Good morning. Years of sanctions, repression and economic mismanagement have left Iranian protestors with little to lose – more on that below, along with an Olympics sabotage scandal and the hunt for Canadian words. But first:

• Trump’s escalating attack on the Fed draws pushback but a muted market reaction
• Two Liberal MPs cut their Taiwan trip short ahead of Carney’s China visit
• Ottawa’s debt writeoffs climb above the $5-billion mark

The protests began in Tehran’s bazaars: A modest number of merchants, fed up with a national currency in freefall, shuttered their shops on Dec. 28 and took to the streets. Quickly, though, the demonstrations spread across Iran, exploding into a broader attack on Supreme Leader Ayatollah Ali Khamenei’s theocratic regime. Large crowds started chanting “death to the dictator.” They’ve assembled in each of the country’s 31 provinces – on university campuses, in poorer rural areas, even in Mashhad, Iran’s holiest city and Khamenei’s hometown.

Security forces responded with a sharp escalation of violence over the weekend. At least 646 protestors have now been killed, according to the U.S.-based Human Rights Activists News Agency, with more than 10,000 arrested – but it’s hard to confirm the extent of the crackdown. Iran had been mostly dark since last Thursday, when the government cut off both the internet and international phone calls, though Iranians could make some calls to the outside world this morning for the first time in days.

Khamenei is one of the world’s longest-ruling dictators; he has weathered massive protest movements before. Most recently, in 2022, his regime brutally suppressed the nationwide demonstrations set off by the police killing of Mahsa Amini, who was arrested for allegedly violating mandatory hijab laws.

But decades of social repression are now colliding with widespread economic pain, giving the current movement a scale and ferocity unseen in previous instances of unrest. And that makes Iran’s protests feel different this time around.

Out of options

The Islamic Republic spent billions building up a network of regional allies that collapsed comprehensively in the past year. The Assad regime is over in Syria. Israel decimated two of Iran’s most useful partners, Hezbollah in Lebanon and Hamas in Gaza, before killing many of Khamenei’s top commanders in the 12-day war last June.

The money spent on foreign proxies is much needed at home. Western sanctions over Iran’s nuclear program, as well as internal corruption and mismanagement, have crippled the country’s economy. The value of its currency has plummeted, wiping out people’s savings. In 1979, one U.S. dollar was worth about 70 Iranian rials; it’s worth 1.47 million rials today. The inflation rate is more than 50 per cent – and 70 per cent for food. With prices rising daily, businesses have had to shut down.

Unlike previous economic crises, however, this one is felt by pretty much everyone outside the ruling elite, bringing working- and middle-class protesters alike out onto the streets. Last week, Iranian President Masoud Pezeshkian tried offering cash stipends of US$7 a month to quell their anger. It’s made little difference: that money only buys a kilogram of red meat at local markets right now.

Enter Trump?

Some demonstrators have voiced their support for the deposed Shah’s son, former crown prince Reza Pahlavi, who has spent nearly half a century in exile from Iran. On Sunday, Pahlavi urged Donald Trump to intervene on behalf of the mass protest movement – taking his appeal directly to the U.S. President’s preferred TV network, Fox News.

At one point, it seemed like Trump was prepared to come to their aid, posting on Truth Social earlier this month that the U.S. was “locked and loaded and ready to go” if Iran used deadly force against protesters. The White House dialled down that rhetoric considerably yesterday. “Diplomacy is always the first option for the president,” press secretary Karoline Leavitt told reporters. Airstrikes are simply “one of the many, many options on the table.”

U.S officials will reportedly brief Trump on those options later today – could be cyber attacks, or maybe stepped-up sanctions, or tariffs on countries doing business with the regime. The President may have posted that “Iran is looking at FREEDOM, perhaps like never before” and that the “USA stands ready to help!!!” But it’s unclear if his appetite for toppling strongmen reaches all the way to Tehran.

Canada’s skeleton team denied accusations that its coach sabotaged a U.S. star’s chances to qualify for the Olympics. Read the latest on the dust-up here.