In 1957 nine African-American pupils attempted to register at Little Rock Central High School in Arkansas. The previously white-only school was belatedly complying with a Supreme Court decision, Brown v Board of Education, issued three years before that ordered the desegregation of schools. Yet, after braving a mob of some 300 who heckled and hissed, the students found their entry barred by members of the Arkansas National Guard, summoned by the segregationist governor, Orval Faubus. The president, Dwight Eisenhower, soon resolved the crisis by federalising the entire Arkansas National Guard, wresting it from the control of the governor. The very guardsmen who had been ordered to prevent the pupils’ attendance now escorted them into the building.
Most Americans are only dimly aware of the many functions that the National Guard perform. Its establishment long predates the formation of the United States by more than a century. Recent events are forcing examination, though. On June 7th, President Donald Trump federalised units of the California National Guard, over the strident objections of Gavin Newsom, the state’s governor. Mr Trump’s action came after deportation raids in Los Angeles provoked protests, some of them violent.
The National Guard in Little Rock, Arkansas in 1957
Video: Getty
Ordinarily, state National Guards are under the control of governors. Most of their members hold civilian jobs for much of the year, but can be mobilised for emergencies such as natural disasters or unrest. They are the modern-day versions of the colonial state militias; their role is enshrined in the constitution. Article I assigns Congress the power “to provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions”. Yet they also are reservists for the professional military services and can be commanded by the president and deployed abroad when needed.
In the two decades after Little Rock, state governors or the president mobilised the Guard regularly, often in response to unrest, though for other purposes too. In March 1970 Richard Nixon, then the president, ordered the deployment of almost 29,000 soldiers to distribute letters amid a postal workers strike. It was not a particularly effective solution, and soon a bargain was struck to get the mailmen back to work.
Little Rock, Arkansas
Sep 25th President Eisenhower directed the National Guard, along with the army, to protect black schoolchildren who were trying to attend a previously segregated school
Birmingham, Alabama
Jun 11th George Wallace, the pro-segregation governor, blocked black students from attending the state university. President Kennedy directed guardsmen to let them through. Mr Wallace relented
Selma and Montgomery, Alabama
Mar 25th Civil rights leaders planned a march from Selma to Montgomery, but were brutally turned back by police. When they tried to repeat the march two weeks later, President Johnson ordered the Guard to protect them, over Mr Wallace’s objections
Detroit, Michigan
Jul 23rd Civil-rights riots flared across the country during the 1960s, many of which were dealt with by state National Guards under the command of their governor. Detroit’s were among the worst. Governor George Romney deployed the National Guard to quell the riots, and Mr Johnson agreed to deploy army units to the city
Multiple cities
Apr 4th After Martin Luther King junior, a civil-rights leader, was assassinated in Memphis, riots broke out in cities across the country. President Johnson deployed 13,600 troops to Washington, DC alone. Federal forces were also deployed to Baltimore and Chicago
Kent, Ohio
May 4th Governor Jim Rhodes called in the National Guard to disperse anti-war protesters at Kent State University. They did not disperse; some threw rocks. The guardsmen opened fire, killing four students
Los Angeles, California
Apr 29th Four Los Angeles police officers had been filmed beating Rodney King, a black man. When they were acquitted, enraged Angelenos protested. Rioting carried on over six days. Governor Pete Wilson deployed Guard units and President George H.W. Bush deployed federal troops
Multiple cities
May 26th A Minneapolis policeman murdered George Floyd, a black man, during an arrest. Protests started in the city the next day and spread nationwide. By early June, dozens of states had called out their National Guard to control protests, which continued for months
One infamous and ugly use of the National Guard came in May 1970, to put down anti-Vietnam War student demonstrations. President Richard Nixon had announced that America would expand the war in Vietnam to Cambodia. A day later, students at Kent State University in Ohio started protesting. These demonstrations soon escalated into clashes with the police. James Rhodes, Ohio’s governor, called the National Guard in. The guardsmen instructed the protesters to disperse. They did not. Soldiers threw tear-gas; protesters chucked rocks. Eventually the guardsmen opened fire, killing four students. Their deaths prompted large protests and student walk-outs across the country, though in a Gallup poll shortly after the shootings more than half of respondents said the students were to blame, compared with barely a tenth who held the National Guard responsible.
Kent State University shootings, Ohio in 1970
Video: Getty
After this, the public and politicians soured on the idea of calling in the Guard. The next time they were deployed amid unrest in the continental United States was over two decades later. In April 1992 four police officers were acquitted of the beating of Rodney King, a black man, despite it having been caught on film. Enraged Angelenos took to the streets in protest, leading to several days of rioting and 63 deaths. Pete Wilson, California’s governor, deployed the National Guard. Several days later, George H.W. Bush sent several thousand soldiers, marines and federal police, too. More recently, in 2020, dozens of states called in the Guard during nationwide protests against the killing of George Floyd, another black man, by police.
Guard truths
The very public spat between Mr Trump and Mr Newsom has prompted both sides to exaggerate the purpose of the mobilisation. America’s armed forces are not actually carrying out deportations. A longstanding principle of English common law is that troops are prohibited from carrying out domestic law-enforcement operations. In America this was formalised in the Posse Comitatus Act of 1878, which bans the practice unless specifically authorised by Congress or the constitution.
Chart: The Economist
So far, Mr Trump has authorised a limited mission to the 4,000 members of the National Guard under his command that does not involve making arrests. They are to protect federal buildings and personnel. Department of Justice lawyers have long argued that presidents hold this so-called “protective power”. For Mr Trump to assign the guardsmen and recently deployed marines tasks of keeping the peace, he would have to invoke another authority like the Insurrection Act. This law, enacted in 1807, does not require the president to obtain the consent of a state’s governors in order to deploy troops there when “unlawful obstructions, combinations or assemblages, or rebellion against the authority of the United States, make it impractical to enforce the laws”. In such cases, the president can use troops “as he considers necessary to enforce those laws or to suppress the rebellion”.
What is different about Mr Trump’s deployment is that it seems to have inflamed the protesters in the name of keeping the peace. The state of California has filed suit claiming that the president’s actions were illegal. Courts are generally reluctant to restrict presidential actions premised on national security, says Chris Mirasola, a law professor at the University of Houston. But even if they did, Mr Trump could easily invoke the Insurrection Act, which would enable him to go further than he already has. Any ensuing violence would be treated as post-hoc justification for mustering troops in the first place. In such a case, it would also be harder for federal judges to intervene, for instance by declaring that the conditions of “insurrection” or “rebellion” had not been met.
National Guard troops deployed to Downtown Los Angeles on June 9, 2025
Image: Getty Images
Neither Mr Newsom and Mr Trump seem prepared to back down. There is, unfortunately, political upside in a protracted showdown for both men: Mr Newsom is plainly angling to be the next president and picking fights with the current administration burnishes his resistance credentials. Mr Trump would rather fight with his Democratic antagonists over immigration enforcement and imposing law-and-order, which he believes the silent majority backs him on, than reckon with his chaotic tariff policy or faltering diplomatic efforts. The president has extensive powers—ones that he is expected to exercise judiciously, in the interest of the country rather than himself or his party. The question is not whether Mr Trump is acting legally—he probably is—but whether or not he has the self-restraint to act rightly. ■
NORMALLY, GAVIN NEWSOM is loose. The Democratic governor of California talks with a staccato cadence, often flitting from one incomplete thought to the next. When he talks to journalists or asks a guest on his podcast a meandering question, he tends to use a lot of meaningless filler words: “in the context of” is a frequent Newsomism. But on June 10th he was clear and direct. “This brazen abuse of power by a sitting president inflamed a combustible situation,” he said during a televised address after President Donald Trump deployed nearly 5,000 troops to Los Angeles to quell protests over immigration raids. “We do not want our streets militarised by our own armed forces. Not in LA. Not in California. Not anywhere.”
A woman shops at a supermarket on April 30, 2025 in Arlington, Virginia.
Sha Hanting | China News Service | Getty Images
Consumers in the early part of June took a considerably less pessimistic about the economy and potential surges in inflation as progress appeared possible in the global trade war, according to a University of Michigan survey Friday.
The university’s closely watched Surveys of Consumers showed across-the-board rebounds from previously dour readings, while respondents also sharply cut back their outlook for near-term inflation.
For the headline index of consumer sentiment, the gauge was at 60.5, well ahead of the Dow Jones estimate for 54 and a 15.9% increase from a month ago. The current conditions index jumped 8.1%, while the future expectations measure soared 21.9%.
The moves coincided with a softening in the heated rhetoric that has surrounded President Donald Trump’s tariffs. After releasing his April 2 “liberation day” announcement, Trump has eased off the threats and instituted a 90-day negotiation period that appears to be showing progress, particularly with top trade rival China.
“Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” survey director Joanne Hsu said in a statement. “However, consumers still perceive wide-ranging downside risks to the economy.”
To be sure, all of the sentiment indexes were still considerably below their year-ago readings as consumers worry about what impact the tariffs will have on prices, along with a host of other geopolitical concerns.
On inflation, the one-year outlook tumbled from levels not seen since 1981.
The one-year estimate slid to 5.1%, a 1.5 percentage point drop, while the five-year view edged lower to 4.1%, a 0.1 percentage point decrease.
“Consumers’ fears about the potential impact of tariffs on future inflation have softened somewhat in June,” Hsu said. “Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead.”
The Michigan survey, which will be updated at the end of the month, had been an outlier on inflation fears, with other sentiment and market indicators showing the outlook was fairly contained despite the tariff tensions. Earlier this week, the Federal Reserve of New York reported that the one-year view had fallen to 3.2% in May, a 0.4 percentage point drop from the prior month.
At the same time, the Bureau of Labor Statistics this week reported that both producer and consumer prices increase just 0.1% on a monthly basis, pointing toward little upward pressure from the duties. Economists still largely expect the tariffs to show impact in the coming months.
The soft inflation numbers have led Trump and other White House officials to demand the Fed start lowering interest rates again. The central bank is slated to meet next week, with market expectations strongly pointing to no cuts until September.
LONDON, UNITED KINGDOM – MARCH 26, 2025: Britain’s Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street ahead of the announcement of the Spring Statement in the House of Commons in London, United Kingdom on March 26, 2025. (Photo credit should read Wiktor Szymanowicz/Future Publishing via Getty Images)
Britain’s government is planning to ramp up public spending — but market watchers warn the proposals risk sending jitters through the bond market further inflating the country’s $143 billion-a-year interest payments.
U.K. Finance Minister Rachel Reeves on Wednesday announced the government would inject billions of pounds into defense, healthcare, infrastructure, and other areas of the economy, in the coming years. A day later, however, official data showed the U.K. economy shrank by a greater-than-expected 0.3% in April.
Funding public spending in the absence of a growing economy, leaves the government with two options: raise money through taxation, or take on more debt.
One way it can borrow is to issue bonds, known as gilts in the U.K., into the public market. By purchasing gilts, investors are essentially lending money to the government, with the yield on the bond representing the return the investor can expect to receive.
Gilt yields and prices move in opposite directions — so rising prices move yields lower, and vice versa. This year, gilt yields have seen volatile moves, with investors sensitive to geopolitical and macroeconomic instability.
Official estimates show the government is expected to spend more than £105 billion ($142.9 billion) paying interest on its national debt in the 2025 fiscal year — £9.4 billion higher than at the the time of the Autumn budget last year — and £111 billion in annual interest in 2026.
The government did not say on Wednesday how its newly unveiled spending hikes will be funded, and did not respond to CNBC’s request for comment about where the money will come from. However, in her Autumn Budget last year, Reeves outlined plans to hike both taxes and borrowing. Following the budget, the finance minister pledged not to raise taxes again during the current Labour government’s term in office, saying that the government “won’t have to do a budget like this ever again.”
Andrew Goodwin, chief U.K. economist at Oxford Economics, said Britain’s government may be forced to go even further with its spending plans, with NATO poised to hike its defense spending target for member states to 5% of GDP, and once a U-turn on winter fuel payments for the elderly and other possible welfare reforms are factored in.
Additionally, Goodwin said, the U.K.’s Office for Budget Responsibility is likely to make “unfavorable revisions” to its economic forecasts in July, which would lead to lower tax receipts and higher borrowing.
“If recent movements in financial market pricing hold, debt servicing costs will be around £2.5bn ($3.4 billion) higher than they were at the time of the Spring Statement,” Goodwin warned in a note on Wednesday.
‘Very fragile situation’
Mel Stride, who serves as the shadow Chancellor in the U.K.’s opposition government, told CNBC’s “Squawk Box Europe” on Thursday that the Spending Review raised questions about whether “a huge amount of borrowing” will be involved in funding the government’s fiscal strategies.
“[Government] borrowing is having consequences in terms of higher inflation in the U.K. … and therefore interest rates [are] higher for longer,” he said. “It’s adding to the debt mountain, the servicing costs upon which are running at 100 billion [pounds] a year, that’s twice what we spend on defense.”
“I’m afraid the overall economy is in a very weak position to withstand the kind of spending and borrowing that this government is announcing,” Stride added.
Stride argued that Reeves will “almost certainly” have to raise taxes again in her next budget announcement due in the autumn.
“We’ve ended up in a very fragile situation, particularly when you’ve got the tariffs around the world,” he said.
Rufaro Chiriseri, head of fixed income for the British Isles at RBC Wealth Management, told CNBC that rising borrowing costs were putting Reeves’ “already small fiscal headroom at risk.”
“This reduced headroom could create a snowball effect, as investors could potentially become nervous to hold UK debt, which could lead to a further selloff until fiscal stability is restored,” he said.
Iain Barnes, Chief Investment Officer at Netwealth, also told CNBC on Thursday that the U.K. was in “a state of fiscal fragility, so room for manoeuvre is limited.”
“The market knows that if growth disappoints, then this year’s Budget may have to deliver higher taxes and increased borrowing to fund spending plans,” Barnes said.
However, April LaRusse, head of investment specialists at Insight Investment, argued there were ways for debt servicing burdens to be kept under control.
The U.K.’s Debt Management Office, which issues gilts, has scope to reshape issuance patters — the maturity and type of gilts issued — to help the government get its borrowing costs under control, she said.
“With the average yield on the 1-10 year gilts at c4% and the yield on the 15 year + gilts at 5.2% yield, there is scope to make the debt financing costs more affordable,” she explained.
However, LaRusse noted that debt interest payments for the U.K. government were estimated to reach the equivalent of around 3.5% of GDP this fiscal year, and that overspending could worsen the burden.
“This increase is driven not only by higher interest rates, which gradually translate into higher coupon payments, but also by elevated levels of government spending, compounding the fiscal burden,” she said.