The Latest: Trump faces new inflation warning from bond market, adding to midterm challenges

The energy price spike triggered by the Iran war has seeped into the price of bonds that help fund the U.S. government, causing interest rates to climb in ways that are worsening affordability pressures, hampering economic growth and creating a new risk for Republicans in November’s midterm elections.

Also, the United States said Monday that it bombed radar and drone sites in Iran after Tehran shot down an American drone over the weekend. Iran then said it launched a strike of its own, and Kuwait reported incoming fire.

The nominal ceasefire between Iran and the U.S. has been repeatedly tested with such back-and-forth attacks, even as officials from both countries try to negotiate an end to the war.

Here’s the latest:

Jerome Powell uses JFK award speech to warn against political pressure on Fed, courts and schools

Former Federal Reserve Chair Jerome Powell used one of his first major public appearances since leaving office to defend independent institutions while accepting an award Sunday honoring his efforts to preserve the central bank’s independence.

Speaking at the John F. Kennedy Presidential Library overlooking Boston Harbor, Powell called universities, courts, Congress and the central bank “the foundation and the embodiment of our democracy” and argued that the Fed’s independence was a “priceless asset” that must be protected.

It was one of his most direct defenses of Fed independence, warning that a single administration’s decision to remove bank officials over policy differences would open the way for future elected officials to follow suit, ultimately undermining the credibility that the Fed has spent decades building.

Powell, who frequently clashed with Trump during his eight years as chair, stepped down as his term expired in May. He was succeeded by Kevin Warsh, whom Trump selected to lead the central bank.

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Trump vents about judge who blocked the Kennedy Center renovation and fumes over his legal setbacks

Trump on Saturday branded the federal judge who blocked his renovation of the Kennedy Center as “an anti Trump Hater” and predicted that the nation’s premier performing arts center, which he wanted to shutter for a two-year overhaul, will “soon be closed, probably never to open again.”

In a lengthy post on his Truth Social platform, Trump fumed about the Friday decision from U.S. District Judge Christopher Cooper, who also ordered Trump’s name removed from the center. Clearly angered by his latest legal setback, he said it was “impossible for me to be treated fairly,” tying Cooper’s ruling to earlier losses, including the Supreme Court’s rejection in February of his sweeping tariffs.

His post aimed to make the case for the project even as he says he’s giving up on it. Hours after Cooper’s decision, Trump said he was backing away from the renovations and making arrangements to relinquish control to Congress of what, until the Republican president’s second term, had been known as the John F. Kennedy Center for the Performing Arts.

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Trump set to headline ‘Great American State Fair’ for nation’s 250th anniversary after artists drop out

An upcoming celebration of America’s 250th anniversary, “The Great American State Fair,” recently had several musical guests back out partly over the event’s ties to President Trump. Now, Trump himself is slated to headline the festivities, the organizers said Saturday.

“I understand Artists are getting ‘the yips’ having to do with their performance,” Trump posted to his social media platform Truth Social Saturday, adding that he was thinking of bringing “the man who some say is the Greatest President in History (THE GOAT!), DONALD J. TRUMP, to take the place of these highly paid, Third Rate ‘Artists.’”

The group organizing the June fair on Washington’s National Mall, Freedom 250, confirmed the billing in a statement, writing, “We are excited to announce that President Trump will personally kick off this historic celebration on Wednesday, June 24.”

Freedom 250 is billed as nonpartisan, but was launched last year by Trump and is led by a former State Department appointee from Trump’s first term. Several artists, including Bret Michaels, the Commodores and Martina McBride dropped out last week.

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US bombs Iranian military sites and Kuwait is hit by drone and missile fire

The United States said Monday that it bombed radar and drone sites in Iran after Tehran shot down an American drone over the weekend. Iran then said it launched a strike of its own, and Kuwait reported incoming fire.

The nominal ceasefire between Iran and the U.S. has been repeatedly tested with such back-and-forth attacks, even as officials from both countries try to negotiate an end to the war. It’s not clear how close they are to a deal — and there is always the risk that an attack could derail those talks.

In the meantime, Iran has maintained its chokehold on the Strait of Hormuz, disrupting global energy supplies and driving up the price of fuel around the world, with far-reaching consequences.

Fighting has also escalated between Israel and the Lebanese militant group Hezbollah, despite their nominal ceasefire. Israel has extended its occupation deep into Lebanon, and Hezbollah — which joined the war in support of its main backer, Iran — continues to launch drones into Israel.

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Trump is facing a new inflation warning from the bond market, adding to his midterm challenges

The world is getting more uptight about lending money to President Donald Trump’s government — causing interest rates to climb in ways that are worsening affordability pressures, hampering economic growth and creating a new risk for Republicans in November’s midterm elections.

The energy price spike triggered by the Iran war has seeped into the price of bonds that help fund the U.S. government. Interest rates on a 10-year U.S. Treasury note are topping 4.44%, up from 3.95% before the war started at the end of February. Average mortgage rates have climbed to their highest levels in nine months, while auto sales are slumping.

The challenge is global in scale, as interest rates have risen for multiple countries as the world has been adjusting to the prospect of higher inflation, mounting questions about the sustainability of government debt and a dramatic surge in investment in artificial intelligence.

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Related: Trump plans to appeal order allowing all importers that paid struck-down tariffs to seek refunds