins made their way through Tamra on Tuesday, a group of women tended to a relative of the victims who had become faint with grief, dabbing cold water on her cheeks and forehead. At the cemetery, men embraced and young girls cried at the foot of the freshly dug graves. Iran has continued to fire daily salvos since Israel launched a surprise air campaign that it says is aimed at preventing the Islamic republic from acquiring nuclear weapons -- an ambition Tehran denies. In Iran, Israel's wide-ranging air strikes have killed at least 224 people, including military commanders, nuclear scientists and civilians. Despite mounting calls to de-escalate, neither side has backed off from the fighting. In Israel, frequent air raid alerts have kept residents close to bomb shelters, while streets across the country have largely emptied and shops shuttered. But some in the country's Arab minority have said the government has done too little to protect them, pointing to unequal access to public shelters used to weather the barrages. Most of Israel's Arab minority identify as Palestinians who remained in what is now Israel after its creation in 1948. They represent about 20 percent of the country's population. The community frequently professes to face discrimination from Israel's Jewish majority. "The state, unfortunately, still distinguishes between blood and blood," Ayman Odeh, an Israeli parliamentarian of Palestinian descent, wrote on social media after touring Tamra earlier this week. "Tamra is not a village. It is a city without public shelters," Odeh added, saying that this was the case for 60 percent of "local authorities" -- the Israeli term for communities not officially registered as cities, many of which are majority Arab. But for residents like Khatib, the damage has already been done. "What are these wars for? Let's make peace, for the sake of the two people," he said. "I am a Muslim. This missile killed Muslims. Did it differentiate between Jews and Muslims? No, when it hits, it doesn't distinguish between people."
Arabian Post
2 hours ago
- Arabian Post
Crypto Lobbying Spurs Democratic Support for Stablecoin Bill
The U.S. Senate has enacted the GENIUS Act, the first-ever federal framework for regulating dollar‑pegged stablecoins, with a decisive 68–30 bipartisan vote on 17 June 2025. Eighteen Democrats joined Republicans in supporting the legislation, which now advances to the House and is expected to reshape Washington's digital asset rules. The bill mandates that stablecoin issuers back tokens with liquid assets such as U.S. Treasuries, require regular financial disclosures and adhere to anti‑money‑laundering measures. It grants banks the authority to issue stablecoins, while explicitly restricting executive branch officials and legislators from sharing in their profits—a direct response to concerns over conflicts of interest. A surge in crypto-sector investment in political campaigns appears to have shifted momentum. Industry spending topped $119 million in support of pro‑crypto congressional candidates during the 2024 cycle. Lobbyists then intensified efforts to engage Democratic lawmakers, viewed as essential for reaching the 60-vote threshold in the evenly divided Senate. ADVERTISEMENT Internal communications among Democratic operatives reveal strategic alignment with crypto backers. In a private group chat described in reporting by the Lever, coalition members acknowledged that, despite ethical concerns, opposing the industry would be 'political suicide.' One member reportedly observed that any amendment targeting Trump‑family conflicts would be 'DOA,' suggesting token amendments offered for optics rather than impact. Legislators including Senator Elizabeth Warren have voiced misgivings, arguing that the bill inadequately shields consumers or addresses risks associated with big‑tech or foreign‑issued stablecoins. She contends it grants too much leeway to the likes of former President Donald Trump's crypto ventures, such as the Trump memecoin and World Liberty Financial. The crypto lobby's efforts have extended beyond campaign funding to retention of influential political operatives. Coinbase, for instance, recently appointed veteran Democratic strategist David Plouffe to its advisory board, joining a roster of insiders from both parties. Observers note this reflects crypto's emerging status as a 'politically competitive' constituency. The political dynamic has shifted decisively. As AP reports, Democrats are balancing distrust of Trump-linked crypto enterprises with newfound recognition of the sector's electoral influence. Backing the GENIUS Act became for many a strategic necessity, notwithstanding deep ideological resistance to deregulation. The Senate vote occurred amid broader legislative discussions. The CLARITY Act—aimed at clarifying agency jurisdiction across the SEC and CFTC—is under consideration in the House Financial Services Committee. Some lawmakers propose merging the stablecoin and authority-defining bills, though others caution it could delay the GENIUS Act's passage. Crypto industry leaders view the GENIUS Act as a critical precursor to more comprehensive legislation. Ledger's Head of Global Policy, Seth Hertline, described the Senate's action as 'a political bellwether' for the sector's broader legislative agenda. The bill's passage also intersects with Trump's personal crypto interests. His family's stablecoin projects have sparked accusations of profiteering and lobbying for relaxed oversight. Critics warn that current legislative safeguards fall short of preventing conflicts of interest. The next phase lies in the House, where Republican leadership must reconcile the Senate's GENIUS Act with its own STABLE Act or integrate it into broader regulatory plans. Some Republicans advocate adding provisions to limit central bank digital currency initiatives, though such measures may complicate Senate approval. Major stablecoin issuers such as Tether and Circle —together controlling over $200 billion in supply—stand to gain regulatory clarity and legitimacy if the GENIUS Act becomes law. Recent moves by major corporates, including JPMorgan's planned stablecoin on Coinbase's Base chain and indications that Amazon and Walmart are exploring token issuance, signal growing private‑sector enthusiasm. As the House deliberates, questions remain whether the Senate's bipartisan vote marks the start of a fully fleshed-out U.S. crypto regulatory regime—or the culmination of a high-stakes battle between policy integrity and political pragmatism.
