Strait of Hormuz Flare-Ups Amplify US-Iran Risks

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Summary

**A weekend of clashes and missile strikes in the Strait of Hormuz has strained a fragile US-Iran ceasefire, casting doubt on President Trump’s promise of falling gas prices.** The US and Iran agreed to stop attacking each other Sunday before peace talks resume, but the tit-for-tat violence raises new questions about the truce and each side’s willingness to exert control over the strategic waterway. Brent crude jumped as much as 1.9% before easing, while traffic through the strait fell, though it remained higher than during much of the war. The escalation threatens to overshadow the July 4 celebrations Trump has invested heavily in.

**The South, long a magnet for retirees and professionals due to its affordability, is now grappling with the “Southern squeeze” of rising costs.** States like Georgia, Tennessee, Florida, and the Carolinas are seeing property valuations and taxes surge as population influx drives up prices. A Nashville bar owner reported his annual property tax bill jumping from $129,000 to $590,000 in eight years, and the spike in gas during the Iran war hits sprawling Southern metro areas especially hard. Politicians in the region must now address the feeling that the benefits of living there are slipping away, even as the growing population boosts the region’s political power.

**The Supreme Court is set to rule this week on two of Trump’s most audacious efforts: ousting a Fed governor and rolling back birthright citizenship.** Meanwhile, Speaker Mike Johnson will send a bipartisan housing bill to Trump, starting a 10-day clock for a veto or signature, and a new House bill would restrict federal mortgages to US citizens only. Comcast plans to spin off NBCUniversal and Sky, while ex-Disney CEO Bob Iger and Thrive Capital’s Joshua Kushner eye a bid for an NBA expansion team in Las Vegas. The founders of major AI companies have pledged to give away most of their wealth, but Congress is wary of the tax implications, with one senator calling it “elite mischief.”

**What to watch next:** The outcome of US-Iran peace talks this week and the Supreme Court rulings on birthright citizenship and the Fed governor’s ouster, which could reshape executive power and immigration policy.

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I’m Jonathan Tamari, senior Washington reporter for Bloomberg Government, and each weekday I’ll be coming to you with inside-the-room reporting and insights that reveal what’s really happening in Washington—and how it impacts you. Email me with feedback and comments here. If this newsletter was forwarded to you sign up here.

Today: Iran tension rises, the South loses its affordability edge, and Greenland’s unwanted investors.

Strait Shooting

It’s a lot easier to start a war than to end one.

A weekend of clashes and missile strikes showed just that, straining an already fragile ceasefire between Washington and Tehran.

The US and Iran agreed to stop attacking each other Sunday before peace talks resume this week.

But the weekend tit-for-tat brings new questions about the truce, and how far each side is willing to go to exert control over the Strait of Hormuz.

It also cast new doubt on Donald Trump’s promise of quickly falling gas prices and threatens to shadow the July 4 celebrations he’s invested much energy in.

Brent crude jumped as much as 1.9% before easing back somewhat. Traffic through the strait fell, though it was still higher than during much of the war.

Southern Discomfort

The South has been a hotbed of growth for a long time. Now come some of the downsides.

After decades of attracting retirees and Black professionals with their affordability, states like Georgia, Tennessee, Florida, and the Carolinas are feeling the price surges that go along with that influx of people and money.

It’s what my colleagues Brett Pulley and Jonnelle Marte dub “the Southern squeeze.”

It’s a great read for the human and economic picture it paints, and there’s plenty for the politically minded too. The growing Southern population has added to the region’s power in House seats and electoral college votes, and changed some deep-red states into battlegrounds.

While economic concerns are felt across the country, politicians in the region will have to address the feeling that the benefits of living there are slipping away.

“We’re at risk of losing our cost-of-living advantage,” says Christian Paro, a New Yorker who moved to Nashville 21 years ago. “The property valuations and costs have gotten absurd.”

This chart shows what people in the region are up against:

That’s just one cost. A Nashville bar owner described how his site’s annual property tax bill grew from $129,000 to $590,000 in eight years.

The spike in gas during the Iran war also hit especially hard in sprawling southern metro areas where driving is essential.

“You have a lot of people who are not poor” but are struggling to save, Gregory Acs of the Urban Institute, told my colleagues. “‘Can I get ahead, or am I just stuck treading water?’”

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