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Worse Than a Recession? Trump’s Tariffs Risk ‘Self-Inflicted’ Stagflation

Stagflation isn’t just a thing of the past. High inflation and economic stagnation could bring it back.

President Donald Trump’s turbulent tariff agenda, combined with mass deportations and increased national debt, has created heightened volatility in financial markets. Though many economists say there’s low risk of a job-loss recession, others say we’re at a critical crossroads, as consumer sentiment sours and the labor market sputters. 

Some analysts have even posited that the economy could be circling the drain toward stagflation, a rare and toxic scenario of slowing growth and high inflation. In the 1970s, stagflation — a combination of inflation and stagnation — was a major economic crisis characterized by double-digit inflation, steep interest rates and soaring unemployment.

In a June study by Apollo Global Management, chief economist Torsten SlĂžk warned of ongoing stagflationary risks. “Tariff hikes are typically stagflationary shocks — they simultaneously increase the probability of an economic slowdown while putting upward pressure on prices,” SlĂžk wrote. “The current tariff regime increases the chance of a US recession to 25% over the next 12 months.” 

Stagflation is considered to be an even worse economic prognosis than a typical downturn, as the government lacks effective policy prescriptions to control it. “There may not be an easy path to monetary or fiscal stabilization,” said James Galbraith, economics professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

US households, already struggling to afford the high cost of living, are preparing for what’s next. Whether we’re headed for a recession or a period of stagflation, taking steps to proactively safeguard your finances becomes all the more critical.

Are we still at risk of a recession?

Rampant economic uncertainty often triggers recessionary conditions as companies and households start to reduce spending and investment. During a recession, unemployment goes up, and the prices of goods begin to decline. It’s generally harder to obtain financing, as banks tighten their requirements to minimize their risk of lending to borrowers who may default on loans. 

The economy regularly experiences periods of booms and busts, with downturns occurring roughly every five to seven years. “We are due for a reset and a slowdown in the economy,” said Greg Sher, managing director at NFM Lending. 

Certain macroeconomic hallmarks, like shrinking GDP and rising joblessness, are consistent across all recessions. But every US recession is also unique, with a different historical trigger. The Great Recession of 2007-09, which kicked off with the subprime mortgage crisis and the collapse of financial institutions, was the longest. The COVID-19 pandemic recession, resulting from lockdowns and the loss of 24 million jobs, was the shortest recession on record.

Working-class and middle-class households experience the day-to-day hardship of a recession well before the National Bureau of Economic Research makes the official call. Folks on the margins also experience a much slower recovery after a recession is declared to be over. 

Relying on hard data like GDP and employment to determine recessions is faulty. Because those figures are backward-looking, they tell us where the economy was before, not necessarily where it’s heading. Many economists note that unemployment is worse than what the headline figures report. 

Here are some of the key warning signs of a recession:

Declining gross domestic product (GDP)

A sustained drop (typically two consecutive quarters of negative growth) in the country’s total output of goods and services signals the economy is shrinking.

Rising unemployment

When businesses cut costs, hiring slows down and layoffs increase for a sustained period. Households receive less income and spend less.

Declining retail sales

When people buy fewer goods in stores and online, it shows weakening demand, a key driver of the economy.

Stock market slumps

A significant and lasting drop in stock prices often reflects investor worry about the economy’s future.

Inverted yield curve

When short-term bond interest rates become higher than long-term rates, it can signal that investors expect a weaker economy ahead.

Could we be facing stagflation?

Stagflation would mean having less purchasing power as prices go up and saving becomes more difficult. Jobs become harder to find, investments might take hits and interest rates could rise. Stagflation is typically measured by the “misery index,” the sum of the unemployment rate and the inflation rate, reflecting the level of economic distress felt by the average person.

For decades, experts didn’t believe stagflation was possible because it goes against basic principles of supply and demand. Usually, when more people are out of work, prices go down because demand for goods and services is lower. 

But stagflation began to rear its head in the 1970s. Growing government debt, fueled by military spending on the Vietnam War, sent prices soaring. Soon after, the energy crisis hit. In 1973, OPEC’s oil embargo resulted in a massive supply shock, worsening inflation and depressing output. 

Official unemployment peaked at 9% while inflation kept ratcheting higher and eventually surpassed 14% year over year. A second oil supply shock in 1979 prompted the Federal Reserve to raise interest rates to record highs, above 20%. While that approach worked to bring inflation down, it prompted a severe recession. 

Most economists say the likelihood of entering a period of stagflation is still quite low, but others like SlĂžk warn that Trump’s trade policies could fuel the fire. At the same time, the dollar and the balance sheets of major financial institutions are in a much stronger position than in the 1970s.

What role do tariffs play?

Since February, new import taxes have been announced, delayed, raised and reduced in quick succession. If tariffs are eventually implemented as announced, the average rate on US imports will be the highest in a century, back to the levels last witnessed during the Great Depression. 

Tariffs, which are import taxes on goods from another country paid by the importer, can have a similar effect to oil supply shocks, causing widespread disruptions and cost increases along supply chains. Companies either pass on those increases to domestic customers, triggering more inflation, or they cut back on investments and output, leading to layoffs and weakened growth. 

“Big tariffs right now wouldn’t just make inflation worse — they could set off a chain reaction of economic trouble that central banks and governments aren’t ready to handle,” said Sher. According to Sher, there’s a misguided assumption that consumers will be willing to pay the higher cost of goods brought on by tariffs. “Consumers will be more likely to sit on their hands and stop spending, which will further stoke the recession flames,” said Sher. 

There are signs that tariff-related uncertainty is causing cracks in the labor market. Even as unemployment remains relatively low, currently at 4.1% according to the Bureau of Labor Statistics, hiring has slowed and those currently out of work are finding it nearly impossible to find gainful employment.

Is there a solution to stagflation?

There’s an established, if imperfect, playbook for diminishing the impact of a recession. The Fed, which is in charge of maintaining price stability and maximizing employment, usually lowers interest rates to stimulate the economy and buoy employment during a downturn.

When inflation is high, however, the Fed typically raises interest rates to combat price growth and slow down the economy by making credit and borrowing more expensive for consumers and businesses. The two approaches can’t be taken simultaneously. 

“While prices are on the firm side and growth has cooled from a too-warm pace, unemployment remains closer to historic lows than not,” said Keith Gumbinger, vice president at housing market news site HSH.com. “We don’t have stagflation per se, at least as yet.” 

Gumbinger said stagflation is more intractable than a recession. It has a trickier path because the go-to policies used to address one problem often worsen the other. 

Right now the Fed is in a bind. Lower interest rates can boost a weaker economy, but they can also stoke inflation. If inflation remains sticky, the central bank is more likely to continue pausing rate cuts. The president’s habit of making knee-jerk policy announcements, only to delay or reverse them weeks later, makes it even harder for policymakers to course correct. 

That kind of government paralysis could drag out economic hardship, especially for the most financially and socially vulnerable populations. While the average recession lasts about 11 months, the last bout of stagflation in the US lasted more than 10 years.

If a recession or stagflation materializes, it would be a “self-inflicted” injury resulting directly from US government policy, said Kathryn Anne Edwards, labor economist and independent policy consultant.

How can you prepare for an economic downturn? 

Stagflation could feel like a recession with the added pain of high prices, making it difficult to prepare for and even harder to navigate. Still, experts say you’ll want to take some of the same steps you would ahead of an economic downturn. 

Establish your emergency fund. Having an emergency fund is a good idea in any economy. During an economic downturn, high unemployment can make it harder to get back on solid financial footing if you have a sudden expense. If your savings cover at least three to six months of living expenses, you can more easily weather a financial storm without relying on credit cards or retirement savings.  

Make a financial plan. Focus on paying down debt, particularly high interest credit card debt, so you don’t have to carry a balance when times are tougher. Postpone making any major purchases that overstretch your budget and that you’ll regret having to pay off in a year or two. Avoid panic buying things like laptops, phones or cars just to get ahead of expected price increases. 

Review your investments. Given the level of economic uncertainty, expect the stock market to have more volatility. If you mostly have high-risk investments, consider diversifying with a variety of low-risk accounts, or combining stocks and bonds. Consult with an adviser about inflation-resistant assets and having a more balanced portfolio based on your individual risk tolerance, age and financial goals. 

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NBA commissioner Adam Silver says league could introduce ‘smart ball’ technology as soon as next year

Commissioner Adam Silver says the NBA could begin using a new “smart ball” in games as soon as next year, potentially transforming how officials make calls.

NBA Commissioner Adam Silver says the league could begin using a new “smart ball” in games as soon as 2027, potentially transforming how officials make calls on the basketball court.

In an interview with CNBC’s Contessa Brewer, Silver revealed that the NBA is working with official basketball manufacturer Wilson to develop a ball embedded with a tiny microchip Bluetooth sensor that can track movement, spin and changes in trajectory.

“We’re experimenting with putting a small chip in the ball that weighs roughly a gram,” Silver said.

The technology has already been tested in the NBA’s G League, Summer League, and some preseason games, where players used basketballs both with and without the chip. Silver said players have been pleased with the results.

“Nobody could tell the difference. So that’s a good sign,” he said.

The chip weighs just one gram, compared with the roughly 620-gram or 1.4 pound basketball. Silver said the league wanted to ensure that even the most experienced players wouldn’t notice a change in how the ball feels or bounces.

One of the most immediate applications could be officiating.

Silver said the technology could help referees determine whether a player touched the ball before it went out of bounds by detecting subtle changes in its spin. It could also help identify whether a shot’s trajectory was altered.

“I think you could see as soon as next year us using it for officiating in our games,” Silver said.

Beyond officiating, Silver sees a significant opportunity to bring the technology to consumers, allowing basketball players of all ages to analyze and evaluate their shooting mechanics.

For example, a player taking hundreds of shots could use data collected by the chip to understand which shooting angles and ball rotations are most likely to result in a basket.

“You’ll then see the graph, and you’ll see for which the angle of the shots that went in, they’re more likely to go in,” Silver said.

While the officiating application could arrive as soon as next year, Silver said a consumer version may take longer.

“I think the consumers version [of the smart ball] is a few years away, but it’s a really exciting opportunity.”

NBA players’ union raises concerns over wearables

The league is also exploring the use of wearable technology during games, but negotiations with the National Basketball Players Association have yet to produce an agreement.

The NBA says officials experimented with wrist wearables in select preseason and summer league games this year in a “successful pilot program,” but it will not extend into the season. The technology allowed the referees to communicate with the replay center about reviews, scoring changes and clock malfunctions.

Silver said players routinely use wearable devices off the court to monitor everything from sleep to physical performance, but concerns remain over how data collected during games could be used by teams.

“I think we have to come to some agreement on exactly how the information is used. But it seems everybody wants that information,” Silver said.

The biggest sticking point is whether that information could affect contract negotiations, Silver said.

“If you could see a player was slowing down or something like that, they’re worried that that could get used in bargaining, and I get that,” he said.

Silver acknowledged those concerns and said the league needs to reach an agreement with the players’ union on how the information would be used.

Still, he suggested that allowing wearables during games is a logical next step as athletes increasingly rely on technology to monitor their performance.

“I think the players are in a position right now where they’re essentially wearing wearables 22 hours a day, and the only time they’re not wearing them is when they’re playing in the game,” Silver said. “So that can’t make sense.”

“We’ll work something out with them,” he added.

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AI’s quiet safety gatekeepers are stepping into the spotlight

The intensifying AI safety debate is bringing a small group of third-party evaluators into the center of a multitrillion-dollar industry.

Two months ago, independent evaluators occupied a relatively sleepy corner of the multitrillion-dollar artificial intelligence industry. Now they’re being asked to come to its rescue.

While Anthropic and OpenAI are the heart of a fierce debate over whether they can safeguard their advanced models and grow their businesses simultaneously, the companies are seeking support from a handful of small third-party groups like Model Evaluation and Threat Research (METR), Apollo Research and Transluce.

The evaluators, which mostly operate as nonprofits, are still finding their footing in an industry where capital is flowing at historic levels and new models are rolling out faster than ever. Their primary role has been to assess AI model capabilities and risks, and to call attention to instances where the technology behaves badly.

In the absence of a federal push for regulations, evaluators have taken on outsized importance. Anthropic CEO Dario Amodei pledged to embed independent evaluators in his company last month – a move that OpenAI CEO Sam Altman quickly endorsed.

President Donald Trump supported the idea, as did most of the largest U.S. tech companies. But left unanswered are questions about how those third parties should be funded, what level of access they will have and what the reporting structure will ultimately look like.

“To a degree, the problem, as always, is money,” Suresh Venkatasubramanian, a computer science professor at Brown University, told CNBC in an interview. “Who is paying for these companies to do their work? How are they going to support them? You need an ecosystem, you need a viable business model for this.”

Right now, Anthropic, OpenAI and the infrastructure partners that are profiting from the AI boom are writing the rules. Critics say that’s like asking the biggest banks to protect us from a financial crisis or allowing pharmaceutical companies to put drugs on the market without regulatory clearance.

President Trump recently lauded AI executives for their “tremendous self-policing,” and signaled that he intends to leave companies to their own devices, unwilling to impede the growth of the industry that’s driving the economy and stock market. Trump encouraged AI companies to “partner with an independent external auditor or evaluator” as part of a voluntary accord he presented in late September.

It’s a conversation that Amodei kicked off In his viral essay last month, when he called for a “slower pace” in advanced model development after researchers left his company and voiced their concerns about the existential threats the technology poses.

As the AI labs move to put evaluators in place, friction is already starting to emerge.

OpenAI fired three employees last week for “violating our policies on accessing and handling sensitive company information,” according to a spokesperson. Two of those employees, Mikita Balesni and Tomek Korbak, said they believe they were dismissed because of how they communicated with third-party evaluators.

“My former colleagues are telling me they are confused about what to believe,” Balesni wrote in a post on X on Thursday. “They also are afraid to speak, and worry their personal phones will be searched for messages to us and third parties. I worry the pervading fear to speak up and engage with third parties will mean OpenAI will cut corners on safety behind closed doors.”

OpenAI disputed that characterization and said in a post on Friday that it’s “actively finalizing contracts with third-party safety assessors and will announce details in the coming weeks.”

“We are committed to embedding external assessors and continue to make close collaboration with independent safety organizations a core part of our safety work,” OpenAI wrote.

An OpenAI spokesperson said in an emailed statement that its upcoming work with evaluators “builds on existing collaboration with independent safety organizations,” including METR and Redwood Research.

Anthropic didn’t respond to CNBC’s request for comment.

‘I’ve never seen an issue move so fast’

The AI evaluator ecosystem consists mostly of small organizations, including METR and Apollo Research, and larger accounting and auditing firms like Accenture.

AI labs have been working with evaluators in limited capacities, but Andrew Freedman, CEO of policy nonprofit Fathom, said the field is quickly maturing.

“I’ve worked in politics and policy for the last 20 years of my life, and I’ve never seen an issue move so fast on so many different political spectrums,” Freedman told CNBC in an interview. He said he expects an “influx of capital” to flow into the ecosystem.

Rayan Krishnan, CEO of independent evaluator Vals AI, said his for-profit startup, which builds benchmarks to measure how AI models perform on industry-specific tasks, has grown from eight employees to roughly 30 this year, and in August announced a $40 million funding round.

METR, a nonprofit, announced in August that it had raised commitments of around $71 million over the last six months. That’s up from total 2024 contributions of $13.6 million, according to the group’s most recent filing with the Internal Revenue Service.

By late that month, METR’s profile had risen further. OpenAI enlisted two of its employees and a contractor to put together a postmortem report detailing how the company’s models escaped containment, accessed the open internet and breached open-source developer platform Hugging Face. METR said it did not accept payment from OpenAI for the assessment.

Kevin Werbach, faculty director of the Wharton Accountable AI Lab at the University of Pennsylvania, said the ecosystem is “not robust enough right now.” METR, for example, employs fewer than 50 full-time staffers, according to its website.

The power imbalance between the small evaluators and the leading labs that have raised tens of billions of dollars and employ thousands of people raises questions surrounding potential conflicts.

“If you want true third-party evaluation, you need true independence financially and otherwise,” said Venkatasubramanian. “It’s not just a matter of not getting paid, it’s a matter of, will there be consequences if I am an auditor and I put out a report that looks unfavorable to this company? Is my business going to dry up?”

Anthropic acknowledged the complexity in a blog post last month, as it announced it will embed employees from Faculty, Accenture’s specialist AI business, to test safeguards and assess whether models will behave in line with human values. Anthropic said that “given the importance and urgency of this work,” it will fund Accenture’s contributions directly.

“There are, as yet, no standards for what information embedded evaluators should have access to, or how they should report what they find. There is also no settled system for funding independent evaluation,” Anthropic said. “Long-term, we think funding should come from pooled or government sources.”

Anthropic said it’s in discussions with METR and other nonprofit evaluators that are planning to use their own funding to pilot “elements” of embedded evaluation.

Will the government step in?

In June of last year, Fathom introduced a marketplace framework for Independent Verification Organizations, or IVOs. These groups would be licensed by the government and authorized to test whether AI companies are meeting various safety criteria.

Freedman, the group’s CEO, said government oversight is key because otherwise third-party evaluators can become beholden to the large AI labs for revenue, incentivizing them to “start rubber stamping stuff” to maintain favor.

Some lawmakers are on board.

IVOs are a key provision of the ″Frontier Risk Oversight, National Transparency, Independent Evaluation, and Reporting” (FRONTIER) Act, which Reps. Lori Trahan, D-Mass., and Jay Obernolte, R-Calif., introduced in July. Fathom helped draft language and provided technical expertise for the bill, Freedman said.

OpenAI global affairs chief Chris Lehane told reporters in September that he sat down with one of the bill’s sponsors on Capitol Hill to express support for the IVO provision.

“It was important for them to hear that and hear it from us, and we wanted to be really clear about that,” Lehane said, according to reports.

Meanwhile, lawmakers in California, Connecticut and Virginia have taken steps to implement IVOs, and states like Massachusetts are weighing independent safety evaluations more broadly.

California Governor Gavin Newsom recently signed two bills involving IVOs, one establishing a “first-in-the-nation framework,” and the other creating a state registry for AI auditors. Anthropic threw its support behind both bills in August, and OpenAI formally endorsed them last month, the same day Newsom signed them into law.

Lehane wrote in a blog post at the time that “we prefer independent technical assessments to be required at the federal level,” but in the absence of federal action, “California can help establish the rules of the road.”

Freedman said he thinks it will be “really difficult” for companies like OpenAI and Anthropic to work out how to engage with independent evaluators on their own. However, with the government’s role unclear, “it’s a muscle worth developing in the interim,” he said.

For now, the closest thing the industry has to a set of standards is what Trump called a “morally binding” agreement at a luncheon he hosted for tech leaders at the White House late last month.

The one-page accord says that “every company is responsible for developing its own technology safely and in a way that builds trust with customers and the public.” It also encourages signees to work with an “independent external auditor or evaluator to carry out independent assessments.”

The document was signed by top execs at Anthropic, Google, Meta, OpenAI, SpaceX and Nvidia, a rare show of solidarity between leaders who have shared conflicting views on addressing AI’s risks. The executives still have to chart their own paths forward.

“It was a performance of an attempt to show action when in fact no action actually happened,” Venkatasubramanian said. “The things that they promise to do are things they should have been doing already, and, in fact, have claimed that they were doing in the past.”

Amodei, in his September essay, said Anthropic will equip evaluators with desks, access badges, company laptops, and permissions that are “mostly comparable” with internal risk assessment teams. Additionally, evaluators will be supported with contracts that give them “the right to publish key findings,” with Anthropic reserving “the narrow ability” to redact certain security-sensitive or confidential information.

“This is an unusual step for a company, but we think it is important to prove out the concept of embedded external reviewers,” Amodei wrote.

OpenAI published its own proposal days later, and said evaluators should work on “scoped and mutually agreed upon claims for assessment,” clearly explain their methodology and standards, demonstrate relevant technical expertise and disclose conflicts of interest.

The AI Evaluator Forum, which includes METR, the AI Verification and Evaluation Research Institute (AVERI), and other groups, published a public letter last month titled, “Minimum Conditions for Embedding Evaluators.”

The letter said evaluators should be transparent, shielded from retaliation and granted access equivalent to AI companies’ “own highly privileged employees.”

“Embedded evaluations cannot address all oversight needs and should be treated as a complement to, rather than a replacement for, broader efforts by frontier AI companies to expand external oversight,” the letter said.

Freedman said he’s seen a shift in posturing out of OpenAI and Anthropic in recent months, largely because they’ve realized they won’t be able to roll out their advanced systems without the public’s trust.

“I don’t think you need to trust that they’ve suddenly turned altruistic or that there’s anything but corporations acting like corporations,” Freedman said.

That underscores perhaps the central problem, Werbach said. OpenAI and Anthropic are, first and foremost, competing with each other as they march toward the public markets and seek trillion-dollar-plus valuations.

“There is a tremendous amount of personal distrust between those two companies,” Werbach said. “Even though there’s also tremendous agreement about the need for this kind of evaluation to happen.”

WATCH: Bradley Tusk on Anthropic IPO: Why add public market pressure if safety is your top priority?

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Trump says he is ‘going to look at’ joining Saudi Arabia in the fight against Iran-backed Houthis after deadly airport strike

U.S. military involvement in the fight against the Houthis would stretch resources in the Middle East already committed to fighting Iran, analysts said.

President Donald Trump said he is considering joining Saudi Arabia in its retaliation against Tehran-backed Houthis in Yemen after a deadly attack on Riyadh’s main airport, a move that could draw the U.S. further into a second front in the Iran war.

“We may. We’re going to look at it,” Trump told reporters outside the White House on Saturday when asked if the U.S. would back Saudi Arabian strikes. “We just found out about the recent attack. So, we’ll make a decision. We move very quickly.”

Two Saudi Arabian government officials told MS NOW that the kingdom is requesting “urgent defense support” from the U.S. following the attacks.

The officials, including a senior member of the Ministry of Foreign Affairs, did not want to be identified because of the matter’s sensitivity. They added that the U.S. needs to intervene “as soon as possible” to help the Saudi-led coalition in Yemen fight the Houthis.

The White House did not immediately respond to a CNBC request for comment.

The Saudi General Authority of Civil Aviation said the attack on King Khalid International Airport in Riyadh killed 12 people and injured 309 others, the country’s official Saudi Gazette media outlet reported.

Colonel Turki Al-Maliki, the spokesman for the Saudi-led Coalition to Support Legitimacy in Yemen, which has been leading the fight against the Houthis, described the attack as a “war crime.”

“Therefore, the Joint Forces Command of the Coalition will respond decisively to this terrorist attack in accordance with the Customary International Humanitarian Law,” Al-Maliki said in a post on X.

It was the second deadly assault on Riyadh’s airport in less than a week.

Three Saudi nationals, including a pilot, were killed in attacks on the facility by Iran-backed Houthi militants on Thursday.

Following Saturday’s attack, the Houthis renewed their warning against using Saudi airports.

“We renew our warning to all airlines, experts, employees, workers and travellers against using Saudi airports and airspace, as they are vulnerable to attack and have become a theatre of operations for our forces, with the exception of the airports in (the holy cities of) Mecca and Medina,” the Houthis said in a post on X.

Saudi Arabia, a key U.S. ally in the Middle East, intervened in Yemen’s civil war between the Houthis and its internationally recognized government after the group seized the Yemeni capital Sanaa in 2014.

Last month, the Trump administration approved the potential $24.3 billion sale of nearly 50 F-35 warplanes to Saudi Arabia in what was seen as a major boost for the kingdom as it faces intensifying attacks from the Houthis. The sale is under congressional review.

International energy conference still on

The Saudi energy ministry said a long-planned international energy conference will still take place in Riyadh on Sunday, Reuters reported.

The five-day WPC Energy Congress is taking place at a convention center near King Khalid airport. State television told Reuters that more than 70 ministers, 300 company executives and representatives of more than 25 international energy organizations have confirmed their attendance, though it was not clear whether the participants would attend in person or virtually.

Reuters said a ministerial meeting of the International Energy Forum is also set to take place, with its plenary session to be held behind closed doors.

Energy choke points

In addition to attacks on civil aviation, the Houthis have also been trying to choke off oil tanker traffic through the Bab el Mandeb strait, a key entry point to the Red Sea, as Iran has effectively done in the Strait of Hormuz to the north of the Arabian Peninsula.

Earlier this month, Yemeni government forces said they reclaimed the strategic port city of Mokha from the Houthis.

Energy prices have soared since the start of the Iran war, which began with U.S. and Israeli airstrikes on Iranian targets on Feb. 28, putting pressure on consumers globally.

The surge in domestic fuel prices has been a key issue for voters ahead of next month’s U.S. midterm elections.

But that support would be expensive militarily.

“Potential U.S. involvement in the Saudi-Yemeni government air campaign to degrade Houthi ballistic missile capabilities would mark the first direct U.S. military action against the group since the conclusion of Operation Rough Rider in May 2025,” according to the Critical Threats Project, part of the American Enterprise Institute think tank.

The offensive aimed to suppress the Houthis’ capabilities, but recent attacks show the group has regrouped.

“After seven months of war, there are questions about the U.S. capacity to wage a sustained campaign against the Houthis, return to combat against Iran if necessary, and prepare for contingencies in other parts of the world, notably East Asia,” Steven Cook, an expert on Arab and Turkish politics at the Council on Foreign Relations think tank, wrote last month.

Meanwhile, the United Kingdom’s defense secretary said his government is also examining how to support Saudi Arabia.

“I’ve spoken to my Saudi counterpart [Khalid bin Salman] on a number of occasions in recent weeks to look at what more we can do to support Saudi Arabia, and I’m afraid last night explains precisely why we are providing that support,” Wes Streeting said in an interview on BBC television on Sunday.

Streeting said the U.K. is not getting involved in offensive operations “at this stage.”

“We’ve always been clear that there isn’t a military solution to this conflict,” Streeting added.

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