Recommended Weekend Reads
Mexico’s Oil Giant is at a Crossroads, Can Iran Rebuild its Nuclear Program, and Just How Desperate is their Leadership?, Why US House Prices Stayed Resilient Versus the Rest of the World, and America’s Population Crash
August 8 - 11, 2025
Below are a number of reports and articles we read this past week and found particularly interesting. Hopefully, you will find them of interest and useful as well. Have a great weekend.
The Americas
Pemex Is at a Crossroads Americas Quarterly
Mexico’s government announced a deal to support the deteriorating finances of the state-owned oil company, Petróleos Mexicanos SA (Pemex). By issuing instruments called pre-capitalized notes, the Sheinbaum administration hopes to stabilize the financial performance of a company that has been reporting losses for at least the last 10 years. However, Pemex is besieged not only by mounting financial liabilities but also by a series of issues that compromise its future and, to some extent, its current operations.
Assessing the Impact of China-Russia Coordination in the Media and Information Space Ryan Berg/Center for Strategic and International Studies
Since the announcement between Presidents Vladimir Putin and Xi Jinping of a “no limits partnership” on the eve of Russia’s 2022 invasion of Ukraine, concerns have swirled over the potential for a new axis of revisionist authoritarian powers. Spearheaded by Moscow and Beijing, such an alliance could not only threaten the Eurasian landmass but reach across oceans to challenge the United States in the Western Hemisphere. However, the full implications and scope of the China-Russia partnership, particularly as it may pertain to Latin America and the Caribbean (LAC). The CSIS Americas Program designed a novel tabletop exercise to better understand the consequences. The findings found that when given the opportunity to coordinate, China and Russia eagerly did so and were able to secure a favorable outcome to the initial crisis. However, on the subsequent game turn, the United States, which had invested in building more long-term influence in the region, nevertheless secured its preferred policy outcome in both iterations of the game This suggests that U.S. influence in LAC appears to remain sizeable, but closer China-Russia cooperation should be accorded more gravity than it currently receives in policy discussions.
Iran’s Future
Damage to Iran’s Nuclear Program—Can It Rebuild? The Center for Strategic and International Studies
In the immediate aftermath of the U.S. strikes on Iran’s nuclear facilities on June 22, “Operation Midnight Hammer,” policymakers and experts launched into a heated debate not only about the physical damage of the strikes but also about their impact on Iran’s long-term nuclear ambitions. Recent satellite imagery allows us to have a more realistic picture of the extent of the damage from the Israeli and U.S. strikes. It also provides insights into Iran’s initial efforts to rebuild its nuclear program and can help identify potential pathways for developing a covert nuclear weapons program, including establishing a third site to process its existing stockpile of 400 kilograms (kg) of highly enriched uranium (HEU). We determined that the U.S. and Israeli strikes inflicted significant damage on Iran’s nuclear program by destroying key infrastructure and human capital. Israel’s broader campaign against Iran also targeted military leaders, Iranian missiles, and defense industrial base targets. The precision of these operations revealed a deep penetration of intelligence, particularly by Mossad, into Iran’s nuclear program. The strikes did not, however, completely eliminate the nuclear program, with some infrastructure remaining intact, and the status of the HEU stockpile remains unknown. But whether or not Iran rebuilds its nuclear program is ultimately a political decision and will depend on three sets of factors: decision-making in Tehran, diplomacy with the United States, and Israel.
Iran’s Dangerous Desperation: What Comes After the 12-Day War Suzanne Maloney/Foreign Affairs
As the writer James Baldwin once remarked, “The most dangerous creation of any society is the man who has nothing to lose.” That description might now apply to the men who preside over the ruins of Iran’s revolutionary system. With their proxy network degraded, their air defenses demolished, and their great-power alignments exposed as hollow, the debilitated guardians of the Islamic Republic require new tools to keep the wolves at bay. It is difficult to predict with confidence how factional dynamics will evolve in the aftermath of the regime’s humbling; further surprises may be in store. But there can be little doubt that the most powerful set of players in Tehran will seek to reconstitute the remnants of its nuclear program and reassert the regime’s dominance over Iranian society.
U.S. Economics and Demographic Changes
Why U.S. House Prices Stayed Resilient While Prices Fell in Other Countries Federal Reserve Bank of St. Louis
Following decades of low and stable inflation, the period from 2021 to 2024 marked a dramatic global surge in inflation and an unprecedented cycle of monetary tightening. This recent monetary tightening cycle created a puzzle: Why did housing markets across developed countries respond so differently to the same global pressures? For example, during the 2020-21 expansion, the U.S. and Canada experienced house price appreciation of more than 25% while Sweden recorded increases approximately half as large. (See the first figure.) But when central banks began aggressive tightening in 2022, a striking divergence emerged. The U.S. housing market showed remarkable resilience, with only moderate price adjustments despite Federal Reserve rate hikes that pushed mortgage rates from 2.8% to 6.8%. In stark contrast, Sweden and Canada experienced sharp corrections, with Swedish prices falling substantially below their 2019 baseline levels.
Sprinters, Marathoners & Skeptics on the Future of AI & Power War on the Rocks
Will AI eat the world and America’s defense budget? I think of those who toil at the intersection of AI and national security as being divided into three camps: Sprinters hold the most aggressive assumptions and believe profound disruption via artificial general intelligence is imminent; marathoners believe the technology will diffuse selectively, sector-by-sector; and skeptics draw analogies to the dot-com bubble. America’s near-term AI strategy should align with one of these three approaches. If the sprinter scenario holds, the United States should go all-out to rapidly acquire artificial general intelligence — defined here as human-level intelligence. If the skeptics are right, however, then the United States should do virtually the opposite and avoid overbuilding and overextension. If the marathoners are most correct, then the United States will conduct a complicated, long-term technological competition with a country four times its population.
Consumer Inflation Expectations Across Surveys and over Time Federal Reserve Bank of Cleveland
Different survey-based measures of consumer inflation expectations have diverged in recent months. This Economic Commentary compares these measures and the survey questions underlying them. Our analysis suggests that the divergences across survey-based measures of inflation expectations can be attributed to various features and sample characteristics specific to each survey.
Changes in Milestones of Adulthood U.S. Census Bureau
ABSTRACT: This study uses nationally representative data from 2005 and 2023 to examine changes in young adults’ (ages 25-34 years old) experiences reaching five milestones of adulthood: living away from their parents, completing their education, labor force participation, marrying, and living with a child. Changes are considered for individual milestones, as well as for combinations of milestones. The types and combinations of milestones young adults experience have seen major shifts in the past several decades, with growth in the shares experiencing economic markers, and reductions in those who experience family formation events. between 2005 and 2023, the fraction of Americans aged 25–34 who completed their education rose from 74% to 83%, but the percentage of “ever married” fell from 62% to 44%, and the percentage with “a child in the household” fell from 55% to 39%.
America’s Fertility Crash Reaches A New Low The Economist
In recent years, birth rates have dropped only slightly in places where they have long been low. Four of the five least fertile states in 2014, including Connecticut and Massachusetts, have seen their rates decrease by less than the national average. It is in states that have been historically the most fertile where the fall has been precipitous; Alaska, North Dakota and Utah have seen some of the steepest declines. All told, states that had above average fertility rates in 2014 are responsible for more than 80% of the collapse in American birth rates over the past decade.
As US population growth slows, we need to reset expectations for economic data Peterson Institute for International Economics
US population growth has slowed sharply in the last year and a half, as the immigration surge of the early 2020s has ended and the population continues to age. Fewer jobs are needed to keep up with the growth of the labor force, and growth rates of output and consumption will fall even if per capita output and consumption hold steady. The total US population is growing at an annualized rate of 0.5 percent, down from 1 percent in late 2023. With slower population growth, any given level of monthly payroll growth, consumption growth, or output growth reflects a stronger economy than it did a year ago. Population growth is not only slowing; it has also become more volatile and harder to estimate. It is likely that current population estimates for 2025 that statistical agencies are incorporating into economic data are too high and will be revised downward; current population estimates imply much higher immigration in 2025 than is likely under current administration policy. Economic data will need to be reinterpreted and revised in line with future adjustments to population estimates.