News Items is “the most valuable newsletter out there.” — Peggy Noonan.
1. For much of the war, Russia’s air assaults followed a battle-tested formula: first, waves of drones to saturate and tie up air defenses; then, once a path was cleared, a salvo of highly destructive missiles. But as Ukraine now struggles with severe air defense shortages, Russia is going straight for the missiles. Overnight on Thursday, it opened a deadly air assault with a volley of ballistic missiles that resulted in several explosions across Kyiv, the capital, suggesting that some had hit their targets. The change in tactics is a sign that the Russian military is growing more confident of penetrating Ukrainian defenses, after weeks of attacks that have depleted Ukraine’s stocks of interceptors. In some of Russia’s overnight barrages, the Ukrainian military has been unable to shoot down a single ballistic missile. (Source: nytimes.com)
2. A military junta is consolidating power in Iran. Over the past few days new billboards have appeared in Tehran, Iran’s capital. They depict the seven men who have taken charge in Iran since Ali Khamenei, the former supreme leader, was killed in an Israeli air strike on February 28th. Most remarkable is what the billboards do not show. There is no sign of Mojtaba Khamenei, the new supreme leader, who has not been seen in public since he was appointed. Nor are there any of the traditional religious symbols, such as the black and red flags of Imams Ali and Hussein. Only one of the seven men wears a turban. The billboards are the latest sign that a new crop of leaders from the Islamic Revolutionary Guard Corps (IRGC) is consolidating power in Iran. Battle-hardened and results-driven, they are focused on security and repression, and are turning the theocratic foundations of the Islamic republic into a military dictatorship. (Source: economist.com)
3. The New York Times:
President Trump this week promised an “economic D-Day” against Iran, a “crushing” operation to “cripple” Iran. The U.S. clampdown is formidable, a combination of wartime destruction, a naval blockade and sanctions that have already put the Iranian economy under more pressure than its regime has experienced in decades.
But between the lines of the administration’s threats was a signal that Mr. Bessent made as clear as ever on Thursday: Mr. Trump does not want to go back to war right now. The president is waging an economic campaign against Iran having already spent weeks bombing the country earlier this year, and having stepped back from multiple threats since then to resume the violence.
As a result, experts say, Mr. Trump is stuck in a conflict with limited leverage, a demonstrated vulnerability and an emboldened adversary….“They read him now as not wanting to escalate militarily,” Dennis B. Ross, a former Middle East negotiator for presidents of both parties, said of Iran’s leaders. “That creates an incentive for them to show that they may escalate militarily.” (Source: nytimes.com)
4. Greg Ip:
This year’s upward march in bond yields has many drivers, from sticky inflation to heavy AI-linked corporate borrowing. Lurking in the background, though, is a more troubling possibility. Treasurys, long the world’s preferred “safe” asset, are looking less safe. Relative to other securities, their yields are no longer quite so low, and in moments of stress, they don’t behave like a haven. The main reason for this is that since the pandemic, the U.S. has flooded the market with additional debt, reaching $40 trillion, including intragovernmental debt, this week. There is no sign that the flood will abate. The U.S. Treasury’s surprise announcement Wednesday that it would boost buybacks of less-liquid longer-term debt simply treats the symptoms rather than the underlying cause. The move, while reducing yields in the short run, might yet raise them in the long run by eroding the U.S.’s reputation for stability and predictability. (Source: wsj.com)
