The Wrap: War in the Gulf, Warsh Stands Pat, Democrats Seethe
- 19 minutes ago
- 6 min read
This week in “The Wrap,” we feature the top events in Washington and on Wall Street over the past week. And please watch “The Wrap with Chris Whalen” on The Julia LaRoche Show every Saturday on YouTube to catch our discussion of what’s hot and what’s not in the world of finance and investing.
July 10, 2026 | Over the July 4th weekend, we updated the WGA Precious Metals Top 25 list and added a new security, Bunker Hill Mining Corp. (BHLL). BHLL was incorporated in 2007, is headquartered in Vancouver, Canada and is undergoing an active restart under new management.
Discovered in 1885 in Idaho's Silver Valley, the Bunker Hill Mine quickly grew into one of the largest lead, zinc, and silver producers in the US. Operations thrived for nearly a century until environmental disasters, labor conflicts and management failures forced its closure in the 1980s. We’ll be writing further about the new incarnation of BHLL in coming issues of The IRA.
As we predicted, the fragile ceasefire between the US and Iran ended this week. “U.S. Central Command said Tuesday that it launched a ‘series of powerful strikes’ on Iran in response to Iranian attacks on three commercial vessels in the Strait of Hormuz,” CBS reports.
“CENTCOM said the operation targeted air defenses, radar sites and anti-ship missile sites, as well as dozens of small boats used by Iran's Revolutionary Guard.” In addition to the strikes, the U.S. has revoked sanctions waivers that allowed for the sale of Iranian oil.
Democrat Graham Platner withdrew his bid for the Senate race in Maine amid allegations of sexual assault by a former girlfriend as the November midterms approach. The scandal has rocked the Maine Senate race, which is seen as necessary to win a Senate majority for the Democrats.
Jonathan McKernan, a top Treasury Department official who has been a central player in the Trump administration’s push to ease regulation on Wall Street, is expected to step down next week, according to published sources. His exit comes only nine months after being confirmed by the Senate as under secretary for domestic finance. McKernan had been on the board of the FDIC before going to Treasury.
Mark Halperin’s latest midterm election analysis indicates that while Democrats are well-positioned to potentially retake the House of Representatives, they face a steep uphill battle in keeping or taking the Senate majority. He points to underlying vulnerabilities for both parties driven by historical trends, candidate recruitment, and the political environment. But inflation (aka "affordability") is still the single biggest political issue in 2026.
Oil prices fell after the announcement of a truce between the US and IRA, but over the past 6 months, U.S. diesel prices have risen significantly. This key fuel has risen from around $3.50 per gallon in January 2026 to roughly $4.57 per gallon. This represents an increase of over $1 per gallon or roughly 30%, heavily driven by global shipping disruptions and geopolitical tensions. Is that double digit inflation? Note that oil fell to $20 per barrel during COVID in 2020.
Meanwhile, the Federal Open Market Committee said in the most recent minutes that they view the AI infrastructure buildout as an upward driver of inflation. Officials noted that the intense demand for computing power and data centers puts pressure on prices for technology products and electricity, which could force the central bank to raise interest rates. The demand for technology is also a huge driver of silver prices.
No surprisingly, consumer expectations regarding inflation are also rising. The Federal Reserve Bank of New York said Tuesday that its measure of consumer expectations for inflation one year from now rose to 3.7%, the highest in nearly three years. Consumer expectations for inflation in three years rose to 3.3%, a four-year high. And LT interest rates continue to climb of inflation expectations and growing market turmoil.
Source: dataQollab
Source: dataQollab
While the financial markets and media are obsessed with large cap AI stocks, some of the best performing stocks over the past week were in pharmaceuticals. Lianhe Sowell International Group (LHSW), Crinetics Pharmaceuticals (CRNX), Tvardi Therapeutics (TVRD), ClearOne (CLRO) and Biolabs Group Limited (VRAX) were all noted in the financial media as gaining double or triple digits.
AI stocks experienced heavy volatility and a broad sell-off over the past five trading days. While some shares briefly rebounded, many major tech giants and semiconductor firms posted notable losses on growing investor skepticism about the real returns on massive AI infrastructure investments. Advanced Micro Devices (AMD) saw its stock price drop by over 10%, while Broadcom (AVGO) and Micron Technology (MU) both fell by over 5%.
Our friend Fred Ramberg (“Fred Ramberg on AI, Agentic Trading and the Necessary Past”) noted in an email this week that MU has been on a wild ride. Does the chart below suggest any stock price appreciation?
Source: YahooFinance (07/09/26)
“Done right (the AI agent way),” he avers, “you would have made 60% in 30 days…….things that make you go hmmm.” Fred adds that you could make a lot more with appropriate options strategies.
Since no one in Washington cries foul about the way stocks like MU are trading, Fred’s pondering the creation of a “following agent.” If you can’t beat em, join em, right?
Over the past five trading days, gold and silver traded in a volatile pattern, primarily reacting to shifting perceptions of Middle East tensions and equally fickle views on Federal Reserve interest rate expectations. There is said to be a split in the FOMC on raising interest rates, at least until the White House starts replacing Reserve Bank Presidents, starting in Atlanta. We predicted just this eventuality a year ago. Stay tuned.
“A lot of people are talking about one rate increase. The committee does not generally do that. I mean, what’s the point of that?” former St. Louis Fed President Jim Bullard told CNBC. But we suspect that the White House has already signalled to Warsh that one hike is acceptable if there is no follow-on action this year.
Truth is, nobody knows what is gonna happen next week in Washington with Donald Trump in the White House. But if the Democrats take the House in November, then Donald Trump will definitely be impeached for a long list of crimes, misdemeanors and acts of sheer stupidity.
As a Democratic House proceeds with impeachment of President Trump, you can be sure that investigations of Trump loyalists like FHFA Director Bill Pulte and Commerce Secretary Howard Lutnick will figure prominently.
Senator Chris Murphy (D-CT) has already highlighted some of the most egregious instances of Trump, his family, and members of his administration using their positions of power to enrich themselves and do favors for their billionaire buddies at the expense of American taxpayers. Murphy has written a script for a Democratic House to use in impeaching President Trump.
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