Axios reported that U.S. and Iranian negotiators reached a draft 60-day memorandum of understanding to extend the ceasefire and begin talks on Iran’s nuclear program, although President Donald Trump has not yet approved the deal.
The report followed overnight US airstrikes on an Iranian military site near the Strait of Hormuz, the critical energy transportation route that has dominated the attention of macro traders in recent months.
Although traders have at this point lost count of the number of impending peace deals in the Middle East, they continue to bid stocks and bonds higher and oil lower following the Axios report. In the red earlier in the session, the Nasdaq is now up 0.6%, while WTI crude oil has fallen below $90 per barrel.
Crypto markets, however, remain stagnant, with bitcoin Failing to sustain even the modest gains, it has now fallen back below 73,000, down 2.7% in the last 24 hours.
Following the Axios story, Treasury Secretary Scott Bessent warned that the United States “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 key waterway. “Oman, in particular, should know that the US Treasury will aggressively target any actor involved – directly or indirectly – in facilitating cross-strait tolls and any willing partner will be penalized,” he wrote.
Fed’s preferred inflation gauge hits highest level since 2023
The first inflation report released under Federal Reserve Chairman Kevin Warsh showed price pressures strengthening in April, with the Fed’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) Index, rising to its highest level in nearly three years at 3.8% year over year, up from 2.8% in February.
“The inflation picture is becoming increasingly uncomfortable for the Federal Reserve. This is not just a general 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 persist for months to come, and while the Fed can’t fix a supply shock, it can’t ignore one that’s fueling core inflation. The Fed is in a rut, and pressure is clearly building.”
