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Iranian response to Memorandum of Understanding shows reality of 2 factions in Iran, the IRGC military faction, and the elected president Pezeshkian plus Turkey /Pakistan/Egypt and Qatar as the second faction. With IRGC military rejecting the Memorandum on opening Hormuz and discontinuing nuclear weapons programs. This was true at the time Vance conducted negotiations and the Memorandum appears to have been accepted by IRGC only under great pressure from Turkey, Pakistan, Egypt, and Qatar, and the faction under Iranian elected president Pezeshkian. Where IRGC thinking could have been to give  agreement to the Memorandum that they had no intention of keeping, as its policy on nuclear weapons remains unchanged, and its goal is to use Hormuz for leverage and extend its control of Hormuz channel. The cost of sanctions and not being able to export oil, the effect on its economy, on cost of living with rampant inflation, may be of little concern to the people who run the IRGC military who suppressed all dissent and protests in 2026. Protests across different parts of society to the deteriorating economy. How could the US respond? The US used the time of the ceasefire to create a new status quo by using open navigation of the seas as the principle behind opening and protecting the Omani side of the Hormuz for oil shipment. This is a principle accepted by all countries. There is a backup plan of the US, China, India, Japan and other countries and this is to prepare rapidly to do without Hormuz so that the economies of these nations are not affected. The US also supported efforts by Saudis and Kuwait, UAE, to increase oil exports through channels outside of Hormuz, UAE's decision to increase oil supplies and lower prices by leaving OPEC, and US creating alternative supplies for India through Venezuela. Most important is China's decision that it no longer needs the 5 million barrels of oil from Hormuz for its economy to operate using alternative supplies and increasing efficient use of its oil resources. The world is also building up oil supplies and inventories so that Iran cannot threaten a cutoff from Hormuz because all nations have made other arrangements. Attacks by Iran on oil shipping on the Omani side protected by the US breaking the principle of open navigation of the seas, can then be considered Iran disrupting an open seas navigation route which it no longer is allowed to do under international law. This is something the world public opinion would support. The NYT has been critical of the DJT action in Iran, the WSJ and other media had joined in criticism. The situation in July 2026 is that the criticism of the US by NYT and other media, and from Europe and other countries in Asia will now be muted, because the US has tried all the options and is now finding ways to be able to bypass Hormuz altogether, and a backup plan or strategy to minimize the impact on oil prices. So that oil price of $70 may be kept at level around 10-20% higher not much more as Iran's military IRGC continues to disrupt the Hormuz supplies.  ...

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NYT gives this perspective of Mikhail Zygar on the difficult economic situation in Russia in January 2026 before the Iran War. Putin considering bringing Igor Sechin, head of Rosneft, as negotiator for Russia with Ukraine, to replace Kirill Dimitriev. Dimitriev is seen in Russia as an insubstantial figure and with no real mandate, on the point of being dismissed by Putin. This would being new life to Ukraine negotiations to end the war. This report says if Russia was to end the war it would have to change the structure of power and that included bringing in a new administration to rebuild the economy, to replace prime minister Mikhail Mishustin. He says oil was sold to India in January for $22 per barrel about one third of the market price. The economy was getting severely affected by the war and the conditions it had created for inflation, oil revenues under sanctions, and by financial and human cost of the Ukraine war, a credit crunch and a wave of bankruptcies that were expected in January 2026. Some of this is confirmed by the perspective offered on the same day this article appeared in NYT by an NYT article from the Foreign Minister of Sweden, Maria Malmer Stenegard. Stengard says Swedish analysis shows central bank interest rates set at 21% in 2024 when interest rates were 10%, suggest inflation was much higher than the 5% official figures. The minister also points out that instead of growing by 13% as official figures reported Russian economy had declined by 8% over 2020 to 2024. British government estimate is that the losses from the Ukraine war are $450 billion. Official growth estimate for 2026 is 0.4%. even with higher oil prices. All this changed with the Iran war by February and the jump in oil prices and Putin has decided not to make the changes he thought necessary and wind up the war, considering that some of the objectives had been achieved and to avoid an economic downward spiral. It is now Putin's decision says this report.  In the past Putin has always given the economy and living standards the priority. Yet the elites in Russia says this report are concerned about the fragile nature of the economy as present oil prices may come down in a short period. ...

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Instead of a jinx much to the contrary the US economy outlook for 2030 in Feb 2026- a surge in investment spending in 2026-2030, new manufacturing investments and lower energy costs, moderating inflation, are likely to propel the US economy ahead to 2030.The effect of tariffs as a policy making tool has been muted because of exemptions, reversal of tariff rates once key objectives were secure for tariffs as a way to get action on foreign policy as with Indian purchases of Russian oil, deals with Japan, South Korea and China, India, UK and the EU. Some sources such as the Philadelphia Fed see price rises reaching 3% in some inflation guages more than the moderate 2.5% in the consumer price index for January 2026. These sources see the hiring slowing down just as layoffs begin to happen in the latter part of the year which is a possibility but less likely. At this point in Feb 2026 there is a tendency not to layoff and to hang onto employees, and hiring has been slow in 2025. January's report of 130,000 jobs added is the first sign of strengthening of the jobs market. Overall a cautious view would be to call it a soft landing after the inflation surge of the covid period. Another way of looking at is is more in line with the strategic direction of the US economy- freeing up the economy with investments in energy,  reducing the key costs of production, tax policy of Bessent's complete one shot depreciation of equipment increasing business investment, tariff policy making the world trading system fairer and now more attuned to US interests, all creating an investment and jobs surge in 2026-2027. There is an added benefit from US efforts to free up the world trading system from the stranglehold placed on it by China with its control over world manufacturing. A dominance and unwise concentration gained from the serious mistakes of the Bush-Clinton period of not putting in safeguards for US factories and jobs (that form the backbone for families in neighborhoods towns and regions across the US), and US business interests growing indifference to the very communities they were based in by outshoring to China destroying whole regions in America. Even where it is criticized or seen as negative there are huge benefits when the US acted. Tariff increase on India is a clear example- it built Indian resilient attitude in June-Feb 2026, and during this period it cut funding Russia's war in Ukraine by sourcing energy from other sources, the US policy led to India and EU+ Germany signing trade agreements to double their effort and double trade and scientific cooperation ( a goal secured for the US as it reduces concentration in China), was followed by US signing its own trade agreement with India within days, and increases world trade of US and EU and Germany in ways that will bring 2.5 billion people into a strong partnership that overshadows anything that happened in China in the Clinton-Bush-Obama years of failure. ...

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  US reaches agreement that would restore oil supplies and bring down oil prices. The supply chains may have to be reconstituted for replacing much of the 20% of the oil that flows through Hormuz if the US, Europe,China and India, Japan, rest of the world are to gain from this experience. The only way to understand the change of mind of the DJT US government and the Saudis/UAE/Qatar for bringing an end to the war without immediately fulfilling required nuclear conditions is from the Saudi point of view it has sought to avoid damage to its oil facilities from Iranian drone and missile attacks. From the US point of view it may see that the US + ramped up Venezuelan production by 2027-2028 with increased push for supplies in other parts of the world with better security than Hormuz, could make up for most of the loss in supply from Hormuz. For the remainder acceleration of the renewal energy in Europe and in China, India could reduce dependence on oil from Saudis/Iran.  US Energy Information Administration forecast is for oil prices currently $103 for Brent crude oil to stabilize at $89 at the end of 2026 and $79 in 2027. The year started in 2026 at $60 per barrel. The UAE oil agency ADNOC says it would take 4 months to get 80% of production back on stream and full flows by 1st quarter 2027. Rystad Energy estimates repair and restoration at oil facilities to cost $58 billion. The MAGA base which opposed wars by Bush and Obama in the region would then look at it this way. The billions that Obama poured into Iran for Iran to rebuild its nuclear program would not happen again, as the US would continue its sanctions till all nuclear materials are removed from Iran. Iran would stall in negotiations that are now put off with only a Memorandum to show for commitment of Iran- though an agreement would only be a piece of paper that Iran may not implement as the failed Obama agreement showed- but yet not have the billions of dollars to support its nuclear program. It would give the US, Israel, and the world 10-15 years in which to respond to another nuclear program by Iran. Iran will need $270 billion to repair the damage to industrial facilities, which shows the cost of the war for the Iranian people just to get a nuclear weapon is prohibitive, considering that the Iranian economy was already in trouble before the war. Inflation and the overall economy will be in difficult shape for many years. Public sentiment in Iran may change the future course of Iran away from the course currently pursued. The entire Middle East  region has not benefitted from its dependence on oil. For the rest of the world finding alternative sources of supply is the best way and EU, China, India should accelerate renewable technologies and goals for energy independence shortening the transition from fossil fuels. ...

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1.2-2 million barrels a day go from Iran's Kharg island through Straits of Hormuz for ship to ship transfers in South China Sea, then labeled Emirati oil and unloaded at refineries on Shandong coast. These refineries are called teapot refineries. In this way US sanctions are avoided. Shipments of oil were about 700,000 barrels a day before 2023. After 2023 this more than doubled. China gets this at a 10-15%  discount costing Iran about a third of revenues it would otherwise be able to sell this oil if it decided to work with the US in a new arrangement. This report in FR24 shows China as limiting it's relations with Iran to oil, careful to not let it affect more important trading relations with US European Union, and Germany. This is similar to the situation for Venezuela -which under a new arrangement the US has with Venezuela- now gets market prices for its oil increasing it's revenues substantially by about one third to benefit the Venezuelan people suffering from high inflation and economy wrecked by sanctions. ...

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Impact of Iran War on European economy- Germany's growth 1.3% and 1.7% growth in 2026 and 2027 down to 0.6% and 0.9%.  With inflation at 2.8% and 2.9% from 2.0% and 2.3%. This is the consensus of all forecasts including Ifo Institute and Kiel Institute, which also see prices coming down in the second half, the Iran war impact mostly first half only. Clearly Germany will be able to ride out the Iran crisis and oil at $120 in April 2026. A big part of this is that there is a trillion dollars in investment that Germany's Merz has initiated and this makes a huge difference. France is self sufficient in energy with its reliance on nuclear energy. Germany imports only 6% of its energy from the Hormuz straits which means supplies will be available just that prices will be higher. Germany also can accelerate its renewable energy shift which would pay dividends in the future. Germany also practices conservation of energy better than most countries, similar to Japan, getting the same GNP with lower and lower energy needs. If the US were to do what Germany and Japan have done in energy conservation there would be no need for Hormuz, US could supply Japan with energy. ...

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At this point in May (May 22, 2026) a glimmer of hope appears for settling both the crisis in Hormuz and the Ukraine war. Pakistan, Turkey and China following DJT visit to China may be pushing Iran to lower the scale of the conflict. China's first priority was to be accepted by the US at the Beijing meeting as an equal power with the US, and keen to show its willingness to bear responsibility for peaceful resolution in conflict zones as a sign of its maturity as a world power. Much of this is not shown in the media as it is mostly done behind the scenes in communications that the media knows nothing about. Note that even in the depths of the Cold War during the Hungarian revolution of 1956 and Soviet action in Budapest, the US and the Soviets when their economies were not intertwined as the US and China are today, were still talking to each other to limit the conflicts to low level conflict. Hong Kong takeover, China's actions near Taiwan, China's presence in Latin America, Chinese cooperation with Iran, and Russia on Ukraine, China's economic competition in rare earths, are relatively smaller levels of friction considering 1950's Soviet's and the US. At the same time China and the Us are aware of a new bloc emerging in Oslo in May, where India is merging its economy with the Nordic economies of Sweden, Denmark and Norway, and of the European Union and Germany, creating a new bloc of 2 billion people that can only grow rapidly with India's potential to exceed growth rates of 20% in the 600 million Eastern region for a decade. EU would make the shift to strategic partnership with India displacing the vital role the European Union has played in China's growth and economy. This would create new pressures for Russian president Putin to decide it is time to listen to a friend India and de-escalate lower the level of conflict with an initial peace deal that would lead to more talks on a final settlement. Because Russia would have a harder time tackling both India and Germany at the same time. NYT shows on the same day May 22 a report on Russia and a report by the Swedish Foreign Minister Maria Sonegard that say the elites in Russia and Putin were by January 2026 having very serious discussion to change the administration, bring Igor Sechin as negotiaor to end the Ukraine conflict before serious, possibly irreversible damage, to the Russian economy. Sweden's Sonegard says that between 2020 and 2024 Russian economy declined by 8%, not grew by 13% as official figures show, inflation is much higher than 5% as official figures show, and credit is tightening, bankruptcies expected, growth even with oil prices up down to 0.4% for 2026. During 20 years running Russia Putin's No. 1 priority, his life's mission was to restore, then exceed by a large margin the living standards of the Russian people. Having at such great cost accomplished the goal of gaining recognition as a Northern Power in Europe, having gained much of Russian speaking eastern Ukraine, Putin could wisely with self respect wind down Ukraine conflict for good. The US gains something similar to Northern Power status for Russia in its recommitment to the Monroe Doctrine, with Russia withdrawing from any involvement- and China tacitly doing the same-  in the western hemisphere. With that the US can tackle its own losses that match Russian losses in lives- loss of more American lives than in the Korean and Vietnam and WWI combined to drug smuggling from Mexico, Venezuela, Colombia, and restoring rule of law in Cuba, Venezuela, and through drug cartel free Mexico good governance in Mexico.  ...

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This NYT's look at PDVSA the Venezuelan oil industry 2026 and in the years 2013-2026 after Chavez is an eye opener on what happens when socialist ideas of distribution and equality fall apart. There are dangers on both sides the Right, the Left makes no difference mere labels, vigilance, good leadership, clean governance, good management hard work, are essential for countries and peoples to prosper.The operations of the Venezuelan oil industry in these years as shown in the NYT. show the failures of the Chavez ideas for the economy, hyper inflation and mismanagement of the country's oil resources that followed in 2013-2026. From Nigeria, to India in the years just before the 2014 elections, to West Bengal, India in 2026, many such lessons in Indian states post Independence 1947, Sri Lanka, clear lessons on how socialist regimes take a turn into financial disaster as dreams evaporate and economies are destroyed with lack of jobs and industry, mismanagement and corruption. Everything falls apart, billions of dollars of public funds are lost, economies are ruined, people's lives destroyed, a cautionary tale for future generations. In Latin America, Asia and Africa most prone to such disasters, where bad leaders can come to power through elections if the situations are allowed to be created where this can happen through the lack of effort to build better societies that work. ...

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As the media in the US and world cover this issue the focus is on the war and Hormuz. In the background a different situation is playing out. US Iran peace talks with Pakistan/ Qatar mediation June 13 2026- different factions in Iran RGC and Foreign Ministry+mediators with different positions  put out conflicting reports throughout May and June. The mediators Pakistan, Turkey and also Qatar/Saudis which also have a keen interest in limiting the damage to their economies, are taking one position working with the Foreign Ministry and elected Iranian president Pezeshkian who won 16 million votes 55% in the 2024 election. Inside Iran the RGC under new leaders is pursuing its own interests that does not put the economy first in conflict with Pezeshkian and public opinion in Iran for putting the economy first.  Pakistan faces grave risks with its large population, the risks to the economy from oil prices at $125 a barrel to its balance of payments crisis. Turkey also faces risks to its economy with high inflation. Saudis and Qatar see their economic prospects as limited and need to cut economic projects as oil revenues decline. In this situation the US goal of getting nuclear material out of the country is now put into a phased process based on conditions for every step of the way by the US negotiators, yet with memorandum of understanding to accomodate a changing situation. This policy may also be now agreed on between China and the US, and to some extent Russia. This can be seen as playing out and media does not talk about it. China openly greets DJT in Beijing and US and China agree to work things out in May 2026. China cuts its oil use by 3 million barrels a day as shown in a WSJ report this week. This is a major step. UAE leaves OPEC and calls for cuts in oil prices. Next Delsy Rodriguez of Venezuela visits New Delhi, India, and meets to set up economic relationships that include large purchases of Iranian oil to replace supplies lost in Hormuz and what India can offer in exchange for these purchases to Venezuela, including infrastructure building support. This points to a Win-Win for the US, China, India, as oil needs are met from places other than Hormuz for major users of energy. China may have realized that its prolific use of oil for 25 years of rapid development may have led to wasteful use of oil- some of that wasteful use can now be cut- 3 million barrels of oil use cut accepting some slower growth for quality growth. Germany and Japan are using less energy per unit of GDP and China will be looking at their model of energy use as an example to follow. This has huge potential for limiting climate change, as without China and India becoming more efficient in energy use, nothing the US could do was going to make a big difference for climate change. This may be one of the unintended benefits of the Hormuz situation in 2026 - ways to cut energy use for climate change action. And ways to move away from Hormuz and Persian Gulf for supplies so that poorer countries and advanced economies have to pay less for oil helping the poorer countries (Pakistan, Turkey) survive and grow, helping middle economic status rapidly modernizing economies  continue rapid growth (China and India), and helping advanced economies with cost of living hurting the majority of their people (US and EU).  With less money Russia, Iran and other countries will face serious constraints for more military expenditures as for the first time alternative supplies (other than Hormuz) and lower oil prices are being brought about in a newly unfolding plan of the US, China, India and other nations, that is not discussed in today's world media headlines. This means when seen objectively there is room for optimism based on the one thing going for the US, China, India, EU, a host of poorer nations in Asia /Africa/ LatinAmerica, the  5 largest development blocs and population blocs today, which is that the US and China can agree on being custodians for peaceful development accepting their responsibilities for guaranteeing this world order- as DJT and Xi Jinping stated in Beijing in May 2026- with the US aim of nuclear free Iran also accepted by China, Russia, India, and large sections of the Iranian population that put the economy first. ...

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The US Federal Reserve has already raised interest rates in 2021-2022 to 5-5.25%. The Fed under Jerome Powell has taken a pause on interest rate increases this month but expects to make two interest rate increases of quarter percentage point to take interest rates up to 5.6% by the end of 2023. Jerome Powell has shown determination at the US central bank to control inflation that went up quickly in 2021 with supply chain disruptions and oil flow disruptions. This has led to slower US inflation with inflation down to 4% in May 2023, half of what it was at its peak in 2022. The higher interest rates help savers including retired people deprived of interest income over the last decade, and hurt borrowers making higher payments on mortgage and car loans.

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Connection between inflation and spending (fiscal stuff) by the government is misunderstood or misstated, say Wharton Prof. Smetters. Doug Holtz-Eakin former CBO budget director agrees.  Does higher growth mean higher inflation? It depends. The climate change action renewable energy subsidies are expected to increase growth by 0.2%, yet this should reduce fossil fuel costs, mitigating effect on inflation of government spending. Will higher deficits increase inflation? Again it depends. In 2021 direct financial help for households during the pandemic led to a third of the higher inflation in 2021, 2022 and first half of 2023. Inflation peaked at 9.1%. In 2023 the deficit is up significantly but it is mostly of the accounting kind with lower tax revenues by $278 billion from capital gains taxes due to a stock market slump in 2022, and higher interest costs of $136 billion.

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The dollar remains the dominant force in capital markets. It is strengthening after US central bank raised interest rates 8 times in 2021-2022 to about 5.25%. China is cutting interest rates as its economy with debt at about 290% of GDP is slowing, the EU increasing rates as it faces inflation fueled by price increases and some price gouging. In the US inflation is cut in half by Fed policy to 4% in May 2023, Biden's policies to help with the cost of living and restrain price gouging, and by supply chains working better than in 2021. The US looks the strongest of the lot.

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US president DJT State of the Union Address to Congress Feb 24, 2026. BBC Analysis shows the president going on the offense to take up the issue of illegal migrants, cost of living, and business investment to get the economy to grow. DJT compared the $1 trillion in business investment under Biden over 4 years with the $18 trillion that he had secured in his first year. He said the tariffs were here to stay whatever the Supreme Court decision stated because all the agreements with EU, UK, China, India, South Korea, Taiwan, Japan, other countries will remain in place as all countries want it that way. The president stated that through tariffs he had secured benefits for getting manufacturing back to the US to create jobs and raise incomes. The Big Beautiful Bill also added to business investment through its writeoff in one time for equipment and plant. The oil price per gallon had gone down to $1.85 a gallon at the pump lowering the cost of living and inflation. He pointed out that the economy was strong with low inflation lower than 3%, unemployment at 4% and ecponomic growth in 2025 close to 3% with some quarters exceeding 4-5%. The US ice hockey team attended the event and the Congressional medal of honor was given to soldiers in the Venezuelan helicopter dangerous mission, and to a World War II pilot who was 100 years old. Transgender was shown as an issue with parents shown with their daughter who had suffered from transgender laws that he asked Congress to change. Calling some of this crazy as parents and families were suffering as a result. ...

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This WSJ editorial shows a 3.1% decline in purchasing power lost to inflation since president Biden took office, average hourly earnings declining from $11.39 to $11.03. Yet it is also true that inflation has been cut in half in May 2023 to 4% compared to a high of 9% in 2022. Inflation is much higher in the UK and Europe. President Biden also passed the Inflation Reduction Act, intervened in energy markets to lower oil prices with policies to reduce prices for Russian oil. Jerome Powell at the Federal Reserve is aggressively tackling inflation. Investments in manufacturing in the US and in infrastructure will increase jobs and strengthen the US economy in 2023-2025. This was given the name Bidenomics yet it is about president Biden and policymakers looking carefully at what works to increase jobs, increase wages, and support workers and families, and build American manufacturing and infrastructure for a strong economy.

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Inflation is receding as an issue in the 2024 elections as the CPI index dropped below 3% in July as reported by the Labor Department. It was 2.9% lowest since 2021. Greg Ip says when Trump is saying bacon costs 5 times more now he needs to find another supermarket. That is the joke as Trump is really getting ripped off. Ip says bacon prices are up 18% since 2020 when Biden took office. Trump says at rallies grocery prices are up 70%, Ip says fact correction -up 21% since January 2021 not 70%. Trump says gas prices are $5.00 a gallon. Fact correction- gas prices are $3.75 a gallon and falling, says Ip. Trump wildly exaggerates. Trump says he will cut energy and electricity prices by 50% in 12-18 months. His answer "Drill Baby Drill." Experts cited by Greg Ip say even if new offshore and onshore leases are given, increase in supply is marginal and years away. Gas prices are determined by the world price determined by OPEC and Russia, says Ip.  Trump will increase inflation says this report because of tariffs he plans of 60% on imports from China and 10% from other places. That would increase inflation by 1.4 to 1.7% say analysts. Greg Ip of WSJ offers more clues. Inflation linked bonds see inflation dropping to 2.2% in 2025 instead of 2.6% predicted earlier. Jerome Powell at the US central bank the Fed and president Biden hav done their job well and are not letting up, continue to work on it diligently every day. ...

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Things may not turn out the way polls show is the subject of this editorial in the WSJ. Prospects of some Republican candidates for the Senate in Arizona and Missouri are not what they appeared before. The division among Republicans about the legitimate votes in the 2022 presidential election as an issue in the midterms is leading to a fragmented election effort. The Inflation Reduction Act of 2021 shows Democrats responding to the issue of inflation and climate change, leading to new questions about Republicans in the rest of 2022.

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Russian shadow fleet and about 80% of Russian oil now sanctioned after US sanctions on Rosneft and Lukoil- Feb 2026. This is putting more oil onto a fleeet of vessels operating under Comoros, Sierra Leone and third nation flags, or even two flags, which the Americans and Europeans are tracking and diverting. Russia seeks to put this oil on an alternative tanker fleet it owns and which is insured by Russia, that goes from the Baltic and Black seas to the Mediterranean to refineries in Turkey, India and China. What thsi does is increases risks for Russia in shipping and for the Euroepans and Americans when ships fly Russian flags with military convoy. The overall effect of cutting Russian oil exports in addition to India committing to buy American oil and Venezuelan oil instead of Russian oil in its trade agreement with US, is that Russian economy may be in risky territory. Inflation is higher than official 6 percent at 16% interest rates, and this increases the risk. Budget needs within Russia may not be met as this continues. It is in Russia's interest now to conclude a peace agreement with Ukraine, now that the US has moved away from NATO/Europe to peaceful cooperation with Russia and competition with China. ...

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The US Federal Reserve's interest rate increases are having an effect in cooling inflation in the US. The inflation report for May shows US inflation at 4%, half the inflation at its peak in 2022. The policies of the Biden administration are leading to increased investment in infrastructure and manufacturing in the US. This combined with lower inflation, assistance to the needy for the increases in cost of living, are helping boost the US economy in 2023. This is also setting the foundation for the kind of growth and confidence that the US has not seen since its recovery from World War II in the nineteen fifties and sixties.

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Higher savings, covid assistance checks, and cheap credit led to higher consumer spending in the second half of 2020. This lasted through the higher inflation in 2022 when consumer spending outpaced inflation by two percentage points. The share of monthly income set aside for savings dropped from a high in April 2020, to 7.5% in December 2021, to 3.4% in December 2022. This is rapidly reversing with increase in mortgage rates and interest rates by the Fed to 4.75%, home and car sales the lowest in a decade. Inflation is at 5% year over year and wages up 4.6% in December year over year. The labor market is tight with about 10 million unfilled jobs and unemployment at 3.4%. Tech and other companies that overly expanded during the pandemic and are under antitrust oversight are laying off some employees. A recession is possible but this depends on how Jay Powell at the Fed reads the employment situation so that it brings down inflation but not so much that it hurts American workers. ...

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April 2025 WSJ forecast of recession in next 12 months is 45%. In 2022 and 2023 forecasts for recession in US were at 60% higher than the 2025 forecast of 45%, yet no recession happened.  It all depends on the USTR's Jamieson, and DJT's advisers Bessent, Luttnick, and Navarro, and Lighthizer, DJT using all their experience and carefully using Tariffs to achieve US goals. This means working out the details of the US economy, of inflation, GDP growth, cost of living, to maintain confidence of people in America, the confidence of the working people in America. Action on pharmaceuticals bringing production back home is a win as here it is a clear way to get companies to reduce prices. Permitting imports removing backward looking laws restricting pharmaceutical imports would create the competition that was missing. US automobile companies knowing the government has their back can actually cut prices in the first 12 months of 2025, with Toyota and Hyundai-Kia following suit. This would remove another source of inflation. On iphones and computers getting companies to create a new US+1 with India by 2027 would enable 60% of iphones and computers to be made in India and the US by 2027, The new strategy would be to combine the industrial base of India with the US to create plenty of good US jobs as the priority. Piece by piece the puzzle can be put together with attention to details and keeping overall goals in mind to restore US manufacturing and US industrial base, jobs, that will create its own tailwinds for decades of future growth.   ...

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With inflation up, cost of living increase, the $15 per hour wage in high cost of living states such as California and New York does not go very far in tackling cost of living in 2026. Astoundingly 20 states many in the SOuth still follow the $7.25 per hour federal minimum wage that has not changed since 2009. Axios shows the minimum wage by state. In Michigan workers in youth age earn 85% of the minimum wage of $12.80 and hour. As workers lost leverage with the decline of trade unions since the 1990's administrations of Clinton, Bush, Obama, the situation is a difficult one for lower wage workers in many states. The lower wages in retail and hospitality industries also creates downward pressure on all wages which have not kept up till recently in auto and other manufacturing industries. Outshoring increased pressures over the Clinton, Bush and Obama administrations and as Democrats failed to do much about outshoring, it took a Republican DJT and Democrat Biden who followed to reverse the trend and create a push for higher wages. This also has failed as inflation surged during 2022-2023 and outshoring created new problems in sourcing parts from overseas in autos and other industries. The middle class is also not much better off and engineers making $90,000 a year are also living from paycheck to paycheck, with less access to housing that has gone up in price and become less affordable. This cost of living surge and the open borders migration pressure on public services led to DJT's reelection in 2025. ...

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Some clues to why president Biden is not getting the credit for work done to better people's lives is the workplace. Workplace dissatisfaction measured in the Gallup 2023 Workplace Report shows the number of workers stressed, disengaged, or angry, is rising. A BambooHR analysis of data from 57000 workers shows job satisfaction scores have dropped to the lowest level since 2020, dropping 10% in 2023. Some of the causes- the unsettled state of the workday, being micromaanaged back to the office, even as they realize the isolating nature of remote work or hybrid work, inflation erasing any gains in wages, and a cooling job market leaving some stuck in same roles. New workers were hired in 2022-2023 and many have still to find fulfilling roles. Employers focused on hiring and less time was spent on situating new employees well. This is happening even as workers have more control where they work. Other causes are a backlash to employers efforts to get all employees back to the office. Another issue nearly a thrid of workers do not work in the same place as their bosses at large companies, up from 23% in 2020, accroding to an ADP survey. This means workers have long distance relationships with bosses and co-workers, weakening ties. In 2023 it is a very different workplace than before the pandemic. It may also offer some clues to why workers are skeptical about the work done by the Biden administration looking at their own lives after the pandemic even though major efforts are being made by president Biden in cost of living, in wages, support for labor and unions, and in rebuilding infrastructure and public services. ...

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In 2025 about $75,000 is considered income yearly for 2 adults and 2 children as the bottom rung of the middle class in America. About half the 70 million children in America, 35 million children are in conditions that involve need for food assistance and other aid, where the sense of income security, healthy food security, that was seen in the 1950's to 1990's the post war industrialization period is now missing in the closing days of the deindustrialization period of America in 2020-2025. WSJ's Dan Frosch provides this report from Binghamton, Broom county in upstate New York. At one time this area was part of the industrialization age in post war America. IBM offices were located here in Endicott. These office buildings of IBM are now being demolished. Instead of industry the economy depends on the University of Binghamton and the university attracts out of state students who bring in new investments in housing. Lower income yet middle class families face higher divorce rates with more single mothers struggling on incomes where they are on the border line for food assistance, and as wages creep up lose food and other aid. At income levels of $39,000 these families struggle to feed children. The poverty rate which declined during covid assistance period was already up in 2023 as government aid phased out under Biden and is now up further. A quarter of children in a once proud industrial region of America in upstate New York near Syracuse, now face poverty conditions. Life is a constant struggle to pay the rent, falling behind on utility or other bills and not having enough for food and other basic needs even at $39,000 year because of the inflation and cost of living having jumped in the last 5 years.   ...

LyrArc Article Gist
Eurozone GDP growth is 0.4% in 2nd quarter 2025 after 2.3% growth in 1st quarter. The eurozone economy is expected to do better in the second half after the uncertainty in trade is removed with the new US-EU Trade Agreement. Unemployment is at 6.3% in May 2025 historic low in eurozone, and inflation is at 2% in June 2025. Lower inflation has increased the buying power of consumers. Future growth could come from consumer spending and from the huge investments the German government plans to make in infrastructure and transport, digital, other fields to revitalize it's economy.

LyrArc Article Gist
US president's sweeping powers to use tariffs as a tool for policy when American people's jobs, communities, health, is threatened by fentanyl and concentration of manufacturing jobs in China, unfair trade by EU and Japan, is the issue presented to the US Supreme Court. The US president presented it in this way- tariffs as a foreign policy tool, not a way to impose economic policy in the form of a tax on American importers or buyers which is the power allocated to Congress by the US Constitution. Justices who mentioned these powers called them sweeping powers but would not say the word fentanyl or look back at the recalcitrant behaviour of Asian nations Japan and China when it comes to unfari trading practices, where the US could literally negotiate forever and get no result, or to the enormous concentration of manufacturing power and supply channels in China that not only ships out American jobs but leaves Americans at the mercy of foreign powers for cost of living. Nowhere was this more evident as during covid years and now in rare earths export restrictions from China. The Justices assumed it was just alright to ignore this or leave it unsaid.  The cost to American buyers is small because most of the tariffs are borne by foreign suppliers in China, Japan and Germany, who as in the case of automobiles unfairly benefitted for decades and are now bearing most of the cost of tariffs. The large business in the US have increased their margins so much in the 2020-2024 period that they are now bearing some of the cost of the tariffs, as reported in WSJ. So that inflation in the US is at 3.0 % in the US less than anticipated, when average tariffs are at about 10% overall, not what the headlines say of 15-20% because of the product exceptions made in the tariffs for each nation. Justice Roberts may be right when he says more care should be exercized in the placing of a tariff, but even Roberts and Justices Barrett, Gorsuch, Kavanaugh and others know that the US has used this as a last resort, as a policy tool to protect the American people. Sweeping powers need care and caution as Justice Roberts stated- “power to impose tariffs on any product from any country in any amount for any length of time. It does seem like that’s a major authority."   ...