The Wall Street Journal reports:

The U.S. and Iran are entering a risky new phase of conflict in which both sides are attempting to maintain pressure and respond to provocations without returning to all-out war, but with an ever-present danger of stumbling across each other’s red lines and triggering a dangerous escalation.

Recent days of hostilities showed how close the two foes have come to the edge even while trying to keep their military actions measured. Iran struck directly at Israel, triggering an escalatory spiral that President Trump struggled to rein in. An Iranian drone then brought down an American Apache helicopter prompting several hours of U.S. retaliatory strikes. Iranian officials tried to portray the downing as an accident, then launched missile and drone strikes on U.S. allies in the Gulf and Jordan in response to the American attacks.

The three days of fighting marked the most serious escalation in the conflict since Trump declared a ceasefire in the U.S. and Israeli bombing campaign against Iran in April, ending nearly 40 days of strikes that began on Feb. 28. It followed a series of skirmishes centered on U.S. efforts to enforce its blockade of Iranian ports and Tehran’s actions to keep shipping through the Strait of Hormuz bottled up.

The military standoff around the strategic waterway—typically the transit point for much of the world’s oil and a key lifeline for Gulf Arab states—has brought U.S. military aircraft flying near Iranian drones and speedboats, creating a high risk of conflict.

“They’re managing the war, but they’re also trying to set the parameters of the ceasefire and win additional leverage through kinetic strikes,” said Dina Esfandiary, a longtime Iran analyst at Bloomberg Economics. “Despite the fact that neither side wants to continue it, I think both sides are prepared to continue it.” [Continue reading…]

CNBC reports:

President Donald Trump on Wednesday said, “I love the inflation” after being asked if he was concerned about new consumer price index data that showed the annual inflation rate at 4.2%, a three-year high.

Trump, speaking with reporters in the Oval Office, also predicted that inflation is “going to come down like a rock” after the United States’ war against Iran is over.

The president linked that prediction to a confusing statement about the U.S. “taking” oil and ships.

“No, I love it, the numbers were great,” Trump said when a reporter asked him about the CPI number issued earlier in the morning by the Bureau of Labor Statistics.

“You know what I really love? I love the inflation. You know why?” Trump said. “Because as soon as this war is over, you know I can say it now … you know we’ve been taking out millions of barrels of oil.”

“Nobody knows it. You know who doesn’t know about it? Iran, until right now,” Trump said.

“We took out the other night, 22 ships, late at night, with no lights, because they don’t have any radar, because we blasted the crap out of it,” the president said. “That’s why oil is at $85 a barrel.”

“We’ve been taking out millions of barrels of oil, millions of barrels every night,” Trump said.

It was not immediately clear what Trump meant by “taking out” oil and ships, and how that related to consumer prices. [Continue reading…]