A new analysis from the US Congressional Budget Office indicates that the first five months of military action against Iran have generated approximately $38 billion in direct expenses for American taxpayers, with projections suggesting the conflict could add half a percentage point to inflation by early next year.
The CBO outlined these figures in a correspondence to Representative Brendan Boyle of Pennsylvania, the leading Democrat on the House Budget Committee. The total encompasses expenditures for replenishing munitions, replacing equipment lost in combat, increased flight operations, and elevated fuel costs. This assessment closely mirrors the $37.5 billion estimate Defense Secretary Hegseth provided during his July testimony before Congress. According to the CBO, each additional month of hostilities is expected to cost at least $2 to $3 billion more, with the potential for significantly higher monthly expenses if the conflict escalates further. The report also delivers the government's first formal estimate of the war's impact on inflation, projecting that a key Federal Reserve inflation metric could run 0.5 percentage points higher than February forecasts by early 2027, largely due to disruptions in oil and gas transportation through the Strait of Hormuz.
Canadian Prime Minister Mark Carney is broadening the scope of a major investment tax credit program, extending accelerated depreciation benefits to include oil and gas pipelines and mining assets. Carney announced this fiscal measure during an investment summit held in Toronto, where dozens of companies gathered at the Four Seasons Hotel to explore opportunities in Canada's natural resources and manufacturing sectors. Under the revised regulations, a significant portion of capital expenditures for many of these projects will now be eligible for immediate expensing. This adjustment represents one of the most substantial overhauls to corporate investment tax treatment in decades and is expected to considerably reduce income tax burdens for numerous companies.
NVIDIA Chief Executive Jensen Huang stated on Tuesday that new government regulations are unnecessary for artificial intelligence safety, arguing that market dynamics will naturally incentivize companies to prioritize security while pursuing innovation. Speaking at a Salesforce event, Huang emphasized that the AI industry doesn't require any additional legislation or oversight. He pushed back against the notion that AI development forces a choice between safety and speed of progress. During a conversation with Salesforce CEO Marc Benioff, Huang asserted that both objectives can be achieved simultaneously, noting that companies can regulate their development pace until they have confidence in launching products that gain market acceptance, with market forces playing a mediating role throughout the process.
OpenAI has initiated collaborative efforts with its primary competitors Anthropic and Google DeepMind to address AI safety concerns. This cooperation comes as the industry intensifies its response to growing worries about the technology's potential economic and security implications. Chris Lehane, OpenAI's head of global policy, revealed that discussions with Anthropic and Google have been ongoing for several weeks. He further indicated that OpenAI believes the three AI companies can coordinate on safety matters without requiring antitrust exemptions, emphasizing that prioritizing collaborative efforts and safety is the preferable approach. Lehane made these remarks during a briefing in Washington.
Treasury Secretary Scott Bessent characterized the US financial commitment to the coordinated intervention supporting the Japanese yen as "insignificant," while noting the operation yielded tens of millions in profits and served American interests. During testimony before the House Financial Services Committee, Bessent explained that a stronger yen benefits US exports and that yen appreciation means the Japanese government doesn't need to sell American assets to finance its intervention efforts. He stated that the minimal US expenditure allowed Washington to signal support for Japan's policy direction. Analysts tracking Treasury activities estimate the department deployed less than $1 billion in the yen intervention, a stark contrast to Japan's record-breaking $96.4 billion spent from late July through August.
Bipartisan efforts to advance a landmark digital asset market structure bill were blocked in the US Senate during a procedural vote on Tuesday. Democratic lawmakers raised concerns about ethics provisions related to handling the President's cryptocurrency business interests. The legislation, which sought to grant the Commodity Futures Trading Commission primary regulatory authority over the digital asset industry, required 60 votes to proceed to the next stage but fell short. The failed vote represents a significant setback for the cryptocurrency sector, which has invested hundreds of millions of dollars over years of lobbying efforts to secure favorable and stable regulatory rules from Congress. With midterm elections less than two months away, the timing proves particularly challenging. Bitcoin extended its decline following the vote, dropping as much as 5.3% to $74,910, while Ethereum also fell over 8.3%, with smaller tokens experiencing even sharper losses. Both Bitcoin and Ethereum reached their lowest price levels since June.