How do various sectors in the United States view the US-Israel-Iran conflict?

1. How Different Sectors in the U.S. View the U.S.-Israel-Iran War

The war between the U.S. and Israel and Iran has been ongoing for one month. This weekly report focuses on how different sectors in the United States view the U.S.-Israel-Iran war and their attitudes toward it.

(1) Ordinary people: Generally do not support military action, but there is severe partisan division

Most people oppose or do not approve of military action, believing that the military action “has gone too far,” could drag on, has high costs, and benefits Israel more than the United States. But there is severe partisan division: Republicans generally support it, especially the MAGA group, while Democrats and independent voters are opposed at very high rates. Key observation of polling results from the Pew Research Center (neutral) and FOX News (Republican-leaning):

According to a Pew Research Center survey (3/16-3/22), about six in ten (61%) disapprove of the way Trump has handled the Iran conflict, while 37% of respondents say they approve. The share saying that military action is not making progress smoothly (45%) is clearly higher than the share saying progress is very good or extremely smooth (25%). There are clear partisan divides in opinions: Democrats and independent voters who lean Democratic strongly disapprove of the way Trump has handled the conflict (90%), and believe the U.S. made the wrong decision in striking Iran (88%). About seven in ten Republicans and those who lean Republican approve of the way Trump has handled the conflict (69%), and believe the U.S. made the right decision (71%). In addition, 54% of Americans believe the U.S. military action against Iran will continue for at least six more months, 35% expect the war to last one to six more months, and only 8% think the war will end in less than a month. 58% of Republicans expect the war to end within the next six months, while 68% of Democrats believe the war will last six months or longer.

According to a FOX News survey (3/20-3/23), 42% of voters support the U.S.’s current military action against Iran, while 58% oppose, including nearly four in ten who strongly oppose. There is also a clear partisan divide: 90% of the MAGA group support it, 77% of Republicans support it, while the support rates among independents (28%), liberals (13%), and Democrats (12%) are small.

(2) Large-scale protest waves break out across the U.S.

Starting in early March, the U.S. began to see protest activities. On March 2, about 150 people gathered in front of Los Angeles City Hall, and protests were launched simultaneously in about 40 cities across the country (organized by a coalition of 30 groups), condemning a “violation of sovereignty” and an “illegal war.”

The protest activity is escalating. According to CCTV International News, local time on March 28, millions of Americans took to the streets to oppose the U.S. and Israel launching military action against Iran. Organizers expected that more than 3,100 protest events would be held nationwide on that day, covering 50 states, as well as major cities including Washington, New York, Los Angeles, Philadelphia, and Boston.

(3) Congress: Partisan division; the U.S. Congress becomes an “observer”

A large majority of Republican lawmakers support Trump’s “necessary action,” viewing Iran as an “imminent threat.” House Speaker Mike Johnson believes, “Restricting the president’s power while U.S. troops are already in a conflict is dangerous.” But there are also a few exceptions among Republicans—for example, Kentucky Senator Paul and Representatives Massie and Davidson of Ohio have questioned and supported limiting Trump’s military power.

A large majority of Democratic lawmakers oppose Trump’s military action. Senator Fetterman of Pennsylvania is the only Democrat in the Senate who voted against curbing Trump’s military power.

Due to division between the two parties in Congress, neither resolutions calling for troop withdrawal nor resolutions authorizing Congress passed; as a result, the U.S. Congress has become an “observer.” On March 4, the Senate rejected a bill intended to require that President Trump must obtain congressional authorization before taking further military action against Iran, with “47 yeas - 53 nays.” On March 5, the House rejected a similar limiting resolution, with “212 yeas - 219 nays.” There were subsequent votes on similar resolutions, but the results were the same or highly similar.

(4) Mainstream Middle East experts overall oppose; think tanks are divided along party lines

Mainstream experts on Middle East issues believe that the risks of a “preventive” war or a war “leading toward regime change” are high, the outcomes are uncertain, and it could lead to long-term conflict and regional instability.

According to the Middle East Scholar Barometer survey from the University of Maryland (641 Middle East academic experts, about three-quarters in the U.S., with about one-third of the questionnaires collected after the war began), only 5% of experts support launching a war against Iran, and only 1% believe large-scale strikes would produce a pro-U.S. democratic regime. 94% of experts believe that the Trump administration’s policies toward Iran make war more likely to occur. Experts generally believe that Iran’s regime has strong cohesion and resilience—it is able and willing to respond with retaliation—and that the war is unlikely to easily achieve regime change or bring about a stable democratic transition.

Mainstream U.S. think tanks’ analysis of the war shows clear division.

Neutral or liberal think tanks (such as the Brookings Institution, the Carnegie Endowment, the Center for Strategic and International Studies, the Council on Foreign Relations, RAND Corporation, etc.) tend to take a cautious or critical stance, emphasizing that while early military progress is significant, strategic objectives are unclear, regime change is difficult, and long-term risks are high— including energy crises, regional instability, nuclear proliferation, and more. Conservative or right-leaning think tanks (such as the Heritage Foundation, the American Enterprise Institute, the Atlantic Council, etc.) are relatively more supportive, viewing the war as an opportunity to weaken the Iran threat, but they also warn about the exposure of vulnerabilities in military capacity and potential shocks to Trump’s economic prosperity. Doves/restraining think tanks (such as the Quincy Institute, the Stimson Center, etc.) strongly oppose, arguing that “the war is going badly.” They say Iran is not “desperate,” but instead is pursuing a coherent “coercion risk strategy.” Funding tracking by think tanks shows that some institutions have been “pushing for war” because they are supported by the defense industry and/or foreign funding.

2. Review of Key Overseas Data and Tracking of High-Frequency Data

(1) Key economic data, events, and developments: past week and coming week

For the week of March 23-27: the U.S.: January building expenditures y/y? (actually: month-over-month), March S&P services PMI preliminary, and March University of Michigan consumer sentiment index final were all below expectations. March S&P manufacturing PMI preliminary and February import price index month-over-month came in above expectations.

For the week of March 30-April 3: U.S. data releases: March Conference Board consumer confidence index (3/31), March ADP employment, February retail sales month-over-month, March ISM manufacturing PMI (4/1), and March nonfarm data (4/3).

For the week of March 23-27: the Eurozone: March consumer confidence index preliminary, March S&P services PMI preliminary, and February M3 year-over-year were all below expectations, while March S&P manufacturing PMI preliminary was better than expected.

For the week of March 30-April 3: Eurozone data releases: March CPI preliminary (3/31) and February unemployment rate (4/1).

3** For the week of March 23-27: Japan:** February CPI data was below expectations; March S&P manufacturing and services PMI fell, but remained above the expansion/contraction line.

For the week of March 30-April 3: Japan data releases: March Tokyo CPI, February unemployment rate, February retail sales of supermarkets? (社零) year-over-year, February industrial production month-over-month initial (3/31), and Q1 Tankan (short survey of business conditions) manufacturing and non-manufacturing indices (4/1).

(2) Weekly economic activity indices

U.S. economic activity index edges up. For the week of March 21, the U.S. WEI index was 2.86% (four-week moving average 2.66%), up from 2.63% the prior week (four-week moving average 2.6%).

Germany’s economic activity index recovers slightly. For the week of March 22, Germany’s WAI index was 0.13% (four-week moving average 0.0%), up from -0.02% the previous week (four-week moving average -0.04%). Note that because not all sub-item data has been released, the revision range for Germany’s WAI index over the most recent one week is relatively large, so its reference value is comparatively weaker.

(3) Demand

1. Consumption: U.S. Redbook retail y/y growth rate edges higher

U.S. Redbook retail y/y growth rate edges higher. For the week of March 20, U.S. Redbook retail y/y was 6.7%, with a four-week moving average of 6.6%; the prior week was 6.4%, with a four-week moving average of 6.6%.

2. Real estate: U.S. mortgage rates continue to rise, and the number of mortgage applications declines

Recently, U.S. mortgage rates have continued to rise. On March 26, the 30-year fixed mortgage rate in the U.S. was 6.38%; the prior week was 6.22%, and two weeks prior was 6.11%.

Mortgage application volume slips at the margin. For the week of March 20, the U.S. MBA composite index (reflecting mortgage application volume) was 310.7, down 10.5% month-over-month; the prior week’s month-over-month change was -10.9%.

(4) Employment: Initial jobless claims in the U.S. meet expectations

Initial jobless claims meet expectations, with a slight uptick at the margin, but remain low. For the week of March 21, initial jobless claims were 210,000 in the U.S., in line with the expectation of 210,000, and the prior value was 205,000.

Continuing jobless claims fall, better than expected. For the week of March 14, continuing jobless claims dropped from 1.851 million to 1.819 million, versus an expectation of 1.849 million.

(5) Prices: Commodity prices surge broadly; U.S. gasoline prices skyrocket

Due to the ongoing Middle East geopolitical conflict, overseas commodity prices continue to rise. On March 27, the RJ/CRB commodity price index rose 0.5% week-over-week; the prior week was up 0.4%.

U.S. gasoline retail prices continue to surge. As of the week of March 23, retail gasoline prices were up 6.2%, reaching $3.79 per gallon; the prior week was up 6%, and two weeks prior was up 16.6%.

(6) Finance

1. Financial conditions: Financial conditions in the U.S. and Europe continue to tighten

Financial conditions in the U.S. and Europe continue to tighten. On March 27, the Bloomberg U.S. Financial Conditions Index was 0.019, versus 0.322 on Friday of the prior week. The Bloomberg Eurozone Financial Conditions Index was 0.697, versus 0.975 the prior week.

2. Offshore dollar liquidity: continues to tighten slightly

Offshore dollar liquidity continues to tighten. On March 27, the 3-month USD/JPY swap spread basis was -22.25 pips, versus -21.75 pips one week earlier. The 3-month EUR/USD swap spread basis was -4.75 pips, versus -4 pips one week earlier.

3. Credit spreads: the worst-yield spread of high-yield USD corporate bonds rises notably

The spread of the worst-yield for high-yield USD corporate bonds rises notably. On March 27, for J. P. Morgan’s global BB&B-rated USD corporate bonds, the Spread-to-worst was 305.235 bp, widening by 14.574 bp from Friday of the previous week.

4. Treasury spreads: U.S.-Japan spread widens; Portugal-Germany and Italy-Germany spreads narrow slightly

The long-end U.S.-Japan Treasury spread widens. As of March 26, the 10-year U.S.-Germany Treasury spread was 140 bp, unchanged from the previous week. The 10-year U.S.-Japan Treasury spread was 213.4 BP, widening by 15.7 bp from last week.

Portugal-Germany and Italy-Germany spreads narrow slightly. As of March 27, the 10-year Italy-Germany Treasury spread was 95.3 bp, narrowing by 2.2 bp from the previous week; the 10-year Portugal-Germany Treasury spread was 48.5 bp, narrowing by 3.8 bp from the previous week.

(7) Fiscal: As of this week, cumulative U.S. federal funds spending is up 6% y/y

Using daily high-frequency tracking of the federal funds spending scale based on the U.S. Department of the Treasury’s Daily Treasury Statements.

As of March 26, cumulative U.S. federal funds spending was approximately $2 trillion, up 6% y/y. As of the end of February, the cumulative y/y was 12.8%.

Source of this article: Hua Chuang Securities, Zhang Yu

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