Middle East Tensions, Fed Rate Hike: September 18, 2026

1. ISRAEL SAYS IT WILL TOPPLE IRAN'S GOVERNMENT. Israeli Prime Minister Benjamin Netanyahu said on September 18 that Israel will topple Iran's government, eliminate Hamas and continue its campaign against Hezbollah. The statement came as US President Donald Trump said Washington is nearing a "fateful decision" on Iran and is satisfied with the naval blockade preventing Tehran from exporting oil. Despite the tension, Washington approved high-level Iranian visas for the UN General Assembly in New York.

2. IRAN EXPELS SWEDISH DIPLOMAT. Tehran ordered a Swedish diplomat to leave within 48 hours in response to Stockholm's expulsion of an official at the Iranian embassy; Iran also summoned German Ambassador Axel Dittmann over Berlin's "inappropriate" positions and alleged interference in internal affairs. Russia voted against extending the UN Panel of Experts monitoring Iran sanctions, rejecting its legal basis. The diplomatic moves show widening Iran-Europe friction alongside the nuclear file.

3. US MEETS HOUTHIS IN OMAN. According to VOV, US officials secretly met Houthi representatives at the US Embassy in Muscat; the Houthis said they would not attack US ships and would keep the 2025 ceasefire with Washington, but gave no such commitment regarding Saudi vessels. The same day, Saudi Arabia intercepted a Houthi drone over Taif; falling debris killed one Yemeni and injured a Saudi and a Pakistani. More than 40 people died in clashes near the Bab al-Mandab Strait. The US also approved a potential F-35 sale to Saudi Arabia worth up to USD 24.3 billion.

4. US HOUSE PASSES NEW SANCTIONS BILL. The House passed the "Graham Sanctions Act 2026" against Russia and Iran by 262-159, after the Senate passed it 86-11 in August; the law allows tariffs up to 100% on countries buying large volumes of Russian oil and gas and expands financial sanctions on Iran. The Kremlin called the bill an unfriendly act. President Trump threatened heavy tariffs or a partial halt of trade with the EU if it admits Canada as its first "associate member"; Canada formally applied to join the UK-led Joint Expeditionary Force. Russia said it struck Ukraine's largest military data center; around 200 commercial ships bound for the Black Sea have been attacked by drones or missiles in four months.

5. FED RAISES RATES FOR FIRST TIME SINCE 2023. The US Federal Reserve raised its benchmark rate by 0.25 percentage point to 3.75-4.00%, with all 12 FOMC members in favor; Chair Kevin Warsh signaled another hike was possible before year-end, citing August inflation at 3.4%. This unexpected shift from the previous hold phase may pressure global capital flows and exchange rates.

6. NORTH KOREA CALLS NUCLEAR STATUS ABSOLUTE. Kim Yo Jong declared the DPRK's nuclear status "absolute" and "irreversible", dismissing international denuclearization calls during the IAEA General Conference. In South Korea, former President Yoon Suk-yeol was indicted on anti-graft charges over a luxury bag scandal involving his wife Kim Keon-hee. Japan's Prime Minister Sanae Takaichi reshuffled her cabinet for the first time since October 2025, retaining most key ministers and adding a newcomer from the Japan Innovation Party.

7. ARGENTINA PROPOSES 20-YEAR PRISON TERM. President Javier Milei sent Congress a bill imposing up to 20 years in prison for exploiting natural resources in the Falkland Islands. In Mexico, authorities arrested Victor Alfonso Martinez Barraza, 26, alias El Ciego, suspected of murders and links to the Sinaloa cartel's Los Rusos. In markets, the Nasdaq rose 1.69% and the S&P 500 rose 1.14%; Nvidia's CEO said the company's chip sales will double next year; LME three-month copper rose 1.6% to USD 14,464 per tonne.

TODAY'S KEY DEVELOPMENT: High-level UN General Assembly session in New York, where the US has issued visas for Iran's delegation and US-Iran tensions may produce new signals.

*Information is compiled from multiple sources for reference and reflects information available at the time of publication.*