The Back-Channel Diplomacy Behind Trump’s U-Turn on Iran

Foreign ministers from Egypt, Turkey, Saudi Arabia and Pakistan gathered before dawn Thursday in Riyadh for talks aimed at finding a diplomatic off-ramp to the war in Iran.

But there was one big problem, according to Arab officials involved in the discussions: finding a counterpart in Iran to negotiate with. Earlier that week, Israel killed Iran’s national security chief, Ali Larijani, who had been considered a viable partner who could engage with the West.

Egyptian intelligence officials managed to open a channel with Iran’s Islamic Revolutionary Guard Corps—the paramilitary group that protects the Iranian regime and is the country’s most powerful security and political entity—and put forward a proposal to halt hostilities for five days to build confidence for a cease-fire, some of the officials said.

Those discussions laid the groundwork for an abrupt reversal more than 7,000 miles away in Florida.

On Saturday night, President Trump, who spent the weekend at his Mar-a-Lago club, gave Iran an ultimatum to reopen the Strait of Hormuz within 48 hours or the U.S. military would “obliterate” the country’s power plants. Two days later, as word of the discussions in Riyadh made its way to the White House, Trump reversed course, embracing diplomacy with Tehran and putting his threatened strikes on hold.

Trump’s shift Monday morning followed a series of closed-door discussions—through Middle Eastern intermediaries—that U.S. officials said gave them hope an agreement to settle the conflict was possible. It also reflected a growing desire by Trump and some of his advisers to bring the war to a close, according to people familiar with the matter, as the president faces political and economic fallout from the conflict.

“These are sensitive diplomatic discussions, and the U.S. will not negotiate through the press,” said White House press secretary Karoline Leavitt. “This is a fluid situation, and speculation about meetings should not be deemed as final until they are formally announced by the White House.” (…)

The US will not negotiate through the press and we should all wait for formal White House announcements.

But what was Trump’s “Truth Social” post yesterday morning, followed by his other statements:

• “very good and productive conversations” with a “top” Iranian leader with “the two sides having major points of agreement”.
• Steve Witkoff and Jared Kushner began the talks Sunday.
• “They called. I didn’t call,” Trump said.
• “this time, they mean business”.
• Trump added that discussions with Iran “started last night [Sunday], a little bit, the night before that.” (He probably meant discussions with regional countries…).
• “There’s automatically a regime change, but we’re dealing with some people that I find to be very reasonable, very solid. Maybe one of them will be exactly what we’re looking for. Look at Venezuela, how well that’s working out.”

What the WSJ omitted:

• Iran’s speaker of parliament Mohammad Bagher Ghalibaf, presumed to be the “top Iranian leader” wrote on X that in fact “no negotiations have been held with the US”.
• “Yes, there are initiatives from regional countries to reduce tensions, and our response to all of them is clear: We are not the party that started this war, and all these requests should be referred to Washington,” Iran’s Foreign Ministry said, according to state broadcaster IRIB.
• “Over the past few days, messages were received via certain friendly states conveying the US request for negotiations to end the war,” Esmaeil Baqaei, the foreign ministry’s spokesperson, told official news agency IRNA.
• People briefed on the matter said the diplomatic efforts involved very early-stage messaging, rather than a formal process.
• Hours after President Trump said the U.S. and Iran are talking, the Iranian Foreign Ministry spokesman said there have been no negotiations during the conflict but added that “messages have been received” from the U.S. in recent days requesting “negotiations to end the war.” “Iranian people demand complete and remorseful punishment of the aggressors,” he wrote in English in a post on X. “No negotiations have been held with the US, and fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.”
• Middle Eastern intermediators said the gaps between the parties remain enormous and that progress remains fleeting. Arab officials said they have been talking separately with both sides, but that Iran has set a high bar for ending hostilities that is preventing discussions from gaining traction.

That said, or not said as said it was said, we now know some of Trump’s off-ramps:

1. Arab mediators have proposed putting the strategic waterway under the control of a neutral, regional committee to allow all ships to pass through, they said. Iran’s Islamic Revolutionary Guard Corps demanded a new order for the Strait of Hormuz that would allow Iran to collect fees from ships that transit the waterway, as Egypt does now with the Suez Canal, those people said.
2. Trump told us that the regime change has already been achieved: “A deal would also include regime change, Trump said, noting how many top Iranian officials have been killed. “We’re dealing with some people that I find to be very reasonable, very solid,” he said. “Maybe one of them will be exactly what we’re looking for. Look at Venezuela, how well that’s working out.”

Trump will no doubt support GCC-Iran collecting fees for a Hormuz passage. Remember his “We don’t even need the Strait of Hormuz”. The fees would be paid by EU and Asian countries.

But the rest will be more difficult: “The Revolutionary Guard also demanded guarantees the war wouldn’t restart, an end to Israel’s strikes on the Iran-aligned Lebanese militia Hezbollah, closing of U.S. bases in the Gulf and compensation for damage done to Iran during the war, those people said.”

The Economist:

(…) But Mr Trump’s climbdown could also signal a divergence in American and Israeli war aims. Israel sees this war as a crucial step towards neutralising Iran’s military threat, its nuclear-and ballistic-missile programmes and support for proxies in the region, an objective it believes can only be achieved through regime change.

Mr Trump has at times appeared to share these aims. But recently he has appeared more concerned with ensuring that oil flows out of the Gulf. He has twice criticised Israel during the war, both times after Israeli jets bombed targets related to Iran’s energy industry.

Mr Trump’s focus seems increasingly to be on averting a global energy crisis for which he would be blamed, including by trying to make a deal with whatever remains of Iran’s regime. Israel thus faces the prospect that the war will end without the attainment of the main objective stated by Binyamin Netanyahu, its prime minister: to prepare the ground for a popular uprising that would topple the Iranian regime. (…)

The war’s unexpectedly long duration, as well as Mr Trump’s latest climbdown, undermine the idea that Iran’s regime is fragile and that regime change is possible. Instead, it is looking more likely that the ill-judged campaign will either drag on or end messily, with an Iran that is battered but defiant, and still able to inflict considerable damage on the region and the world.

Unintended consequences…

Marcos Says War May Spur Energy Talks With China in Disputed Sea

Philippine President Ferdinand Marcos Jr. is open to restarting talks with Beijing on a joint oil and gas project in a disputed area of the South China Sea, saying the war in Iran may provide the impetus for a breakthrough.

Marcos and Chinese President Xi Jinping in 2023 agreed to resume discussions on a joint oil and gas development in the waterway, which had been stalled for years.

“That’s something we’ve been talking about for a great deal, but territorial disputes are getting in the way of that,” Marcos said in an interview with Bloomberg Television’s Haslinda Amin on Tuesday at the presidential palace in Manila, when asked about the possibility of discussions with Beijing.

“Maybe this provides impetus for both sides to come to an agreement,” Marcos, 68, said, referring to the conflict in the Middle East. “That’s something we are exploring. Everything that might be of help, we are certainly pursuing.”

The remarks signal a possible further easing of tensions between the Philippines and China, which had ramped up after Marcos took office in 2022. Marcos had bolstered military ties with the US to help safeguard the nation’s claims in the South China Sea, leading to repeated clashes with Chinese ships deploying water cannons against Philippine ships and crew. (…)

The Philippines is also in talks with China on fuel and fertilizer, according to Marcos. (…)

The Philippines is exploring the possibility of sourcing crude oil from Russia too, Marcos added. (…)

Other consequences…

“Contracts representing millions of barrels of oil changed hands about 15 minutes before Trump’s post yesterday that sent crude prices tumbling by as much as 14%.

Futures corresponding to at least 6 million barrels traded in the two minutes from 6:49 a.m. in Washington, exchange data shows. The average for the same time period over the previous five trading days was about 700,000 barrels. Trump’s Truth Social post was published at around 7:05 a.m.

The FT did the calculation:

The notional value of those trades was $580mn, according to FT calculations based on Bloomberg data. (…)

The well-timed trades echoed the flurry of large highly profitable bets made on prediction market Polymarket on the timing of the US’s attacks in recent months on Iran and Venezuela.

“It’s hard to prove causality . . . but you have to wonder who would have been relatively aggressive at selling futures at that point, 15 minutes before Trump’s post,” said a market strategist at a US broker, referring to Monday’s trades. (…)

Several hedge funds noted that this was one of a number of examples in recent months of large trades being made ahead of official US government announcements.

One trader at a major hedge fund said energy consultants had recently noticed several large block trades that they found to be unusually timed. Another portfolio manager said a series of large and well-timed trades had created a “level of frustration” among investors.

“My gut from watching markets for the last 25 years is this is really abnormal,” he added. “It’s Monday morning, there’s no important data today, there aren’t any Fed speakers you’d want to front run. It’s an unusually large trade for a day with no event risk . . . Somebody just got a lot richer.” (…)

Tim Skirrow, head of derivatives at the consultancy Energy Aspects, said: “That is a larger than usual volume [in Brent and WTI] than I would expect at that time of day, but in the same breath it’s not excessively large. I find it a bit hard to join the dots here.”

He added that the Brent futures and options markets had seen “significant inflows” from funds over recent weeks. “Given the price reaction, it seems that nearly everyone was long. This is almost a necessary precursor for such a violent move.”

Mere coincidence? Some people made a lot of money, but some others lost a lot of money. The latter group might want to understand … Let’s see if the SEC will want (dare?) to look into that.

Friday, in less than 3 hours:

• CBS News reported that President Trump was considering “boots on the ground” in Iran.
• Trump said “I don’t want to do a ceasefire with Iran,”
• Trump Says US Considers ‘Winding Down’

Until the 48-hour ultimatum…

Until this morning, just as markets were slumping:

Trump Postpones Strikes on Iran Energy Targets

I AM PLEASE TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.

BASED ON THE TENOR AND TONE OF THESE IN DEPTH, DETAILED, AND CONSTRUCTIVE CONVERSATIONS, WITCH WILL CONTINUE THROUGHOUT THE WEEK, I HAVE INSTRUCTED THE DEPARTMENT OF WAR TO POSTPONE ANY AND ALL MILITARY STRIKES AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE DAY PERIOD, SUBJECT TO THE SUCCESS OF THE ONGOING MEETINGS AND DISCUSSIONS.

THANK YOU FOR YOUR ATTENTION TO THIS MATTER! PRESIDENT DONALD J. TRUMP

No mention of Israel…

Mideast on Edge Ahead of Trump’s Hormuz Deadline The president told Tehran to reopen the Strait of Hormuz or face strikes on its power plants. Iran pushed back.

• At least 40 energy assets have been severely damaged across nine countries since the Middle East conflict began, International Energy Agency Executive Director Fatih Birol said, as the agency consults with governments on whether more emergency oil reserves should be released to shore up supply. Birol cautioned that it would take some time to return supply from oil and natural-gas fields, refineries and pipelines in the region to levels before the conflict began.
• Gulf Arab countries are warning the U.S. administration that targeting Iran’s power plants would invite reprisals from the Persian country, putting their energy and water facilities at risk and endangering the world economy, according to officials familiar with the matter.

Officials from several Gulf states have been angry for days that they don’t have any influence with the U.S. administration despite heavy investments of time and money, the officials said.

Multiple attempts by Arab officials to start peace talks with Iran and the U.S. have failed because Iran’s demands to end the war are too high, they said. The demands by Iran include compensation, guarantees that the war won’t be restarted and an end to American military bases in the Gulf, they added.

• The Islamic Revolutionary Guard Corps also warned on Monday that any strike on Iranian power plants would trigger reciprocal attacks on electricity facilities in the region and in Israel that are linked to US interests, including those supplying military bases. Economic assets — including US financial interests — alongside industrial and energy infrastructure would also be targeted, the elite force added.
• The council said any hostile action against Iranian territory would trigger the mining of key maritime routes, including deployable sea mines — in effect extending the situation in the Strait of Hormuz across the entire Gulf.
• Treasury Secretary Scott Bessent said that the U.S. must “escalate to de-escalate” when asked whether the president plans to slow the war in Iran.
• “If we are going to take down this regime, we want to leave everything in the country intact so that the people who come after this regime are going to be able to rebuild and reconstitute,” Michael Leiter, Israel’s ambassador to the U.S. said, before adding, “If we leave this regime in place, we want to take down all the infrastructure.”
• Iranian missile strikes have wounded about 200 people in southern Israel, after air defence systems failed to intercept projectiles that hit two cities close to a nuclear facility. Earlier in the evening, Iranian state-linked media said the strikes on Dimona were carried out in response to alleged attacks by the US and Israel on nuclear facilities in Bushehr and Natanz. The Israeli military denied it was behind the Natanz strike. Dimona hosts a facility widely believed to be the site of the Middle East’s only nuclear arsenal, although Israel has never admitted to possessing nuclear weapons.
• The Israeli air force said it had opened an investigation into the apparent failure to intercept the missile that struck Arad. “The air defence systems operated but did not intercept the missile.

***

$5 Diesel is Crushing Truckers. It Will Soon Be Felt Across the Economy.

(…) The average gallon of diesel crossed $5.20 nationwide on Saturday, up around 40% from a month ago, according to the AAA. (…)

For most freight companies, a 40% surge in the price of diesel results in an overall cost increase of around 10%, said Erich Muehlegger, an economist at the University of California, Davis. The diesel price spike from Russia’s invasion of Ukraine in 2022, for instance, contributed to a significant increase in the cost of milk for consumers in California, according to UC Davis research.

Diesel is also used to power machinery used by the fishing, farming and construction industries, such as tractors and cranes. The higher costs those companies are beginning to pay won’t be felt by consumers immediately, but they have already begun to pass through the supply chain, Muehlegger said. (…)

China touts itself as ‘harbour of stability’ to global CEOs Premier Li Qiang paints contrast to US at business gathering in Beijing as Donald Trump gets bogged down in Iran

Premier Li Qiang told more than 70 chief executives gathered in the Diaoyutai State Guesthouse for the government’s annual Davos-style forum that the world’s second-largest economy offered an unmatched supply chain and a predictable commercial environment.

The country was committed to being a “cornerstone of certainty” and a “harbour of stability” in the face of rising trade protectionism and upheaval in the rules-based international order, said Li.

“China will unswervingly promote high-level opening up to the outside, import more high-quality foreign goods and work with all parties to promote the optimised and balanced development of trade, jointly expanding the global economic and trade pie,” he told the audience. (…)

“Li didn’t name America . . . but the message is clear that China is now safer, more reliable and stable, and more focused on economic development rather than conflicts,” said George Chen, a partner at the Asia Group consultancy who was present at the meeting. (…)

US executives were well represented this year, accounting for 45 per cent of invitees, according to an analysis by Han Shen Lin of the Asia Group. Europeans made up 36 per cent with the remainder from Asia, Australia and elsewhere. (…)

The war in Iran is ripping up the Gulf’s plan for stability

(…) For governments in Riyadh, Abu Dhabi, Doha and elsewhere, this moment is particularly unsettling because it is disrupting a strategy they have spent decades trying to build. Gulf states have sought to shield themselves from the region’s cycles of conflict through a mix of economic diversification, diplomatic engagement and carefully managed security partnerships. That strategy rested on three pillars: reliance on US security guarantees, cautious outreach to Iran and expanding economic ties with Israel. The war is revealing the fragile foundations of all three. (…)

These developments carry particular significance at a moment when Gulf governments are attempting to transform their economic models. Saudi Arabia’s Vision 2030 projects, the role of the United Arab Emirates (UAE) as a global aviation and logistics hub, and the region’s broader push into tourism, finance and technology all depend on one essential factor: stability. War threatens precisely the reputation these states have spent years trying to cultivate.

At the same time, the crisis is exposing the limits of the Gulf’s longstanding reliance on the United States as its ultimate security guarantor. For decades, the US military presence in the region has been the cornerstone of Gulf defence strategy. US airbases dot the region and Washington remains the primary supplier of advanced weapons systems.

Yet the current confrontation also reveals the asymmetry built into that arrangement. When Washington escalates tensions with Iran or backs Israeli military operations, it does so according to its own strategic calculations. The Gulf states, by contrast, are left to manage the consequences that are now affecting their cities, citizens, economies and infrastructure.

In response to these vulnerabilities, Gulf governments have spent recent years trying to diversify their diplomatic relationships. The Chinese-brokered rapprochement between Saudi Arabia and Iran in 2023 reflected a broader regional effort to reduce tensions and avoid direct confrontation. The UAE reopened diplomatic channels with Tehran, while Qatar and Oman continued to maintain dialogue with Iranian officials.

These initiatives reflected a pragmatic recognition that stability in the Gulf ultimately requires some form of coexistence with Iran. Yet the current war is demonstrating the limits of that strategy. Even when Gulf states seek to lower tensions with Tehran, they cannot insulate themselves from escalating confrontation between Iran and Israel or the US.

In recent years, several Gulf states expanded ties with Israel, most visibly through the Abraham accords, which promised economic cooperation and technological exchange. But the political context of the current war is making open alignment with Israeli military objectives increasingly difficult.

This new war is unfolding alongside the devastation of Gaza and the continued erosion of Palestinian political prospects in the West Bank. These developments are profoundly shaping regional public opinion and placing clear limits on how closely Gulf governments navigate dynamics with Israel. Any offensive military posture would probably be perceived domestically as support for Israel.

Further escalation by attacks on energy infrastructure now carries serious and immediate risks for the Gulf. While they are deeply concerned about the costs of continued war, they are equally wary of its outcome.

They know that a significantly weakened Islamic Republic would not produce the stability that they need, and that over time Iran could become more fragmented and unstable. Leaving the Islamic Republic to control the strait of Hormuz is also an untenable outcome. At the same time, allowing the war to run its course could entrench a longer, more volatile conflict environment in which Gulf states remain exposed to both Iranian retaliation and the broader consequences of regional instability.

Despite years of diplomatic diversification and strategic hedging, Gulf leaders find themselves confronting a familiar reality where the region remains vulnerable to conflicts and threats shaped elsewhere. Many officials already see the current confrontation as the fourth major war in the Gulf since the 1980s, after the Iran-Iraq war, the 1991 Gulf war and the 2003 invasion of Iraq. Yet unlike those earlier conflicts, the current confrontation involves multiple theatres, powerful regional actors and a network of non-state forces.

The crisis may nevertheless carry an important lesson. It strengthens the case for deeper Gulf defence integration. Coordinated air-defence networks between the states, shared early-warning systems and closer maritime security cooperation could help reduce vulnerabilities.

But military coordination alone cannot provide lasting stability. The region’s security challenges remain tied to unresolved conflicts that continue to drive cycles of escalation across the Middle East from Yemen to Gaza, Lebanon and now Iran.

For Gulf states, the immediate priority is to contain escalation and avoid further strikes on energy and infrastructure.

But the more consequential challenge lies in shaping the endgame. Neither a prolonged war nor a significantly weakened Iran offers a path to stability. Both scenarios risk producing a more fragmented and unpredictable regional order, with continued threats to Gulf security. This requires sustained and proactive diplomatic engagement aimed not only at limiting escalation, but shaping its trajectory to avoid a prolonged and more dangerous regional order.

Recent Trump threats to Iran have all been followed with Iranian threats to retaliate against GCC countries (Gulf Cooperation Council). Trump’s “winding down” idea would see the US simply retreating back home leaving the GCCs and all other countries “in charge” of dealing with the mess it and Israel created.

There is no military end game here. The diplomatic leverage is with the GCCs and China “smartly” talking the US and Iran out of this unbridled catastrophe even if it leaves Israel isolated and the only one unable to claim victory.

Cuba Says Its Military Is Prepared as Trump’s Threats Multiply

A senior Cuban official said the country is preparing for a possible military assault as President Donald Trump increases economic pressure on the government in Havana and suggests it could be the next US target after Venezuela and Iran. (…)

“The nature of the Cuban government, the structure of the Cuban government, and the members of the Cuban government are not part of the negotiation,” he told NBC. (…)

TECHNICALS WATCH

I am not a trader nor a technician but I watch a few reasonably good technical indicators and sometime trade on them.

Callum Thomas illustrates the risk:

Drawdown in Context: worth keeping in mind, 5-10% sell-offs are very common, 10-20% corrections at not uncommon, and 30%+ drops happen ~once per decade (you will likely see multiple of them during your lifetime). And another thing, not all sell-offs turn into bear markets, but all bear markets start as a sell-off!

BTW, European stocks fell in early trading today , with the Stoxx Europe 600 index down 1.7% and more than 10% lower than its pre-conflict high.

Ned Davis’ “Don’t Fight the Tape or the Fed Indicator” is a -2

Ned Davis Research

S&P 500 Large Cap Index 13/34 Weekly EMA:

This is the LT chart via Tradingview.com for perspective. Bullish when the blue 13-week smoothed moving average (MA) trend line rises above the 34-week smoothed MA trend line (green arrows). Bearish trend is signaled when the blue line drops below the red line.

Not totally fool proof and sometimes requiring ST trading but useful to identify trends.

Here’s a close-up. Not there yet but needs watching:

I also use the EMA for individual stocks. FYI:

JPM

AMZN

NVDA

Contrarians?

• The Fear & Greed Index is down to 14.6, the lowest since November and down -50.9 points since January. This is now well below the 30-point threshold, signaling “Extreme Fear” among investors. Over the last 4 years, such depressed levels have only been seen in November 2025, April 2025, following the Liberation Day sell-off, and during the 2022 bear market. Each of these readings marked a significant market turning point or at least a bear market rally. (@KobeissiLetter)

• The historical playbook is for a sharp selloff of about -6% to -8% but a bottom on average in 3 weeks, and a full recovery in another 3, usually long before the underlying escalation is resolved. The current selloff is in the vicinity of a typical bottom in size and timing. Equities remain glued to oil prices and we look for a drop in oil price volatility from extremes as a marker of escalations starting to get priced in. (@neilksethi)

Goldman Sachs today:

Our commodity strategists now assume that the Strait of Hormuz will remain closed until mid-April. They have pushed out the peak in Brent prices accordingly and now see a slower subsequent decline, as strategic reserves and other storage will need to be refilled. Moreover, the risks remain heavily skewed toward worse outcomes that feature much higher prices, both for the peak and the longer term. In a severely adverse scenario, damage to energy infrastructure reduces global production capacity for years to come.

Higher energy prices will boost global headline inflation sharply in the next 1-2 months. Although the impact should partly reverse once the Strait does reopen, our country-specific rules of thumb imply that the shock will add 0.8pp to global headline inflation over the next year under our baseline and 2pp under our severely adverse scenario. Our estimates are biggest in Europe because of the added shock to home heating costs and power bills from higher natural gas prices, and smallest in China which relies more on coal and electricity than on oil and gas in transportation and home heating.

 

Our rules of thumb imply that the impact on global core inflation should be far smaller, ranging from 0.2pp under our baseline to 0.5pp under our severely adverse scenario. While many bond market investors worry that the inflation shock will broaden quickly, as it did in 2021, we see more parallels with previous shocks that remained largely confined to headline, such as 1990-91, 2000, and 2011. First, the current supply disruptions are heavily concentrated in Middle Eastern energy, whereas the supply disruptions of 2021 were spread across a broad range of manufacturing and service industries. Second, global demand growth remains moderate, whereas demand surged in 2021 on the back of extremely expansionary monetary and fiscal policies.

Another reason why core inflation should remain well-behaved is that higher energy prices will hit real income, GDP and employment, thus limiting the risk of a wage-price spiral.

Even with the drag from tariffs fading, we now expect US GDP to rise just 1¼-1¾% (annualized) in H2. This doesn’t sound too bad on its own but is clearly below our potential GDP growth estimate, which has risen to 2.3% on the back of the pickup in trend productivity growth.

Below-trend growth is likely to push up the unemployment rate, which we now expect to reach 4.6% under our baseline energy price forecast and 4.8-4.9% in the severely adverse scenario. And while the labor market effects of AI have remained modest so far, we do expect them to increase in 2026 and beyond and see a risk that they will interact with cyclical labor market weakness to produce a bigger unemployment increase. After all, past automation cycles have often accelerated significantly during recessions, when firms are under greater pressure to identify efficiencies. Recession is not our base case, but we have nudged our 12-month forward probability up to 30%, back to where it was for most of 2025H2.

Assuming a ¼pp energy impact, we have raised our core PCE inflation forecast slightly further to 2.5% by yearend, but this still implies 50bp of core disinflation from here.

The near-term equity market outlook depends more squarely on deescalation, but our equity strategists still view the longer-term fundamentals—strong profitability, improving productivity trends, and low core inflation—as inconsistent with a bear market. Lastly, our FX strategists note that the trade-weighted US dollar is roughly flat year-to-date as markets ask whether the Middle East conflict is merely some turbulence on the dollar’s descent or a more lasting change in the flight plan. They still forecast the descent to resume, but think this won’t happen until deescalation sets in.

Robert Mueller, Former FBI Chief Who Led Trump-Russia Probe, Dies at 81

“Robert Mueller just died,” Trump responded quickly on his Truth Social platform. “Good, I’m glad he’s dead. He can no longer hurt innocent people!” (…)

His hardline supporters again raced to his defence on Saturday. Laura Loomer, a far-right activist and conspiracy theorist, wrote on X: “President Trump says what everyone is thinking. He’s right. We shouldn’t be sad when bad people die.” (…)

There were also reflections on the contrast between Trump, who received five deferments from the Vietnam draft – four for university and one for “heel spurs” – and Mueller, who served in the marines and was wounded and decorated for heroism in Vietnam. (…)

Mueller, who had led the FBI for 12 years, was later tapped as a special counsel for the justice department to lead an investigation into whether Trump’s presidential campaign conspired with Russia to get him elected. The 22-month inquiry produced indictments against 34 people, including several Trump associates, and a series of guilty pleas and convictions. But Mueller ultimately stopped short of a criminal indictment of the sitting president, bitterly disappointing many Democrats.

God bless America!

Although…