Trump Intensifies Attack on Fed, Demands Rate Cuts

Tehran has delivered a stark warning to U.S. allies across the Middle East: any American attack on Iran will trigger retaliatory strikes against U.S. military bases on their soil. A senior Iranian official confirmed the message was sent as President Donald Trump threatened to support ongoing nationwide protests in Iran.

The clerical establishment is struggling to suppress one of the most significant challenges to its authority since the 1979 Islamic Revolution. As the government cracks down, a rights group reports the death toll from the unrest has risen to almost 2,600.

US Signals Intervention as Tensions Mount

According to an Israeli assessment, President Trump has already decided to intervene, though the specifics of the plan remain unclear. Trump himself has vowed "very strong action" if Iran executes protesters, telling CBS News, "If they hang them, you're going to see some things." He also encouraged Iranians to continue protesting and declared "help is on the way," without providing further details.

This rhetoric has escalated an already tense situation. The Iranian official, who spoke anonymously, stated that Tehran had asked U.S. allies in the region, including Saudi Arabia, the UAE, and Turkey, to prevent Washington from launching an attack. The message was clear: "U.S. bases in those countries will be attacked" if Iran is targeted.

Reflecting the breakdown in communication, direct contact between Iran's Foreign Minister Abbas Araqchi and U.S. Special Envoy Steve Witkoff has been suspended.

The United States maintains a significant military presence in the region. Key installations include the headquarters of the U.S. Navy's Fifth Fleet in Bahrain and the Al Udeid Air Base in Qatar, which serves as a forward headquarters for U.S. Central Command. Iran previously launched missiles at Al Udeid last year following U.S. airstrikes on its nuclear facilities.

The Scale of the Crackdown

The flow of information out of Iran has been severely restricted by an internet blackout, but reports paint a grim picture of the government's response.

Figure 1: Scenes of destruction have become common during the unrest, with vehicles often targeted and set ablaze in nighttime clashes.

Here are the key figures reported:

• Fatalities: The U.S.-based rights group HRANA has verified 2,403 protester deaths and 147 deaths among government-affiliated individuals. An Iranian official separately told Reuters that about 2,000 people had been killed.

• Arrests: HRANA has also reported 18,137 arrests so far.

Iranian authorities have blamed the violence on the United States and Israel, accusing them of fueling the unrest and labeling protesters who attack security forces and public property as terrorists.

Figure 2: A burnt-out bus stands as a testament to the intensity of the protests that have swept across Iran.

Tehran Hardens Its Stance

Iran's chief justice, during a visit to a Tehran prison holding arrested protesters, called for speed in judging and penalizing those "who beheaded or burned people" to prevent future incidents.

Meanwhile, the Iranian Kurdish rights group Hengaw reported that Erfan Soltani, a 26-year-old man arrested in the city of Karaj, was scheduled to be executed on Wednesday. Hengaw could not confirm if the sentence was carried out due to the communications shutdown.

Figure 3: Charred public transport vehicles on a city street highlight the destruction of property during the nationwide demonstrations.

In a show of support for the government, pro-regime rallies were held on Monday. So far, Iran's security forces have shown no signs of fracture and have continued to quell the protests.

Regional and Economic Pressure Builds

The crisis is being closely watched across the region. A second Israeli source confirmed that Prime Minister Benjamin Netanyahu's security cabinet was briefed on the possibility of a regime collapse in Iran or a U.S. intervention.

Figure 4: A car completely gutted by fire illustrates the destructive nature of the ongoing civil unrest in Iran.

Tehran is navigating this internal crisis while still recovering from last year's war and dealing with a weakened regional position after setbacks for allies like Lebanon's Hezbollah.

In an effort to maintain diplomatic ties with its neighbors, Iranian officials have been in contact with counterparts in Qatar, the UAE, and Turkey. According to state media, Foreign Minister Araqchi told the UAE's Foreign Minister Sheikh Abdullah bin Zayed that "calm has prevailed" and that Iranians would defend their sovereignty against any foreign interference.

Figure 5: An overturned and damaged vehicle suggests violent confrontations between protesters and security forces.

Washington is also increasing economic pressure. President Trump has announced 25% import tariffs on products from any country that does business with Iran. In a further sign of escalating risk, the U.S. State Department on Tuesday urged American citizens to leave Iran immediately, suggesting land routes through Turkey or Armenia.

In a span of just 10 days, the Trump administration captured the Venezuelan president, discussed annexing Greenland, and imposed 25% tariffs on anyone trading with Iran. While these actions seem disconnected, they share a common thread: a strategic U.S. pushback against China's dominance over the world's critical minerals.

These maneuvers are designed to challenge Beijing from multiple angles. Deposing Venezuela's Nicolas Maduro curbs Chinese access to oil and mining investments. Taking control of Greenland could lock rivals out of new Arctic trade routes and mineral resources. Sanctioning trade with Iran penalizes not only the regime but also its top oil customer, China.

The Core Rivalry: Countering China and Russia

According to Dan Alamariu, chief geopolitical strategist at Alpine Macro, the underlying motive is the strategic rivalry between the U.S., China, and, to a lesser extent, Russia. "The U.S. simply doesn't want either China or Russia – or Iran for that matter – operating out of Venezuela," he explained.

This strategy extends to the Arctic. The U.S. aims to counter Chinese economic influence in Greenland and Russian expansion in the region. Washington is determined to deny its rivals access to strategic locations and resources.

Greenland: The Arctic Frontier for Critical Minerals

As the Arctic ice sheet melts, Greenland has become a focal point for political and commercial interest. Guy Kioni, CEO of the consultancy Missang, noted that warming temperatures are making the island's vast deposits of critical minerals more accessible. These minerals are essential for everything from electric vehicles to aerospace and defense technology.

The melting ice is also opening up new Arctic shipping lanes, dubbed the "Polar Silk Road," attracting both China and Russia. The U.S. views control over Greenland as a way to secure these resources and trade routes for itself.

Targeting Energy to Weaken China's Mineral Monopoly

China currently holds a near-monopoly on rare earths, controlling 60% of global mining and over 90% of processing capacity, according to the International Energy Agency. This gives Beijing what Kioni calls an "untapped advantage."

However, processing rare earths is an energy-intensive industry. By targeting Venezuela and Iran—two key oil suppliers to China—the U.S. aims to constrain China's energy supply and, by extension, its mineral processing capabilities.

The U.S. could then use Venezuela's cheap oil, with up to 50 million barrels expected to flow to America, to develop its own processing facilities. Alamariu emphasized that building processing capacity is more critical for the U.S. than mining itself, stating, "To be a great power, a country needs to have cheap power."

Reshaping Alliances and Investments

The geopolitical maneuvering is also backed by significant financial pressure. The Trump administration is encouraging U.S. companies to invest $100 billion in Venezuela, a move that directly threatens the $4.8 billion that Chinese state-owned firms have invested there over the past two decades.

The U.S. is also building new mineral-focused alliances. It created a critical mineral framework with the Democratic Republic of the Congo in December and has signed similar deals with Australia and Malaysia. A similar agreement for Greenland could result from talks between Secretary of State Marco Rubio and Danish officials.

However, these aggressive tactics carry risks. The threat of using military force against a NATO ally over Greenland has rattled American partners. "What is the benefit of an ally that asks for parts of your territory?" Alamariu questioned, warning that such a move would "severely weaken U.S. global power" by alienating key allies.

An Emerging Bipolar World

Ultimately, these actions signal a shift toward an "emerging bipolar world" defined by the U.S.-China rivalry. Alamariu identified this competition as "the main thread" connecting Trump's policies on Venezuela, Greenland, and Iran.

While the U.S. seeks to counter Chinese influence, analysts believe it is not seeking direct conflict. Summits between Presidents Trump and Xi are still expected. However, escalating measures like the tariffs on Iran's trading partners could force China to choose between its ally and the American market, potentially derailing political dealmaking.

Laura D. Taylor-Kale, a senior fellow at the Council on Foreign Relations, suggested the tariffs might be a tactic to reduce Beijing's leverage in trade talks. She noted that developing independent mining and processing capabilities, either domestically or with allies, is a key part of this strategy, though she cautioned, "How long will it take? That's a different question."

Economic conflicts between major world powers now represent the single greatest risk facing the global community over the next two years, according to a major survey of experts conducted ahead of the annual Davos summit.

The World Economic Forum (WEF) polled 1,300 leaders from business, academia, and civil society, with "geoeconomic confrontation" emerging as the most pressing threat.

Short-Term Dangers: A Two-Year Outlook

The survey revealed a clear hierarchy of immediate concerns. Geoeconomic clashes were cited by 18% of all respondents as the top risk. This was followed by "state-based armed conflict," which ranked second at 14%, reflecting the ongoing war in Ukraine. Extreme weather events were identified as the third most common risk, chosen by 8% of those surveyed.

This warning follows a year defined by aggressive economic policies, including Donald Trump's tariff strategy and US military action in Venezuela, which the president stated was aimed at securing the nation's oil resources.

The use of economic sanctions has also become an increasingly prominent tool in international relations. A key example is the freezing of billions of dollars in Russian assets after the country's invasion of Ukraine.

Supply Chains as the New Battlefield

Concerns are also escalating over access to critical economic resources. Finance ministers from the G7 nations met in Washington on Monday to address how to diversify the supply of rare earth metals, which are essential for technology products and largely controlled by China.

US Treasury Secretary Scott Bessent, who convened the meeting, warned that supply chains for these critical minerals have become "highly concentrated and vulnerable to disruption and manipulation."

The Long-Term Threat: Climate Emergency Dominates

When the survey's horizon expands to 10 years, the nature of the risks shifts dramatically. Over the next decade, the most severe threats are all related to the climate emergency. The top risks identified were:

• Extreme weather events

• Biodiversity loss and ecosystem collapse

• Critical change to Earth systems

The WEF report notes that while environmental risks have a lower ranking in the two-year outlook, "the existential nature of environmental risks means they remain as the top priorities over the next decade."

High Stakes at the Davos Summit

Next week, thousands of senior figures—including more than 60 heads of state or government—will gather in the Swiss Alps for the annual Davos meeting to discuss the state of the global economy.

While this year's theme is "a spirit of dialogue," the event's most notable guest will be US President Donald Trump. His first year of his second term has been marked by a trade war and the reversal of global commitments, including the Paris climate agreement.

Other prominent political leaders scheduled to attend include German Chancellor Friedrich Merz, Chinese Vice-Premier He Lifeng, Ukrainian President Volodymyr Zelenskyy, and Argentine President Javier Milei. UK Chancellor Rachel Reeves and Business Secretary Peter Kyle will also be present.

In its annual global risks report, the WEF cautioned that "rules and institutions that have long underpinned stability are under siege in a new era in which trade, finance and technology are wielded as weapons of influence." This trend was recently highlighted when the world's central bankers issued a statement of solidarity with Federal Reserve Chair Jerome Powell, whose independence has been under attack from Trump over calls for faster interest rate cuts.

Oil prices retreated on Wednesday, ending a four-day winning streak as new supply from Venezuela and a surprise build in U.S. crude inventories weighed on the market. However, persistent fears of supply disruptions from ongoing civil unrest in Iran are keeping traders on edge.

Brent futures slipped 55 cents, or 0.84%, to trade at $64.92 a barrel by 0900 GMT. U.S. West Texas Intermediate (WTI) crude saw a similar decline, falling 52 cents, or 0.85%, to $60.63 a barrel.

According to Tamas Varga, an oil analyst at PVM, the market rally had been fueled by geopolitical anxiety. "But if that doesn't turn into actual supply or export disruption, people start to get disillusioned," he noted, adding that the U.S. inventory data provided an opportunity for traders to take profits.

US Crude Inventories Swell, Pressuring Prices

The American Petroleum Institute (API) reported on Tuesday that crude oil stockpiles in the United States, the world's largest oil consumer, increased significantly. The report, citing market sources, detailed the following changes for the week ending January 9:

• Crude Stocks: Rose by 5.23 million barrels

• Gasoline Inventories: Rose by 8.23 million barrels

• Distillate Inventories: Rose by 4.34 million barrels

This increase ran counter to expectations from a Reuters poll, which had forecast a drop in crude stockpiles. Official data from the U.S. Energy Information Administration is scheduled for release later on Wednesday.

Venezuela Resumes Oil Exports, Easing Supply Concerns

Adding to bearish sentiment, OPEC member Venezuela has started to reverse production cuts that were implemented under a U.S. embargo. According to three sources, the country is also resuming crude exports.

An oil tanker, the MT Bandra, is docked at Venezuela's El Palito terminal as the country prepares to resume exports.

On Monday, two supertankers departed Venezuelan waters, each carrying approximately 1.8 million barrels of crude. These shipments are believed to be the first in a 50-million-barrel supply agreement between Caracas and Washington, aimed at restarting exports after the U.S. capture of Venezuelan President Nicolas Maduro.

Iran Protests Add Geopolitical Risk to the Market

While rising supply from the Americas is pushing prices down, escalating protests in Iran are creating a powerful counterforce. The unrest has sparked fears of potential supply disruptions from the fourth-largest producer within OPEC.

U.S. President Donald Trump added to the tension on Tuesday, urging Iranians to continue their protests and promising that help was on the way, though he did not provide specifics.

Analysts at Citi said the situation in Iran introduces a significant geopolitical risk premium. "Protests in Iran risk tightening global oil balances through near-term supply losses, but mainly through rising geopolitical risk premium," the bank stated in a note. In response, Citi raised its three-month outlook for Brent to $70 a barrel.

However, the analysts also pointed out that the protests have so far not spread to Iran's primary oil-producing regions, which has limited the immediate impact on supply. "Current risks are skewed toward political and logistical frictions rather than direct outages, keeping the impact on Iranian crude supply and export flows contained," they concluded.

Source: Bloomberg Europe

Bitcoin surged past the $95,000 mark on January 13 after new U.S. inflation data reinforced expectations that the Federal Reserve could pivot to interest rate cuts later in 2026. The market move also prompted former President Donald Trump to publicly call on Fed Chair Jerome Powell to lower rates.

CPI Data Ignites Crypto Market Rally

The rally began after the Bureau of Labor Statistics reported that the Consumer Price Index (CPI) held steady, creating a favorable outlook for risk assets.

Key figures from the December report include:

• Monthly CPI: Rose by 0.3%

• Annual CPI: Held steady at 2.7%

• Core CPI (monthly): Increased by 0.2% (excluding food and energy)

• Core CPI (annual): Rose by 2.6%

In response to the data, Bitcoin's price climbed to $95,222. The broader cryptocurrency market capitalization grew by approximately $27 billion, reaching a total of about $3.12 trillion.

Trump Demands 'Meaningful' Rate Cuts

Shortly after the inflation numbers were released, Donald Trump posted on his Truth Social platform, weighing in on Federal Reserve policy.

"Great (LOW!) Inflation numbers for the USA," he wrote. "That means that Jerome 'Too Late' Powell should cut interest rates, MEANINGFULLY!!!"

Why Inflation Now Dictates Bitcoin's Trajectory

The latest inflation data suggests that price pressures in the U.S. economy have stabilized near the Federal Reserve's long-term target. This stability could provide policymakers with the flexibility to ease monetary policy and cut interest rates if economic growth begins to slow.

While the headline number was stable, underlying data showed that shelter costs were the largest contributor to the monthly inflation increase, rising 0.4% in December and 3.2% year-over-year. Inflation in services also continued to outpace that of goods, signaling persistent pressures from wages and rent.

As institutional investors have gained exposure through ETFs and derivatives, Bitcoin has become increasingly sensitive to U.S. inflation readings. Stable inflation near the Fed's target often allows bond yields to fall, making risk assets like Bitcoin more attractive to capital.