U.S. Plans Naval Blockade of Iranian Ports, Core Inflation Pressure Tests Fed Policy

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Summary:

The U.S. military will impose a naval blockade on Iran; Waller: A rate hike may be needed soon to curb core inflation......

Highlights

1. Trump classifies the U.S.-Iran conflict as a military confrontation and refuses to set a timeline for its conclusion

2. Trump says the U.S. will destroy Iran’s Pickaxe Mountain nuclear facility

3. Burnham secures the U.K. Labour Party leadership and is expected to become prime minister on July 20

4. Trump backs a bipartisan Russia sanctions bill targeting countries buying Russian energy

5. U.S. military to impose a naval blockade on Iran from 20:00 GMT on July 14

6. Waller: A rate hike may be needed soon to curb core inflation

Details

Trump classifies the U.S.-Iran conflict as a military confrontation and refuses to set a timeline for its conclusion

U.S. President Donald Trump made new remarks on Monday regarding the renewed military operations against Iran, describing the escalating confrontation between the two countries as a military conflict while denying that this means the conflict will become prolonged. However, he refused to provide a clear timeline for how long the fighting would continue.

Speaking to reporters at the White House, Trump said, “We have to take the action we are taking right now. We have significantly weakened their capabilities, but they will continue to resist for some time.” His remarks suggested that the U.S. government expects Iran to retain some ability to retaliate.

Although the conflict has lasted more than four months since the U.S.-Israeli strikes on Iran began on February 28, far exceeding the U.S. government’s initial estimate of four to six weeks, Trump continued to downplay the possibility of an indefinite conflict.

Trump compared the current situation with the Vietnam War, saying, “We fought in Vietnam for 19 years. We have only been here for four months, so I think we have accomplished a lot.” While Trump did not provide a specific plan to end the conflict, he insisted that a negotiated agreement with Iran could eventually be reached, while acknowledging that the possibility of reaching a deal in the near term remains low.

Trump says the U.S. will destroy Iran’s Pickaxe Mountain nuclear facility

U.S. President Donald Trump said on Monday that the United States would destroy Iran’s Pickaxe Mountain facility and warned that Washington would continue launching heavy strikes against Iran.

In an interview, Trump said, “We are going to destroy Pickaxe Mountain. Tell the Iranians to be prepared. We are closely monitoring Pickaxe Mountain and have not seen any activity there. Their nuclear program is not progressing well. We may take action against Pickaxe Mountain soon.”

Located near Iran’s heavily damaged Natanz uranium enrichment facility, Pickaxe Mountain is a highly fortified site featuring two tunnel complexes buried deep underground. Experts believe that even the most powerful bunker-busting bombs in the U.S. arsenal may struggle to penetrate these underground facilities.

Burnham secures U.K. Labour Party leadership and is expected to become prime minister on July 20

According to reports from the U.K. on July 13, Labour MP Andy Burnham has secured nominations from 349 of the party’s 403 lawmakers, effectively guaranteeing his position as Labour Party leader and potentially allowing him to become the next British prime minister on July 20.

Under Labour Party rules, leadership candidates must receive nominations from at least 81 Labour MPs to proceed to the next stage of the contest. At present, no other candidate has met the threshold required to enter the race.

Burnham still needs support from three affiliated Labour organizations, including at least two trade unions, but observers generally consider this a procedural step.

Trump backs bipartisan Russia sanctions bill targeting countries buying Russian energy

U.S. President Donald Trump has decided to support a bipartisan Russia sanctions bill led by Senator Lindsey Graham. The move was announced after Graham’s death and is expected to help advance the legislation through Congress.

The bill would authorize Trump to impose substantial tariffs on countries that continue purchasing Russian oil, natural gas, and uranium, increasing pressure on Moscow over the conflict in Ukraine.

Bipartisan Senate leaders said passing the bill would honor Graham’s political legacy, and lawmakers are currently completing the final procedures before a Senate vote.

U.S. military to impose a naval blockade on Iran from 20:00 GMT on July 14

On July 13, the U.S.-led Joint Maritime Information Center announced that the U.S. military would begin enforcing a naval blockade of all Iranian ports and coastal areas starting at 20:00 GMT on July 14 (04:00 Beijing time on July 15).

The blockade will apply to all vessels regardless of their flag. The scope of the operation covers Iran’s entire coastline, including but not limited to Iranian ports and oil terminals.

The blockade will not prevent neutral vessels from transiting through the Strait of Hormuz to destinations outside Iran or departing from non-Iranian locations. Humanitarian shipments will be permitted but will be subject to inspection.

Waller: A rate hike may be needed soon to curb core inflation

Federal Reserve Governor Christopher Waller said on Monday that the U.S. economy remains in good condition, with a stable labor market and resilient consumer demand. However, monetary policy is facing a crossroads due to inflationary pressures from tariffs, energy prices, and artificial intelligence infrastructure investment.

“Regardless of the measure used, inflation has been rising this year,” Waller said.

The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) price index excluding volatile food and energy components, rose to 3.4% year over year through May. The measure began increasing in January, before the outbreak of the U.S.-Iran conflict, and has continued to rise steadily.

Waller said inflation would need to show several consecutive months of lower readings before it can be considered to be moving in the right direction.

If another core inflation report due this week remains elevated, it would indicate continued broad-based price pressures, and the Federal Reserve may need to raise interest rates in the near term.

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