Happy Tuesday and welcome back to White House watch. In this edition, we’ll be looking at:

• Trump’s move back towards escalation with Iran

• Waller sounding the alarm over possible rate increases

• The void left by Lindsey Graham

Donald Trump has been wavering between escalation and negotiation almost from the very beginning of the US conflict with Iran back in February. But after the pendulum swung hard towards a diplomatic solution last month — with the signing of a “memorandum of understanding” with Iran by the US president in the ornate halls of Versailles, it is now moving rapidly in the other direction.

Not only did Trump launch another round of military strikes against targets in Iran on Monday night and promise to do the same on Tuesday, but he also reinstated the naval blockade on Iranian ports that was lifted after the MoU as he notified Congress of the resumption of the military conflict.

He also vowed to impose a 20 per cent toll on passage through the waterway after top officials including Marco Rubio, the secretary of state, insisted such fees would be a violation of international law. Trump posted on Truth Social: “The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT.’”

Trump then lashed out at Iran’s leadership for being “a little cuckoo”.
“They basically break the deals,” Trump said, adding: “They are extremely unreliable people, and frankly, if they ever had a nuclear weapon, they’d use it within one day,” he told conservative radio host Hugh Hewitt.

The risks for Trump are significant. Politically the war is unpopular and extending its duration could be very troublesome for Republicans in battleground districts and states ahead of the midterm elections. Economically, the persistence of high energy costs — including petrol — will continue to hang over Republican efforts to defend their control of Congress. But he cannot seem to find a way out, and now he is making another unlikely bet that the use of American military force will bring Tehran into submission.

• Christopher Waller, a senior Federal Reserve official, has warned that the Fed might have to raise interest rates soon if inflation comes in too high.

• For swing-state Republican candidates, attending a Trump rally is a political gamble.

• Democratic states including California and New York have filed an antitrust lawsuit to block Paramount Skydance’s $110bn acquisition of Warner Bros Discovery.

• The spilling over of partisan divisions at the once collegial US Supreme Court could have profound consequences for public support of the institution.

Lindsey Graham’s sudden death over the weekend is reverberating across Washington, as Congress has lost one of its most outspoken and influential foreign-policy hawks, and Donald Trump has been deprived of one of his top allies on Capitol Hill.

On Monday, with Trump’s support, South Carolina governor Henry McMaster announced that Graham’s younger sister Darline Graham Nordone, whom he raised after the death of their parents, would take his seat in the upper chamber — at least for now.

But the broader ramifications of Graham’s death will be significant. On everything from Iran to Ukraine and Nato, the late South Carolina politician was a bridge between Trump’s Maga isolationist worldview and the more hawkish traditional Republican foreign policy stance. Graham used that position to great effect, corralling Trump to the conclusion that the US should join Israel in going to war with Iran, but also to take a more favourable turn towards Ukraine in recent months.

Graham was often heavily critical of America’s allies in Europe, but he believed fundamentally that they were a source of geopolitical strength and power, rather than a burden, for Washington. This helped counter the influence of figures inside the administration such as vice-president JD Vance, and outside voices such as Tucker Carlson, who questioned the value of America’s alliances much more profoundly. Who, if anyone, fills the void left by Graham’s death in that role remains to be seen.

• Democrats are still odds-on to regain the House of Representatives in November but they risk missing an open goal, writes Edward Luce.

• Trump’s plan to conquer Europe’s political culture is collapsing, says Gideon Rachman.

• Jemima Kelly explores how Hunter Biden found his voice after his father left the presidency.

• Why US quantum computing should be nationalised — UCLA’s Prineha Narang makes the case.

• Are we heading for a three-way nuclear arms race? The FT Editorial Board weighs in.

• The “Trump accounts” have spurred a new debate on how to tackle America’s wealth gap, writes Rana Foroohar.