Lanhee Chen analyzes the US-Iran conflict, noting the tension between President Trump's desire to end hostilities (to address high energy prices) and the need for a victory narrative. He discusses political pressure on Trump, the dominance of economic issues for American voters, and the inward-looking nature of the American public, which is fraying strategic alliances.
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NDX
RUT
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Metals
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Hoover Institution
6.0
Research Institute
Lanhee Chen
7.5
The war has taken a really significant toll on the price of energy and the availability of energy.
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reliably incorrect, often opposite to market
yields
With energy prices rising due to the Iran conflict, inflationary pressures increase, which would push yields higher in the short term.
What is going through President Trump's mind given the prolonged period of inaction and sudden escalation with Iran?
Shery Ahn / Heidi Stroud-Watts
Lanhee Chen
The president faces tension between wanting to end hostility to address high energy prices and needing a good end to the war where both Americans and Israelis can claim victory. Iran isn't giving on key demands.
A deal was said to be close, but the president got pushback from domestic constituencies who would accuse him of doing the same deal as Obama.
The president faces pushback on Pentagon spending, immigration, and tariff refunds. How much pressure is he under?
Shery Ahn / Heidi Stroud-Watts
Lanhee Chen
There is political pressure from Republicans concerned about midterm elections, but the president has always been a go-it-alone leader. The pressure may not be as acute as outsiders think.
The president has accepted he'll have to go it alone on many things, having done executive actions since day one.
What is your take on how President Trump is viewed halfway through primary season?
Shery Ahn / Heidi Stroud-Watts
Lanhee Chen
Trump continues to dominate the Republican Party, defeating incumbents who opposed him. However, his approval rating is lower than when he took office, making it challenging for Republicans to hold the House.
Republicans will likely retain the Senate but face a very challenging campaign for House members.
What is top of mind for the American public? Cost of living crisis? Interest in China rivalry or Middle East?
Shery Ahn / Heidi Stroud-Watts
Lanhee Chen
Economic issues, especially pocketbook issues and cost of living, dominate American voters' concerns. Energy costs are a deep concern impacting Republican political fortunes.
The US-China relationship is in a period of relative quiet. Public interest is always focused on economic issues ahead of elections.
The energy crisis and US destruction in the Middle East have frayed alliances. What are you hearing from partners in the region?
Shery Ahn / Heidi Stroud-Watts
Lanhee Chen
Many US allies are questioning how America views strategic relationships. The American public has turned inward, thinking less about what happens outside borders, which is fraying important geopolitical relationships.
There is still value and appreciation for alliances with places like Australia and Japan, but the intensity and awareness of their importance is lower than 10-15 years ago.