Government and Policy Sector

President Trump declared the U.S. the "guardian" of the Strait of Hormuz—a waterway through which 20% of the world's oil moves—and will charge shipping companies a 20% fee for safe passage, resuming a blockade of Iranian ports starting Tuesday (CNBC). Oil prices spiked and stock indexes fell on the announcement; the UN's International Maritime Organization said there is "no legal basis" for mandatory tolls on international straits, while Iran's foreign minister countered that Iran controls the strait and should be compensated instead. Experts including former State Department official David Goldwyn called the policy "extortionate" and questioned whether the U.S. can actually guarantee safe passage given recent attacks in the region.

Federal Reserve Governor Christopher Waller cautioned the Fed against "fighting the last war" on inflation—overreacting to recent price pressures the way it underreacted in 2021—but left room for future rate increases if data warrants (CNBC). Waller cited new inflation drivers beyond energy and tariffs, including artificial intelligence demand spillovers, and said "sternly staring at inflation until it melts" is not a viable strategy. The Fed meets in late July with markets pricing roughly a 39% chance of a rate hike, and Waller said he wants to see several months of lower core inflation readings before feeling confident the problem is solved.

The Trump administration issued guidance Monday from three federal banking regulators directing banks to view immigrants without U.S. work authorization as "elevated credit risk" due to income instability, the latest financial-system enforcement of stricter immigration policy (CNBC). The guidance doesn't impose new rules but "reminds" banks of existing duties to assess borrowers' ability to repay; critics warn this could chill banking use even among authorized immigrants, raise compliance costs, and push money into unregulated channels where fraud risk rises. Data on unauthorized immigrants' lending is scarce—only about 5,000 to 6,000 Individual Tax Identification Number mortgages (used mostly by unauthorized immigrants) were made in 2023 against 4.6 million total originations.