Poll after poll has shown that the overwhelming majority of Americans reject direct US military involvement in Ukraine – such as sending troops or other actions which could constitute the start of direct conflict with nuclear-armed Russia.

The reality also remains that most Americans can’t find Donetsk, Kherson, Luhansk and Zaporizhzhia on a map. Does the American public really want to constantly poke the Russian bear over places they can barely pronounce? Do they really care who owns the Donbass? “Where!?…” – your average Joe sixpack is likely asking.

Why then, Mr. Trump, are you actually contemplating giving Zelensky, who you once dubbed the ‘greatest salesman on Earth’, America’s own vital long-range Tomahawk missiles?

Why are you indulging yet a fourth in-person meeting with Zelensky (and specifically his third trip to the Oval Office) since you took office in January? Where is the pressure on Zelensky to cede territory and rapidly end this bloody and tragic war? Where are the loud assurances of no more NATO expansion to Russia’s border?

Why can’t the Ukrainian government, which has already received billions in US taxpayer funds, so much as admit that it has lost Crimea forever? Even this smallest of admissions and concessions would be a big something offered on the path to peace. And yet Kiev remains vocally against ever ceding Crimea, despite the obviously impossibility of ever getting it back (and absolutely everyone knows this).

Instead of any semblance of the ability to make compromise, even though it’s obvious to pretty much all that Ukraine’s military has been steadily losing a ‘war of attrition’, Zelensky is busy meeting with Raytheon executives before walking into the White House on Friday morning. 

This is all part of the pressure and pitch to persuade Trump to give Ukraine the sought after long-range missiles capable of reaching all main population centers in Russia.

“We discussed Raytheon’s production capabilities, possible ways of our co-operation to strengthen air defence and increase Ukraine’s long-range capabilities, and the prospects for Ukrainian-American production,” Zelensky posted on Telegram early Friday.

Even mainstream, generally anti-Kremlin outlets like the BBC understand that this would open up a new phase in the war, where powerful American weapons are directly raining down on Russian cities:

We’ve been reporting that the possibility of the US sending Tomahawk missiles to Ukraine is causing “extreme concern” in the Kremlin. That’s because these missiles could drastically increase Ukraine’s range capabilities.

As the map below shows, Tomahawks can strike objects up to 1,600km (995 miles) away – putting dozens of Russian military bases, air defense sites and command centers in the range of fire.

There’s also been much reporting saying that American contractors and personnel would have to themselves man the systems or oversee them, which is yet more ‘boots on the ground’ mission creep which Trump had earlier vowed to resist.

I met with representatives of the defense company Raytheon, which produces, in particular, Patriot systems.

I told them about the battlefield situation and Russia’s intensified attacks on our people and civilian infrastructure.

We discussed Raytheon’s production capacity,… pic.twitter.com/w5DgX3BkF2

— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) October 17, 2025

Again, will Washington risk WW3… all in the name of ‘leverage’ against Putin… while bowing down to yet another Zelensky demand – this time in the form of missiles that can reach 1,000 miles inside Russia? If roles were reversed, and a foreign entity were on our doorstep launching long-range missiles into the United States, we would without doubt immediately go to war and be put on nuclear alert.

Why risk all of this… again, for the question of who owns tiny Ukrainian oblasts halfway across the globe which most Americans could in reality care less about?

There’s still hope that rational minds will prevail at the White House, based at least on some of Trump’s sarcasm on display last night…

Trump:

I said to Putin: “would you mind if I gave a couple of thousand Tomahawks to your opposition? “

He didn’t like the idea. pic.twitter.com/upTnoOqvDW

— Clash Report (@clashreport) October 16, 2025

Below, a ZeroHedge reader and top commenter submitted this astute observation on the likely true state of things vis-a-vis Washington and Europe in the context of the Ukraine crisis.

* * *

The “Democracy vs. Autocracy” myth died in Ukraine’s trenches. What replaced it is far darker: the engineered deconstruction of Europe itself. Cheap Russian energy was severed (via Nord Stream sabotage), not to help Ukraine win — but to break Europe’s economic spine. Weapons stockpiles were drained into a black hole, and now the continent is left dependent on overpriced U.S. arms, powerless to forge its own peace.

NATO’s eastern expansion was never about defense — it was about destabilizing Russia and locking Europe into vassal status. Now, as Ukraine bleeds dry, the Empire smiles: the real target was never Moscow, but Brussels, Berlin, and Paris. This isn’t a blunder. It’s a controlled demolition.

Authored by Charles Hugh Smith via OfTwoMinds blog,

GDP is like collecting data on passenger satisfaction with the dessert cart on the Titanic and declaring everyone is delighted as the great “unsinkable” ship settles into the icy waters of the Atlantic.

That Gross Domestic Product (GDP) is an outdated and misleading metric of the economy is widely accepted. The problem isn’t an abstraction, as we manage what we measure and so policymakers and citizens alike make decisions on what’s being measured. If what’s being measured is misleading, then we’re flying blind.

Economist Joseph Stiglitz has long advocated for an overhaul for what we measure economically, focusing on well-being rather than adding up transactions. A new book The Measure of Progress: Counting What Really Matters, explains the difficulty of the overhaul. A recent article on the topic addressed the urgency of the task (Foreign Affairs, May/June 2025, paywalled):

“For Americans, these are tumultuous times. Inequality in income and wealth is at historically high levels. Artificial intelligence is reshaping society at an unprecedented pace, prompting layoffs and putting entire professions at risk. According to an estimate by the Brookings Institution, up to 85 percent of current workers in the U.S. labor force could see their jobs affected by today’s generative AI technology. In the future, that percentage could climb even higher.

At moments of danger and uncertainty, it is usually the task of governments to protect people and help them navigate change–to step in when markets cannot. Yet Americans seem to have little belief in Washington’s capabilities. Over the past two decades, public trust in the U.S. government has plummeted by 40 percent. Some Americans believe the federal government has been absent. Others believe it has failed to meet pressing challenges, including the rising cost of living, and the potential disruptions of AI. Either way, Washington has its work cut out for it as the government tries to regain Americans’ trust.

So where can it start? The Measure of Progress, meanwhile, takes aim at the economic data that states use. According to Coyle, analysts evaluate the economy using outdated, limited metrics, causing policymakers to misunderstand the challenges citizens face.

Coyle’s book is focused on understanding the economy as it exists today. But her argument–that analysts and governments have failed to properly measure peoples’ well-being–is equally essential. The metrics that economists use, Coyle insists, are inherently flawed and do not sufficiently represent the reality of economic activity and value. That poses an immense problem for policymakers and analysts, distorting their view of the world and potentially leading them to faulty conclusions and ineffective policies.”

The problem is multi-faceted. GDP and other metrics were institutionalized in the industrial age, where agriculture and factory production were easy to measure. As these sectors’ share of the economy has slipped, the “hard-to-measure” parts of the economy are now dominant–81.5% by one estimate.

There are many other critical wrinkles in measuring the economy as it is. The book raises the issue of unpaid work, such as families caring for elderly parents and the unpaid “shadow work” that we’re required to do now to keep all of our technology functioning. All this activity occurs outside the traditional market.

Since our metrics don’t put a price tag on clean air and functional ecosystems, these are left out of the calculations, as if they don’t exist. Not only do they exist, they’re critical to our well-being. The book discusses natural capital accounting as an alternative, but alternative measures like this are inherently more challenging than toting up transactions.

What if we decided to measure the economy by the quality of life of the citizenry? While there are endless possibilities of what goes into quality of life, we can start with these basics:

1. Our physical and mental health.

2. The health of our social order–our social contract, social trust, communities and trust in our key institutions

3. The security and stability of our livelihoods and financial future.

Defining health isn’t that difficult. A healthy person doesn’t need any medications because, well, they’re healthy, so there’s no need for any interventions. A healthy person has an HDL / triglyceride ratio (calculated by dividing your triglyceride level by your HDL cholesterol level) well under 2, can walk a mile without even noticing, can stand on each foot for an extended time, and so on.

As for mental health, numerous studies have found that social connections are critical to our overall health, along with what we might call sufficiency–enough financial resources to secure the basics of life, and enough opportunities to fulfill one’s potential.

Let’s go through some charts of what we already measure. Here is a chart of our metabolic health. Over 50% of adult Americans are diabetic or prediabetic. This is a serious disease that shortens our lives.

Only a quarter of the adult population is normal (i.e. healthy) weight, reflecting an unhealthy lifestyle of processed foods and inactivity.

As for mental health, consider teen depression rates. Teen suicide rates have also risen. There is no way to interpret this as healthy.

Loneliness–a measure of declining social connections–is also rising sharply.

I prepared this chart of our unhealthy lifestyle and built environment in 2008. Nothing has changed. We can try to sugarcoat all these, but sugarcoating doesn’t change reality.

Turning to the social and economic sources of stability, security and opportunity, consider the astounding rise of student loan debt, as attending college / university went from being affordable to requiring lifetime debt serfdom.

Student loan delinquencies reflect precarity and insecurity, not prosperity and security.

As for opportunity in an economy and society that claims to be a “level playing field,” the benchmarks of middle-class security are no longer within reach. The number of 30-year olds who are both married and homeowners has plummeted. Yes, we can quibble about statistics like this, but quibbles are apologists’ favorite tools: it’s not so bad. But this is just more sugarcoating.

This chart of spending by income group reveals an enormous wealth-income divide. The top 10% collect virtually all the unearned income (from investments), collect over 40% of all the earned income and account for half of consumer spending. The bottom 60%–200 million Americans–account for one-quarter of total spending–half of what the top 10% (34 million Americans) spend.

The chart of generational wealth indicates opportunities to build wealth were more accessible pre-2000. Those graduating from high school or university in 2008 or later experienced a much different economy than their parents.

The health of the society is a key element in stability, security and opportunity. Social trust is eroding.

Trust in elites and institutions reflects the wealth-income divide. The top 10% reckon everything’s going great because they’re doing great. Meanwhile, the bottom 90% live in a completely different world.

Being born into a wealthy household offers numerous advantages that are difficult for those without these advantages to match. Admissions to elite university reflect this divide. This reflects a neofeudal economy and social order.

The wealthy own the vast majority of income-generating assets. The majority depend on wages for their living. The decline of wages’ share of the economy over the past 50 years is consequential, reflecting the cumulative transfer of $150 trillion from wage earners to capital over the past five decades.

Wealth and income inequality has reached levels that do not reflect a healthy economy or social order.

The share of income going to the bottom 90% has declined.

The bottom 50% of American households own a tiny slice of the nation’s financial wealth. The vast expansion of central bank stimulus and the resulting asset bubbles haven’t increased the wealth of the bottom 170 million Americans, which hovers at 2.6%–signal noise compared to the 31% owned by the top 1% and the 68% owned by the top 10%.

How would we rate the US economy in terms of quality of life? It’s clear that we’d have to conclude it’s in a deep Depression. Can we really sugarcoat all this with claims everything’s going great because GDP is rising and AI is making some of us rich?

As for all the cheerleading about how great the economy is doing–GDP is like collecting data on passenger satisfaction with the dessert cart on the Titanic and declaring everyone is delighted as the great “unsinkable” ship settles into the icy waters of the Atlantic.

*  *  *

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Just ahead of Ukraine’s Zelensky arriving at the White House to meet with President Trump, Russia announced Friday morning that its forces had seized three more villages in Ukraine’s Dnipropetrovsk and Kharkiv regions.

Russian troops captured Pishchane and Tykhe in Kharkiv and Pryvillia in Dnipropetrovsk, the Kremlin said. The development in the Kharkiv region is going be met with particular alarm among Kiev’s backers in the West, given that the Ukrainian’s military’s 2022 counteroffensive had actually retaken much of Kharkiv.

But the Russian military is clearly pushing forward again, and is eyeing the capture of Kupiansk next, which is a crucial logistics hub in the region.

Russia’s military command has at the same time tallied its forces have captured eight Ukrainian settlements in total over the course of the past week.

A statement in TASS says “In the Kharkov direction, Battlegroup North units liberated the settlement of Tikhoye in the Kharkov Region through decisive operations… Battlegroup West units liberated the settlements of Borovskaya Andreyevka and Peschanoye in the Kharkov Region in decisive operations…battlegroup Center units liberated the settlements of Moskovskoye, Balagan and Novopavlovka in the Donetsk People’s Republic through active and decisive operations.”

The Defense Ministry continued listing out: “Over the past week, Battlegroup East units liberated the settlements of Alekseyevka and Privolye in the Dnepropetrovsk Region,” it said.

Without doubt, Moscow has timed its “announcement” touting the capture of all these locations to correspond with Zelensky’s visit to Washington, also coming after Thursday’s Trump-Putin phone call.

The only ‘leverage’ that Ukraine might have is related to its stepped-up long-range drone offensive which has wreaked havoc on Russian oil.

Nobody waited for Zelensky in Washington. So, his PR crew organised a stunt.

They lined up Jermak, the head of Zelensky’s Presidential Office and the pilots of the plane.

The PR female introduces Jermak as if Zelensky did not know his comedy ex-manager.pic.twitter.com/NYFqTz95Q4

— Alternative News (@AlternatNews) October 17, 2025

Depot after depot has been hit over the past weeks and months, including also vital oil shipping terminals on the Crimean coast. If Ukraine received long-range missiles from the West and the United States, it will certainly train them on such vital targets.

The United States will vote “no” to a global carbon tax proposed by the International Maritime Organization (IMO) on Oct. 17, President Donald Trump said on Truth Social.

“I am outraged that the International Maritime Organization is voting in London this week to pass a global Carbon Tax,” he said in the post on Oct. 16, urging others to reject the proposal.

“The United States will NOT stand for this Global Green New Scam Tax on Shipping, and will not adhere to it in any way, shape, or form.

“We will not tolerate increased prices on American Consumers OR the creation of a Green New Scam Bureaucracy to spend YOUR money on their Green dreams.”

The net-zero framework proposal that was put before the U.N. agency specializing in regulating marine transport would require ships to comply with a global fuel standard for large oceangoing vessels, 5,000 tons or larger, to force the shipping industry’s greenhouse gas emissions down to net zero by 2050.

As T.J.Muscaro reports via The Epoch Times, the president’s opposition to the tax proposal follows a statement his administration made on Aug. 12.

Signed by Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy, the statement declared that the United States would retaliate against any of the member states of the IMO that backed it, stating it would be a global carbon tax that “harms the interests of the American people.”

“Under this framework, ships would have to pay fees for failing to meet unattainable fuel standards and emissions targets. These fees will drive up energy and transportation, and leisure cruise costs,” the statement read.

“Our fellow IMO members should be on notice that we will look for their support against this action and not hesitate to retaliate or explore remedies for our citizens should this endeavor fail,” it stated.

“We will fight hard to protect the American people and their economic interests.”

A vote would only occur at the IMO if member states do not agree upon a proposed regulation.

There are 176 member states of the IMO, but a passing vote would require a two-thirds majority of only the 108 member states that ratified previous legislation aiming to reduce shipping pollution.

If passed, the global emissions tax would take effect in 2027 and become “the first in the world” to impose greenhouse gas pricing and mandatory emission limits across an entire industry sector.

The Epoch Times has reached out to the IMO for a response to the U.S. president’s statement.

By Elwin de Groot, head of macro strategy at Rabobank

Whatever…

US equity markets extended their losses yesterday as bond yields fell on the back of a decline in US regional bank shares. The S&P index lost 0.6%, the yield on 10y UST’s dropped more than 5 basis points. The market had the finger pointed at the collapse of the subprime auto lender Tricolor Holdings, underscoring the increased sensitivity of the equity market at these elevated levels. Meanwhile, the IMF said it sees “significant downside risks” to global growth following the renewed tensions between the US and China.

Bloomberg writes that Argentinians are dumping the peso, as they believe a devaluation is unavoidable. This potentially undermines the rescue package, including a $20bn swap line, put up by US Treasury Secretary Scott Bessent. Things likely got worse when, earlier this week, President Trump linked Argentinian leader Javier Milei’s success in the upcoming midterm elections to US support: “If he wins we’re staying with him, and if he doesn’t win we’re gone”, Trump said. That sounds more like a ‘whatever’ than a ‘whatever it takes’ US strategy …

French PM Lecornu can already buy himself an “I’m a survivor” t-shirt after surviving two confidence votes yesterday. Whether he survives the looming budget debate is another matter, as his fate now rests with MPs willing to back the budget. If the government sticks to its pledge not to invoke Article 49.3, a majority must actually vote for it.

Socialists leader Olivier Faure warned: “If parliament is not respected and the pension reform isn’t suspended, we would censure immediately.” Markets, meanwhile, are back at square one: the 10-year yield spread narrowed to 76bp from 86bp last week, and the CAC-40 erased October losses—though spreads remain wider than before Bayrou’s confidence vote announcement in August. MNI quoted EU officials saying the “New Fiscal Rules give Lecornu Budget leeway.” Where have we heard that before?

Macron and Lecornu have bought time, but France’s fiscal—and economic—challenges remain.

Beyond Paris, the global stage looks increasingly like an “eat or be eaten” arena where statecraft tools dominate. Wielding such tools successfully, however, is reserved for the ‘happy few,’ requiring economic heft, financial reach, strategic commodities, a strong bureaucracy, political agility, and military muscle.

That explains why small but wealthy economies like Switzerland drew the short straw: since August 7, Swiss goods face a 39% tariff—except generic drugs and Ticino-refined gold. It explains why weaker economies, especially in Africa, struggle against dumping practices due to weak frameworks and enforcement. It explains why several Asian nations agreed to lower tariffs on U.S. goods in exchange for still-high U.S. tariffs. And even the economically large but politically and militarily weaker EU faces limits. Meanwhile, if you have the commodities, you call the shots: Qatar warned yesterday it may halt business with the EU—including LNG supplies—unless Brussels revises its corporate sustainability rules, Reuters reported.

The US has demonstrated the clearest examples of applying such statecraft, as highlighted by our global strategist Michael Every. Presumably, also, because the US does hold the strongest cards (or at least thinks it holds them). This week and last, it was China’s turn to show it has such statecraft cards up its sleeve. It has introduced port fees for US ships (in response to the US port fees on Chinese built/operated ships coming into effect on 14 October) and underscored its dominance in critical raw materials, particularly rare earths, with a further tightening of its export controls regime.

Whether both players have a full grasp of their own and their opponent’s tools and power(s) remains an open question; uncertainty over that may actually be the strongest guardrail to prevent this power struggle from running completely out of control. That said, it’s even harder to see the spirit going back into the bottle. In other words, the world is changing more rapidly and profoundly than many would have imagined only a few months ago.

And the US keeps trying to drag its allies into its statecraft framework – “President Trump has instructed the ambassador and myself to tell our European allies that we would be in favour of whether you would call it a ‘Russian oil tariff’ on China or a ‘Ukrainian victory tariff’ on China,” Mr Bessent told reporters in Washington on Wednesday. “But our Ukrainian or European allies have to be willing to follow. We will respond if our European partners will join us.”

The strategy would introduce a 500 per cent levy on imports from China, with the money generated being used on weapons for Ukraine’s military. 500 is obviously Trump-style language, -and would effectively be counterproductive as it would halt most trade with tariff revenue close to nothing- but it does carry a serious undertone and the line of reasoning more fits ‘decoupling’ than ‘de-risking’.

For Europe de-coupling seems like no entry territory (unless China would truly block critical raw materials to European markets ?). It explains why Europe is often portrayed as the one being ‘squeezed’ in the middle. Whilst that remains a useful framing of the overall global picture, Europe is not standing still completely. The lack of key enabling factors such as military strength and political agility (read: unity) are visibly slowing things down, however.

For example, the EU has been slow with the implementation of its Competitiveness Compass agenda (a descendant from the 20204 Draghi and Letta reports); The ‘Draghi Observatory’ concluded in September that out of 383 recommendations, only 11.2% have been fully delivered.

That said, the European Commission (EC) is intensifying trade defense measures, making 2025 a record year for anti-dumping tariffs and protectionist actions. On 7 October, it proposed a new steel safeguard regime to replace the current system in July 2026, cutting tariff-free import volumes by 47% and doubling out-of-quota tariffs to 50%, a move partly influenced by the recent US-EU framework agreement. The EC is also considering pre-conditions for Chinese investments in Europe, such as mandatory technology transfers, signaling a strategic shift toward statecraft. Meanwhile, the EU announced it has achieved its €300 billion Global Gateway investment target two years early, focusing on sustainable infrastructure and strategic corridors, particularly in Africa, to rival China’s Belt and Road.

Energy independence remains a priority, with plans to ban Russian oil imports by early 2026 and gas by 2027, pending (final) parliamentary approval. At the Copenhagen summit (1–2 October), leaders debated strengthening EU defense capabilities, including a proposed “European Drone Wall,” though feasibility concerns persist. Discussions also revealed divisions over a €140 billion interest-free loan for Ukraine funded by frozen Russian assets, despite Germany softening its stance. A plan to “buy European” in public procurement – to boost domestic firms and counterbalance protectionist US trade policies as well as China’s weaponization of critical dependencies – is also in the works. But countries haggle about the definition of ‘European’. Overall, the EC’s actions underscore a more assertive and strategic EU posture globally, but it obviously cannot match the depth and speed of the US.

The EU yesterday unveiled a five-year defense roadmap aimed at closing critical capability gaps and modernizing its security architecture.

The plan introduces four flagship initiatives:

1. the European Drone Defence Initiative (operational by end-2027),
2. Eastern Flank Watch,
3. European Air Shield, and
4. European Space Shield.

It calls for coordinated defense spending, joint coalitions, and a target of 40% joint procurement by 2027. Member States are urged to collectively address shortfalls by 2030, accelerating production and strengthening defense industries while maintaining support for Ukraine.

The roadmap signals concrete ambition beyond bureaucracy and is expected to feature prominently at next week’s Brussels summit. This looks set to be the key event to watch next week.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Every market cycle eventually changes investor psychology to believe risk has been conquered. The storylines may change, from “this time it’s different” to “the Fed has our back,” but the psychology does not. When markets rise steadily and volatility remains low, investors confuse stability with safety. That’s precisely the illusion forming in markets today. The S&P 500’s relentless climb, paired with suppressed volatility and ample liquidity, has given the impression that downside risk has somehow been engineered out of the system.

This is where the trap begins. Behavioral finance tells us that people respond more to “how” risk feels than to what the data shows. When investors no longer feel anxious, they begin to take risks they wouldn’t otherwise tolerate. Rising prices reinforce optimism, optimism drives more buying, and the cycle continues until the most minor shock shatters the illusion. Low volatility environments create the psychology for instability by suppressing the healthy corrections that usually reset investor expectations. The longer the calm lasts, the more fragile the market becomes beneath the surface.

“Hyman Minsky argued that financial markets have inherent instability. As we saw in 2020-2021, asymmetric risks rise in market speculation during an abnormally long bullish cycle. That speculation eventually results in market instability and collapse. We can visualize these periods of ‘instability’ by examining the daily price swings of the S&P 500 index. Note that long periods of “stability” with regularity lead to “instability.”

The illusion of safety doesn’t just emerge spontaneously; it’s nurtured by central bank policy. For nearly fifteen years, the Federal Reserve has acted as a stabilizer of last resort, flooding the system with liquidity at the first sign of stress.

Even though the Federal Reserve has withdrawn that monetary support, investors still believe that the Fed can and will always prevent pain. Over the last three years, investors have shifted their focus away from fundamentals and to each “Fed Meeting” for clues as to when the subsequent monetary intervention will arrive.

That shift in psychology is crucially important to understand.

The Fed and the Mirage of Control

The belief that the Federal Reserve can always come to the rescue carries its own danger: it encourages behavior that assumes the absence of consequence. Markets built on faith rather than fundamentals are inherently unstable, no matter how calm they appear.

The Federal Reserve’s well-intentioned interventions have created one of modern finance’s most powerful behavioral distortions: the conviction that there is always a safety net. After the Global Financial Crisis, zero interest rates and repeated rounds of quantitative easing conditioned investors to expect that policy support would always return during volatility. Over time, that conditioning hardened into a reflex: buy every dip, because the Fed will not allow markets to fail.

This is the concept of “moral hazard” in action.

What exactly is the definition of “moral hazard?” 

Noun – ECONOMICS: The lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance.

A good example of this is shown below.

For their survival, zombie companies depend on a speculative investment climate for bond issuance. As discussed in “Recessions Are A Good Thing:”

“‘Zombies’ are firms whose debt servicing costs are higher than their profits but are kept alive by relentless borrowing. Such is a macroeconomic problem. Zombie firms are less productive, and their existence lowers investment in, and employment at, more productive firms. In short, a side effect of central banks keeping rates low for a long time is it keeps unproductive firms alive. Ultimately, that lowers the long-run growth rate of the economy.” – Axios

We also see the same “moral hazard” in the spread between “junk bonds” and A-rated corporates. At a spread of just 1.9%, investors are not being “paid” for the default risk they take with “junk bonds.” The only reason those spreads exist is that investors believe, with almost absolute certainty, that companies will pay their obligations, if not on their own, then with the help of the Federal Reserve.

This mindset has reshaped corporate behavior as well. Companies, confident that credit will remain cheap and plentiful, used debt not to invest productively but to repurchase their shares, shrinking equity floats and boosting earnings per share. This financial engineering, which is currently running at a record pace, helps drive valuations higher, reinforcing the illusion that fundamentals were improving. In reality, liquidity is doing the heavy lifting. The absence of meaningful corrections gave investors an unbroken string of positive reinforcement, a psychological loop that made risk feel optional.

Liquidity, however, is not the same as stability. It masks fragility the way calm seas hide strong undercurrents. When liquidity recedes, even modest disruptions can become magnified. Consider 2018’s “Volmageddon,” when volatility-shorting strategies that had profited for years imploded in a single session. Investors mistook a quiet market for safety, believing their models had tamed uncertainty. In truth, they had only suppressed it.

That lesson is timeless: every era’s innovation eventually finds its limit when liquidity dries up and the illusion of control vanishes.

Behavioral Biases and the Return of Fear

If the Fed and liquidity conditions create the structure of the zero-risk illusion, human psychology provides its fuel. The psychology of investing, in particular, explains why investors underestimate danger when markets are calm. However, psychology is the most significant reason for underperformance by investors who participate in the financial markets over time. Behavioral biases leading to poor investment decision-making are the greatest contributor to underperformance over time. Dalbar defined nine of the irrational investment behavior biases specifically:

• Loss Aversion: The fear of loss leads to a withdrawal of capital at the worst possible time.  Also known as “panic selling.”

• Narrow Framing: Making decisions about on part of the portfolio without considering the effects on the total.

• Anchoring: The process of remaining focused on previous events and not adapting to a changing market.

• Mental Accounting: Separating the performance of investments mentally to justify success and failure.

• Lack of Diversification: Believing a portfolio is diversified when it is a highly correlated pool of assets.

• Herding: Following what everyone else is doing. Leads to “buy high/sell low.”

• Regret: Not performing a necessary action due to regret over a previous failure.

• Media Response: The media is biased towards optimism to sell products from advertisers and attract viewers/readership.

• Optimism: Overly optimistic assumptions lead to rather dramatic reversions when met with reality.

Recency bias also leads us to project the recent past into the future. When markets rise for months, we instinctively assume they will keep doing so. The longer an uptrend persists, the more investors become anchored to it emotionally, treating it as the new normal. Confirmation bias then compounds the problem. Bullish investors seek information that validates their optimism and dismiss data that challenges it. Financial media and social networks amplify this echo chamber, drowning out contrarian voices. Finally, reverse loss aversion, a flip of the classic behavioral rule, takes hold. When portfolios swell, investors become less sensitive to risk because the pain of potential loss feels abstract compared to the pleasure of ongoing gains.

As shown in the chart below, this behavioral trend contradicts the “buy low/sell high” investment rule.

These psychological patterns explain why market collapses often appear to come “out of nowhere.” In truth, the seeds of every downturn are sown during the good times, when caution fades and discipline erodes. A lack of volatility anesthetizes investors, dulling their instinct to manage risk. When the inevitable reversal comes, it is not just unprepared portfolios but mindsets that suffer. The speed with which optimism turns to panic reflects how thoroughly investors have internalized the belief that markets cannot fall.

In the end, we are just human. Despite the best of our intentions, it is nearly impossible for an individual to be devoid of the emotional biases that inevitably lead to poor investment decision-making over time. This is why all great investors follow strict investment disciplines to reduce the impact of human emotions.

Lastly, history offers endless proof. The dot-com mania, the housing bubble, and the “meme stock” frenzy shared the same behavioral DNA. Confidence became arrogance, diversification gave way to concentration, and the line between investing and speculation vanished.

The illusion of safety made investors their own most significant risk factor.

Breaking the Zero-Risk Illusion

The challenge for today’s investor is not merely spotting risk, but feeling it again. In a world where central banks have blurred the boundaries between market cycles, developing a healthy respect for uncertainty is an edge. Successful investors do not try to eliminate volatility; they prepare for it. They recognize that risk is not a variable to be avoided but a constant to be managed.

That starts with reframing risk awareness. Calm markets should not be a source of comfort but a warning sign that risk is being mispriced. Maintaining liquidity through cash or short-term instruments is not an act of fear but one of readiness. Cash provides optionality: the ability to act when an opportunity arises and others are forced to sell. Diversification should go beyond the surface level of asset classes; proper diversification comes from owning assets that respond differently to changes in inflation, liquidity, and interest-rate expectations.

Here are five practical steps to employ today before the next “event” occurs:

1. Reframe Risk as a Constant, Not a Variable: Risk doesn’t go away—it simply migrates from one part of the system to another. If volatility is low, it’s often being stored somewhere else, waiting to be released. Treat calm periods as warnings, not assurances.

2. Diversify by Source of Return, Not Label: Don’t just diversify across asset classes; diversify across drivers of return. Own assets that respond differently to inflation, liquidity, and policy shocks. Real diversification is behavioral, not cosmetic.

3. Maintain Cash as Optionality: Cash isn’t trash—it’s future opportunity. Holding liquidity during euphoric markets gives investors the flexibility to act when others panic.

4. Recognize the Fed Is Not Omnipotent: Monetary policy can influence liquidity, but it can’t repeal the business cycle. Believing otherwise is the foundation of the zero-risk illusion.

5. Measure Success by Time Horizon, Not Headlines: The best investors think in decades, not days. Their goal isn’t to beat the market every quarter; it’s to compound wealth across complete cycles by avoiding permanent losses.

Markets don’t punish greed; they punish complacency. The most dangerous words in investing are still “this time is different,” and the illusion of a risk-free market is just another version of that fallacy. As investors, our job isn’t to eliminate risk; it’s to respect it.

The irony of the zero-risk illusion is that it thrives precisely when markets are calmest. Lulled into comfort, investors stop hedging, questioning, and preparing. When volatility inevitably returns, the same psychology that fueled the rally becomes its undoing.

Just as important is recognizing that the Federal Reserve is not omnipotent. Policy can influence timing but not the laws of cycles or valuation. Believing otherwise invites the same complacency that precedes every correction.

Markets will always swing between fear and greed. The illusion of zero risk is simply the latest iteration of an old behavioral story; the belief that we’ve outgrown the past. But risk never disappears; it only hides until complacency pulls it back into view.

The best investors understand psychology deeply. They remain humble in good times, skeptical when everyone else is euphoric, and disciplined when the crowd forgets what real risk feels like.

New York City mayoral candidates Democratic nominee Zohran Mamdani, his primary opponent Andrew Cuomo, and Republican nominee Curtis Sliwa squared off on Oct. 16 in a bid for the seat that current Mayor Eric Adams is vacating in 2026.

Adams dropped out of the race on Sept. 28.

The debate, co-hosted by POLITICO, NBC 4 New York, and Telemundo 47, took place at 30 Rockefeller Center in Manhattan.

Socialist New York City mayoral candidate Zohran Mamdani denies being a “communist,” yet his limited job track record and history of promoting Marxist ideology raise alarm bells. He has long pushed nation-destroying policies, echoing the globalist agenda pushed by dark-money-billionaire-funded NGOs such as all things ‘woke’, and of course, the “defund the police” movement, made famous by the Marxist rioters BLM that helped trigger a nationwide crime wave in recent years. That’s one of the key reasons President Trump has deployed federal officers and National Guard members to certain progressive cities plagued by out-of-control crime because of police shortages.

And yet, after left-wing Democrats pushed toxic social and criminal justice reforms that sparked nothing but chaos, the democratic socialist still has strong odds of becoming the next mayor of New York City.

Here are the top five moments from the debate (courtesy of Fox News):

1. Mamdani flips on Hamas

During the debate, Mamdani appeared to backtrack on his position about Hamas laying down their arms, saying, “Of course I believe that they should lay down their arms.”

Mamdani was responding to a question from a moderator who said his previous answer, which was made to Fox News anchor Martha MacCallum, was “confusing,” after he dodged questions when she asked if he believes Hamas should lay down their weapons and leave leadership in Gaza, according to the cease-fire agreement they entered into.

“I’m proud to be one of the first elected officials in the state who called for a ceasefire,” Mamdani said.

“That means all parties have to ceasefire and put down their weapons. And the reason that we call for that is not only for the end of the genocide, but also an unimpeded access of humanitarian aid. I, like many New Yorkers, and I’m hopeful that this ceasefire will hold.”

Mamdani was also pressed by Cuomo on his refusal to condemn the phrases “from the river to the sea” and “globalize the intifada,” both of which are widely seen as calls for the extermination of Jews. Sliwa pressed on this issue as well,  telling Mamdani, “Jews don’t trust that you will be there for them when they are victims of antisemitic attacks.”

Mamdani answered that he will be a mayor for all New Yorkers, saying, “Jewish New Yorkers who have told me about their fear in living in this city, and I will be a mayor who finally addresses that, not through the theatrics of the politics on the stage, but through action.”

2. National Guard not welcome

President Donald Trump’s deployment of National Guard troops to major American cities also loomed large over Thursday night’s New York City mayoral debate.

Candidates were asked about the “threat hanging over the city” of National Guard troops being sent to New York City. All three candidates indicated they would oppose troops being sent to the city.

Mamdani asserted that “What New Yorkers need is a mayor who can stand up to Donald Trump and actually deliver on that safety.”

“When Donald Trump sent ICE agents on people in Los Angeles, Andrew Cuomo said that New Yorkers need not overreact. That is the furthest answer that New Yorkers are looking for. They are looking for someone who will lead, someone who will say that they will have their back, someone who will actually fight for the people of this city,” said Mamdani.

Cuomo, meanwhile, said that “the answer in the subways is not more National Guard” but rather “more NYPD is the answer.”

3. ‘Literally has never had a job’

Cuomo attacked Mamdani’s thin resume, saying, “He has no experience.”

“This is not a job for someone who has no management experience, to run around 300,000 people, no financial experience to run a $115 billion budget,” said the former governor.

“He literally has never had a job. On his resume, it says he interned for his mother. This is not a job for a first timer. Any day you could have a hurricane, God forbid, a 9-11, a health pandemic, if you don’t know what you’re doing, people will die.”

Mamdani immediately shot back, “If we have a health pandemic, then why would New Yorkers turn to the governor who sent seniors to their death in nursing homes? That’s the kind of experience that’s on offer here today.”

“What I don’t have in experience I make up for in integrity, and what you don’t have in integrity you could never make up for in experience,” he added.

Cuomo dismissed the nursing homes dig as a political investigation that “went nowhere.”

4. Defund the police continues to haunt Mamdani

Cuomo also knocked Mamdani for previous calls to defund the police and statements denouncing law enforcement.

“Respect the police. They’re not racists as the assemblyman calls them, they’re not a threat to public safety as he says, they’re not anti-queer, they are here to protect New Yorkers, work with them, fortify them,” said Cuomo.

Sliwa jumped in at this moment to deliver a jab to Cuomo, saying, “That’s ironic that you say that now … your parole board released 43 cop killers back into the street. Your father, when he was governor, released none. I knew Mario Cuomo; you’re no Mario Cuomo.”

In response to Cuomo’s attack, Mamdani said, “As much as Andrew Cuomo wants to bring up tweets from 2020, which is around the same time that he was sending seniors to their death in nursing homes, I am looking to work with police officers, not to defund the NYPD.”

Mamdani again touted his plan to have “dedicated teams of mental health outreach workers” deployed to the top 100 subway stations with the highest levels of mental health crises and homelessness.

5. No love for Hochul

In a debate filled with candidates interjecting and talking over each other constantly, the room suddenly went silent when a moderator asked, “Show of hands. Who supports [New York Gov.] Kathy Hochul for re-election?”

Not a single candidate raised their hand.

Cuomo, who picked Hochul as his lieutenant governor, said, “We have to know who’s running.”

Mamdani said, “It’s a decision that should be made after this general election.”

He noted, however, that he believes Hochul is “doing a good job, and not only delivering for New Yorkers but also standing up to Donald Trump.”

“Then endorse her!” Cuomo interjected. “Why don’t you endorse her?”

Mamdani noted, “I appreciate her support, and I appreciate her work,” but said, “I’m focusing on November.”

Sliwa signaled his support for the gubernatorial campaign of Rep. Elise Stefanik, R-N.Y., saying, “a Republican Mayor Curtis, a Republican Governor Stefanik … save this city.”

Hmm. 

🚨 BREAKING: Zohran Mamdani declares Andrew Cuomo is not qualified to be mayor of New York City because Cuomo REFUSED to visit a Muslim mosque

“He had over 10 years and he couldn’t name a single mosque that he visited! […] Muslims [want] equality and respect!!”

“Name a SINGLE… pic.twitter.com/cdzIKzbLN6

— Eric Daugherty (@EricLDaugh) October 16, 2025

Over at cryptocurrency-based prediction market Polymarket, Mamdani’s odds ticked higher by 2% to 90% probability of winning the mayoral election next month. Cuomo is down to 10%, while Siwa is

Resurfacing overnight… 

Hmm https://t.co/wrBdtBgMTT

— Elon Musk (@elonmusk) October 17, 2025

Typical politician. 

Zohran Mamdani lies, claims he doesn’t want to defund the police.

He has publicly called to defund the police over 15 times. pic.twitter.com/sJcb70ES2P

— RNC Research (@RNCResearch) October 17, 2025

NYPost this AM.

Related: 

• Peter Schweizer: Mamdani Family Is “Joined At The Hip” With Foreign Radical Powers

• Schweizer Exposes Foreign-Linked Cash Funneled Into NYC Candidate Zohran Mamdani’s Campaign

• Zohran Mamdani’s Socialist Policies Would Put The Final Nail In New York’s Coffin

• Billionaires For Socialism: The $2 Billion “Grassroots” Operation Behind Zohran Mamdani

• China-Linked Tech Tycoon Neville Roy Singham’s Niece Backs NYC’s Next Marxist Mayor

The candidates are scheduled to meet for a second and final debate next week.

An Oct. 9 Quinnipiac University’s New York City poll shows Mamdani leading with 46 percent of likely voters backing him, followed by 33 percent supporting Cuomo and 15 percent in favor of Sliwa.

If elected, Mamdani would be the city’s first Muslim and Indian American mayor. The 33-year-old’s mother is award-winning filmmaker Mira Nair.

Any Polymarket bets on whether Bill Ackman stays in NYC if Mamdani wins?

Hungary has announced that “preparations are in full swing” for a big anticipated near-future summit between Presidents Trump and Putin, following their Thursday lengthy ‘positive’ phone call.

Hungarian Prime Minister Viktor Orbán stated that Budapest is ready and willing to host the meeting, which would be the second of Trump’s administration since the Alaska bilateral summit, calling it “great news for the peace-loving people of the world” and describing Hungary as an “island of peace.”

No date was given, but it was concluded in the phone call that the aim of a future Budapest meeting would be to “bring this ‘inglorious’ War, between Russia and Ukraine, to an end,” according to Trump’s words on Truth Social.

This immediately raised questions among some pundits over how Putin would be allowed to travel to Hungary, given he’s facing an arrest warrant from the International Criminal Court (ICC). This has impacted the Russian leader’s ability to fly into or even over some European countries. 

But Hungary has assured Putin can enter the country for such a summit, it’s Foreign Minister Peter Szijjarto made clear on Friday. It is also clear that Hungary is eager to be in the spotlight as a potential peace-broker related to the Ukraine war.

Orban has long criticized EU and NATO policy regarding Moscow, and has alongside Slovakia continued to resist cutting dependency on Russian energy imports.

All of this has led to an important Friday phone call between the Hungarian and Russian leaders, conveyed in state media as follows:

Peskov did not disclose the details of the Putin-Orban call, but stated that the Kremlin will soon provide more information about the discussions.

The Kremlin’s press service noted that during the call, the Hungarian leader expressed a willingness to provide all the conditions for holding the Russia-US summit in Budapest.

The press service also stated that Putin had informed Orban about the main content of his recent conversation with Trump. According to the Russian leader, Moscow expects to discuss with the US the roadmap towards a peaceful resolution of the Ukraine conflict, “with a view of holding a future Russian-American summit in the Hungarian capital.”

But much could be determined based on Ukrainian President Zelensky’s meeting with Trump at the White House Friday, given there’s anticipation that the US could announce Tomahawk missiles for Ukraine.

🇪🇺🇭🇺 EU ELITES FUMING: TRUMP–PUTIN TO MEET IN BUDAPEST IN HISTORIC SUMMIT

Putin’s first EU visit since the Ukraine war won’t be to Brussels, Berlin, or Paris, it’ll be to*Budapest.

And the host? Viktor Orbán, the man EU elites love to hate.

For years, Brussels has smeared… https://t.co/LUkzwXDDHh pic.twitter.com/VEcmFHAJSY

— Mario Nawfal (@MarioNawfal) October 16, 2025

This could certainly put any forward diplomatic momentum between Trump and Putin on hold once again. No one expects, however, that a limited number of long-range US missiles to be an ultimate game-changer in the war, but it could potentially devastate key targets in Moscow, for example. 

Authored by Steve Watson via Modernity.news,

Democrat mouthpiece talk show host Jimmy Kimmel has dismissed reports of unrest in major U.S. cities, claiming there is “no chaos” and that it is all being manufactured by the Trump Administration in order to justify a “military takeover.”

Kimmel, back on air despite having abysmal ratings, stated “There’s no chaos in Portland. None. There is no chaos in Chicago. There was no chaos in Los Angeles. They’re pretending there’s chaos as a pretense for a military takeover.”

KIMMEL: “There’s no chaos in Portland. None. There is no chaos in Chicago. There was no chaos in Los Angeles. They’re pretending there’s chaos as a pretense for a military takeover.” pic.twitter.com/Rz53116jlc

— Chief Nerd (@TheChiefNerd) October 16, 2025

Kimmel’s show has basically become the television presentation of whacked out BlueAnon leftists’ fever dreams. He’s passing off their unhinged BlueSky rants as his own monologue.

The comments fly in the face of documented repeated ambushes, assaults, and coordinated threats against U.S. Immigration and Customs Enforcement (ICE) agents, particularly in Portland and Chicago.

These incidents not only demonstrate ongoing chaos but also highlight a dangerous collaboration between criminal elements and domestic extremists.

Portland has long been a flashpoint for protests against federal immigration policies, but 2025 has seen a marked intensification of attacks on ICE personnel. In early October, DHS reported deploying special operations teams following multiple violent incidents where Border Patrol officers were ambushed by individuals ramming federal vehicles.

This wasn’t an isolated event; anarchists and rioters have been accused of illegally doxxing ICE officers, exposing their personal information to incite further harassment and potential violence.

Such tactics have created a hostile environment where federal agents face constant threats.

Protests outside ICE facilities have frequently turned confrontational. On October 4, Portland Police made arrests during demonstrations at a South Portland ICE site, where criminal activity was monitored amid escalating unrest.

🚨 BREAKING: Illinois police just arrested the RING LEADER of tonight’s anti-ICE “protest” in Broadview.

They are now in the FINDING OUT stage. Arrests are being made.

This needs to become the NORM and it needs to happen in Portland.

pic.twitter.com/fz3BM7h3J0

— Eric Daugherty (@EricLDaugh) October 5, 2025

Just days later, federal officers fired tear gas and made multiple arrests as hundreds of protesters marched on the facility, with projectiles and gunfire reported in similar encounters.

A particularly alarming incident involved a federal agent drawing a weapon on a vehicle entering the ICE facility, underscoring the heightened state of alert.

The White House has cited a dramatic rise in assaults—claiming over a 1,000% increase.

Nonetheless, DHS and FBI warnings about “domestic violent extremists” targeting ICE facilities indicate an evolution in tactics, including escalated violence like armed attacks.

Local leadership has exacerbated the chaos. Portland’s mayor reportedly ordered the removal of police tape around an ICE facility despite federal demands for a secure perimeter, potentially leaving agents vulnerable to attacks.

These examples illustrate not just sporadic unrest but a pattern of targeted aggression against federal law enforcement.

Chicago’s situation mirrors Portland’s, with ICE agents facing ambushes that have led to injuries, arrests, and federal investigations. On October 14, CBP agents were involved in a vehicle-ramming attack during an immigration operation, described by DHS as an ambush by domestic terrorists.

🚨 UPDATE: After a DHS vehicle-involved crash in Chicago, leftists waving Mexican flags threw ROCKS at federal agents

They had to deploy crowd control to get the rioters to stop.

Foreign flags and total DISORDER. It’s a WARZONE. Gov. Pritzker and Mayor Johnson are totally… pic.twitter.com/CxdW0sTFrG

— Eric Daugherty (@EricLDaugh) October 14, 2025

Protesters have been accused of boxing in ICE SUVs with vehicles to facilitate attacks, including instances where an armed individual assaulted agents.

A high-profile shooting occurred on October 4, when federal agents injured an armed U.S. citizen woman during a confrontation in Chicago’s Little Village neighborhood.

This followed a chase that ended in a crash, sparking protests where tear gas was deployed, affecting Chicago Police officers.

Further incidents include the arrest of a Chicago TV producer during an ICE raid, where she was accused of throwing objects at a Border Patrol vehicle.

Activists and residents report increasingly combative federal tactics, but evidence points to so called protesters clashing violently outside ICE facilities.

DHS reports that early this morning in Broadview, federal agents were attacked when 10 vehicles surrounded and rammed their patrol cars, trapping them inside. Agents were forced to exit their vehicles as the attack escalated.

One of the drivers, armed with a semi-automatic… pic.twitter.com/PMzD3dPTEF

— Benny Johnson (@bennyjohnson) October 4, 2025

Local authorities have compounded the issue. Chicago Police were reportedly ordered not to assist ICE agents under attack, a decision criticized by national police unions as a “shocking violation of duty.”

This hands-off approach has left federal agents isolated amid ambushes, contributing to the very chaos Kimmel denies exists.

The violence isn’t merely spontaneous; DHS has uncovered “credible evidence” of coordinated threats. Earlier this week, the department announced that Mexican cartels, in collusion with domestic extremist groups, have placed bounties—up to $50,000—on ICE and CBP officers, specifically targeting operations in Chicago.

These bounties incentivize assassinations and attacks, representing an unprecedented fusion of transnational crime and leftist extremism. DHS Secretary Kristi Noem highlighted this alliance, noting how cartels are enlisting gangs and extremists to execute hits.

FBI assessments corroborate this, warning of escalated violence against ICE facilities by domestic violent extremists.

This intelligence underscores that the chaos is not imagined but a calculated campaign to undermine federal enforcement.

Kimmel’s ludicrous dismissal of chaos aligns with his earlier denial of Antifa’s existence, calling it an “entirely imaginary organization.”

Jimmy Kimmel lies to cover for Antifa:

“There is no Antifa. This is an entirely imaginary organization. There is not an Antifa.”

That’s about as Orwellian as it gets. Legacy media continues to function as Antifa’s propaganda apparatus. pic.twitter.com/zhyrFDCaEg

— Western Lensman (@WesternLensman) October 10, 2025

This rhetoric echoes Democratic talking points that downplay organized leftist extremism, even as arrests and DHS probes reveal Antifa-linked networks fueling the violence.

By parroting these denials, late-night hosts like Kimmel serve as mouthpieces for a narrative that ignores the ambushes, bounties, and bloodshed faced by ICE agents daily. The evidence is clear: Chaos exists, driven by real threats that demand a robust response, not dismissal. Pretending otherwise only emboldens those perpetuating the violence.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

With U.S. car prices continuing to climb, the average cost of a new vehicle has officially crossed the $50,000 mark – a milestone analysts say was inevitable, according to Yahoo Finance.

According to Kelley Blue Book (KBB), the average transaction price reached a record $50,080 in September, up 2.1% from August and 3.6% year over year—the largest annual increase in more than two years.

“We’ve been expecting to break through the $50,000 barrier. It was only a matter of time, especially when you consider the best-selling vehicle in America is a pickup truck from Ford that routinely costs north of $65,000,” said Erin Keating, executive analyst at Cox Automotive, which owns KBB.

Keating noted that wealthier households are driving demand for new cars, supported by access to capital and better loan terms. Meanwhile, lower-income buyers have shifted to the used market as cheaper new models disappear. The $20,000 market for cars is “extinct,” she said.

Yahoo writes that recent CPI data backs this up: new vehicle prices rose 0.3% in August and 0.7% year over year, while used vehicles climbed 1% and 6%, respectively. The September CPI report has been delayed by the government shutdown.

KBB said tariffs have created “new cost pressure” across the industry, with many trade deals unfinished and a 25% rate still applied to vehicles imported from Mexico and Canada.

A surge in electric vehicle sales also pushed prices higher. The expiration of the federal EV tax credit on Sept. 30 prompted a wave of last-minute purchases, lifting September’s numbers. KBB estimated EVs made up 11.6% of sales, with an average transaction price topping $58,000.

Incentives also played a growing role in September’s record prices, Zero Hedge noticed while digging deeper into the KBB report, with average discounts rising to 7.4% of the average transaction price, or about $3,700 — the highest level so far in 2025. A wave of new 2026 model-year vehicles and a richer mix of luxury and EV models helped push transaction prices higher, with more than 60 models now averaging above $75,000.

Electric vehicle sales surged nearly 30% year over year in the third quarter, reaching a record 437,000 units, as buyers rushed to lock in incentives before they expired. KBB estimated the average EV price at $58,124 in September, up 3.5% from August, while Tesla’s average slipped to $54,138, down 6.8% year over year amid lower-priced Model 3 and Model Y trims.

Looking ahead, KBB doesn’t expect relief. The average new MSRP hit $52,183 in September, up 4.2% year over year. “It is important to remember that the new-vehicle market is inflationary. Prices go up over time, and today’s market is certainly reminding us of that,” Keating said.