Axios reported that US and Iranian negotiators reached a draft 60-day memorandum of understanding to extend the ceasefire and open talks on Iran’s nuclear program, although President Donald Trump has yet to approve the agreement.
The report followed overnight US airstrikes on an Iranian military site near the Strait of Hormuz, the critical energy shipping route that has dominated macro traders’ attention in recent months.
Although traders have lost count of the number of impending Middle East peace deals at this point, they are still bidding stocks and bonds higher and oil lower on the Axios report. In the red earlier in the session, the Nasdaq is now up 0.6%, while WTI crude has fallen below $90 a barrel.
However, crypto markets are still locked in with bitcoin failing to hold even the modest bumps higher, now falling back below 73,000, down 2.7% over the past 24 hours.
Following the Axios story, Treasury Secretary Scott Bessent warned that the US “would not tolerate” any attempt to impose tolls on shipping through the Strait of Hormuz, and promised aggressive sanctions against parties involved in disrupting commercial transit through the main waterway. “Oman in particular should know that the US Treasury Department will aggressively target all actors involved – directly or indirectly – in facilitating strait tolls, and all willing partners will be punished,” he wrote.
The Fed’s preferred inflation gauge hits the highest level since 2023
The first inflation report released under Federal Reserve Chairman Kevin Warsh showed price pressures strengthened in April, with the Fed’s preferred inflation gauge, the Personal Consumption Expenditure Index (PCE), rising to the highest level in nearly three years to 3.8% year over year, up from 2.8% in February.
“The inflation picture is becoming increasingly uncomfortable for the Fed. This is not just a headline inflation problem: Core inflation is also moving in the wrong direction,” said Olu Sonola, head of US economics at Fitch Ratings. “Price pressures are likely to continue over the next few months, and while the Fed can’t fix a supply shock, it can’t ignore one that feeds into underlying inflation. The Fed is stuck — and the heat is clearly being turned up.”
