US and Iran agree 2-week ceasefire that will open Strait of Hormuz Donald Trump says 10-point plan from Iran is ‘workable basis’ for negotiations
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Iran’s foreign minister Abbas Araghchi confirmed that Tehran
would allow two weeks of “safe passage” through the waterway while negotiations
on a permanent deal began. -
In a Truth Social post on Wednesday, Trump said that the US
would be “helping with the traffic build up” in the strait, adding that “Big
money” would be made. -
Trump claimed that “almost all of the various points of past
contention have been agreed to between the United States and Iran”. -
Iran’s leaders said in a statement that the Americans had
accepted the “principles” of their 10-point plan “as the basis of
negotiations”. -
As well as Iran’s continued control over the strait, Tehran has called for the full cessation of hostilities by the US and Israel against Iran and its “Axis of Resistance”, which includes proxy groups such as Lebanon’s Hizbollah.
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It also calls for “the withdrawal of United States combat forces from all bases and points of deployment within the region”, the Supreme National Security Council said in its statement.
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Iran said it would participate in the talks for a maximum of 15 days. Araghchi, who led two previous rounds of indirect talks with the US before the start of the war on February 28, is expected to serve as Iran’s top negotiator in Islamabad.
- Two sources said Khamenei giving the negotiators his blessing to cut a deal was the “breakthrough.” All major decisions the past two days went through Khamenei. “Without his green light, there wouldn’t have been a deal,” the regional source said.
- A senior Israeli official told Axios that Netanyahu had received assurances the U.S. would insist in peace talks that Iran give up its nuclear material, cease enrichment, and abandon its ballistic missile threat.
A few more details from the FT which had the best account I have seen:
- the Islamic regime announced it had accepted the ceasefire, and would allow safe passage through the strait “via coordination” with Iran’s military — the very force holding the waterway hostage.
- But another factor will also have been crucial to Tehran’s calculations: the president’s decision to accept, at least for now, Iran’s 10-point plan to reach a permanent end to the conflict as what the US president described as a “workable basis for negotiations”.
- According to the Iranian readout, this includes the lifting of all sanctions on the republic, the unfreezing of its oil money held overseas, the withdrawal of American forces from bases in the region and an end to Israel’s war against Iran’s main proxy Hizbollah in Lebanon — which Israel has already objected to. Crucially, it also includes “regulated passage” through the strait under the coordination of the Iranian military.
- If Iran had presented such conditions before the war, it would have been dismissed as a fanciful wishlist.
- He [Trump] made no mention of Iran’s missile arsenal or nuclear programme — his main justifications for launching the war.
- But Gulf states such as Saudi Arabia, the United Arab Emirates and Bahrain will be wary about what comes next. (…) They will also fret about the potential of Trump allowing Tehran to retain some form of control or tolling over the strait, which is crucial for their energy exports and trade.
- Many in the Gulf will view the war as displaying the worst traits of the unpredictable president and the limitations on their ability to influence him.
- The Islamic regime warned that it would enter the talks with “distrust” of the US.
- “But there are no winners. Everyone has lost in this war.”
Really? Seems one of the 3 warriors is losing much more than the others…
BTW: China got involved:
The New York Times, citing three unidentified Iranian officials, reported that Iran accepted the ceasefire proposal following intervention by China, which asked the Islamic Republic to show flexibility and defuse tensions. In an interview with AFP after the ceasefire announcement, Trump said he believed China had persuaded Iran to negotiate. (…)
Underscoring Beijing’s close diplomatic ties to Tehran, Iran’s top diplomat in China on Wednesday called on the world’s No. 2 economy to help “guarantee peace” in the Middle East.
“We hope different sides could guarantee that the US would not resume the war,” Iranian diplomat Abdolreza Rahmani Fazli told reporters in Beijing, the South China Morning Post reported. (Bloomberg)
Trump’s Ceasefire Still Leaves the US and Iran Mired in Quandary
US President Donald Trump has two weeks to figure out whether he’s untangled the knot he created in Iran, or just pulled it tighter. (…)
But amid celebrations of another “TACO Tuesday” from a president known for pulling back from the brink was the looming realization that the same core challenges remain. Among the to-be-determined quandaries is whether the Strait of Hormuz is effectively open to oil tanker traffic after vague indications Iran would permit more shipping through the waterway.
Iran has shown little willingness to accept sweeping US demands that would dismantle the remaining regime or see the country follow Venezuela’s lead in elevating US-friendly leaders. Nor did Tehran commit publicly to giving in to Trump’s demands that it permanently eliminate its nuclear program or retire its ballistic missile arsenal — after the US president issued threats to wipe out Iranian civilization that may have amounted to war crimes if he followed through.
Meanwhile, Trump confirmed a ten-point Iranian proposal would serve as the basis for future negotiations. Tehran has previously called for the lifting of sanctions and compensation for war damages. That could mean imposing new fees on ships traversing the Strait of Hormuz, with increased shipping costs and energy prices here to stay.
Ultimately, falling short of those goals may have to be acceptable for a US president who was under clear political and economic pressure to find an off-ramp. (…)
Against that backdrop, much of Tuesday was dominated by allies from across Trump’s coalition warning him not to follow through on a genocidal threat to end Persian civilization. As conservative podcast hosts openly debated whether the Cabinet should seek to remove Trump from office, even loyal Republicans on Capitol Hill said his threats to target power and desalination plants went too far. Trump’s Republican party won a special election in Georgia Tuesday, but by a much smaller margin than before in the typically safe district — a potential warning sign of voter dismay. (…)
Still, even as the president claimed in his announcement that he had brought “this Longterm problem close to resolution,” there was little public indication of actual progress toward quelling a military and economic headache that has wreaked havoc on his political standing.
“It is a relief that Trump took an off-ramp tonight,” wrote Jennifer Kavanagh, the director of military analysis at Defense Priorities, a libertarian think tank. “But if he was going to back down, he did so in the worst way. Raising the stakes so high beforehand, he maximized the damage to his credibility & global perceptions of U.S. power. This is a clear strategic defeat for the U.S.” (…)
Meanwhile, the Iranian proposal calls for the withdrawal of US combat forces from bases and military deployment points in the region and the release of frozen Iranian assets, among other aims, according to a report from Al Jazeera. The likelihood that the US — or Israel — would accept such proposals appear far-fetched, at best. (…)
Trump told the AFP in an interview shortly after the ceasefire announcement that Iran’s uranium supply will be “perfectly taken care of,” declining to specify how, while also touting the deal as a “total and complete victory” for the US. (…)
“It just doesn’t sound like there’s actually an agreement because what Trump is saying is totally different than what the Iranians are saying, but if Iran has the Strait permanently now, then what, what an error, what a miscalculation this entire endeavor was,” Senator Chris Murphy said in an interview with CNN. (…)
“It’s very unlikely that Iran is going to relinquish its newfound control or assertion of control over the Strait,” said Clayton Seigle, a senior fellow at the Center for Strategic and International Studies in Washington. (…)
John Authers:
And are there terms to which both sides can agree? Iran doesn’t want this to happen again, and will want guarantees against future attacks from the US or Israel. That will be difficult. Does it get to re-enter the global economy with sanctions lifted? Who pays for the damage? Will the regime give up its nuclear program, and how can this be policed?
Last month, Points of Return warned that the question was no longer TACO (Trump Always Chickens Out) but WACO (Will the Ayatollahs Chicken Out?). That remains the case. The theocracy is more willing to compromise than thought, which is a big deal. But the rest of the world, and a protracted recovery for risk assets, is still in the uncomfortable position of relying on the leaders in Tehran.
For the next 24 hours as markets get the chance to react to this news, let the good times roll. No civilizations have ended tonight.
Also:
Israel supports President Trump’s decision to stop attacking Iran for two weeks subject to the immediate reopening of the Strait of Hormuz and the cessation of Iran attacks against the United States, Israel and other countries in the region, the office of Prime Minister Benjamin Netanyahu said in a statement. But it said the cease-fire did not include Lebanon, contradicting an earlier statement from Prime Minister Shehbaz Sharif of Pakistan.
Perhaps the most prominent television cheerleader of the Iran war, the Fox News personality Mark Levin, voiced doubts about negotiations with the Iranians. “This enemy is still the enemy,” Levin told the host Sean Hannity on Fox. “They’re still surviving.” A deal now would be hard to enforce and could abandon the people of Iran, which would be “morally very difficult,” Levin said. Trump has praised Levin as “brilliant.” (NYT)
Watching the news last night
(Serge Chapleau, La Presse)
Break-even employment declines as unauthorized immigration outflows continue
Using newly available microdata that measure net unauthorized immigration through December 2025, we update previous estimates of break-even employment growth. Our framework combines demographic trends and labor force participation dynamics to estimate the pace of job growth consistent with a stable unemployment rate.
The updated estimates show that continued net outflows of unauthorized immigrants, together with shifts in labor force participation, have pushed the monthly break-even employment growth lower than previously thought. (…)
Our updated estimates indicate that net unauthorized immigration has remained negative since February, averaging -55,000 per month in the second half of 2025. These net outflows reflect high levels of removal orders by immigration courts and self-deportations, as well as very low levels of new entries. (…)
Incorporating these updated estimates of net unauthorized immigration into our full model—allowing the labor force participation rate to vary over time—yields substantially lower break-even employment growth than previously estimated (Chart 2, yellow line).
The break-even rate peaked at about 250,000 jobs per month in 2023, fell to roughly 10,000 by July 2025, and declined to near zero thereafter, averaging about –3,000 jobs per month from August to December 2025, indicating, if anything, a modest net jobs loss over this period.
Break-even employment depends not only on population growth, but also on the share of the population participating in the labor force. Recently, the demographic headwind from immigration has coincided with a gradual decline in labor force participation. (…)
To illustrate the role of labor force participation dynamics, we consider a counterfactual scenario in which the labor force participation rate remains constant (Chart 2, red line). Because we construct break-even employment growth from the growth rates of its underlying components, assuming a constant participation rate removes its contribution to job growth.
This scenario—isolating the impact of demographic changes alone—implies break-even employment growth of about 30,000 jobs per month by the end of 2025, down from 160,000 in 2023. Thus, movements in labor force participation amplify the demographic forces in determining break-even employment growth.
Comparing our break-even estimates with actual payroll growth (Chart 2, blue bars) suggests that job growth over the recent three months—December 2025–February 2026—has slightly exceeded the break-even rate on average, consistent with the unemployment rate remaining stable despite softer headline payroll numbers.
Real-time data point to an important change in the U.S. labor market: The benchmark for evaluating payroll growth has moved significantly. As net outflows of unauthorized immigrants reduced employment growth in late 2025, payroll gains that might historically have signaled economic slack are now consistent with a balanced labor market.
While most people and the FOMC focus on the unemployment rate, the increasing challenge for the 70% of the US economy based on consumer spending is that employment growth has stalled due to an aging population and the immigration shock. The reality is that only 59.2% of the US population is working, down from 61.1% in 2019, 63.4% in 2006 and 64.7% in 2000.
This leaves labor income growth totally dependent on wages which, from most indicators, are slowing to the 3.0-3.5% YoY range, pulling aggregate payrolls down towards the same range while inflation is perking up to 3.0%+, dangerously close to bringing real labor income growth near zero.
Americans are now saving only 4% of their disposable income and their ability to borrow is constrained by already rising delinquencies:
As Kathryn Anne Edwards writes, “the federal government enters this moment with a balance sheet that looks like the end of a recession rather than the start of one. The annual deficit reached $1.7 trillion last year.”
Meanwhile,
The Atlanta Fed’s GDPNow model has tracked Q1-2026 real GDP growth down to 1.3% as of April 7, from 3.1% in late February. The sequential downgrades were driven by incoming Q1 data releases: weaker-than-expected personal consumption expenditures, a pullback in private domestic investment growth, disappointing construction spending, and slowing retail sales. Each release nudged the model lower. We blame the weather for weighing on economic growth during December, January, and February when the winter weather was worse than usual. There should be a good rebound in Q2’s real GDP growth rate. (Ed Yardeni)
But inflation is creeping up:
More than 70% of non-manufacturing purchasing managers complained that the input prices they were paying were rising. Outside of the 2021-22 spike, that hadn’t happened since the immediate aftermath of the Global Financial Crisis; it was the biggest month-on-month rise for this measure in 13 years. Over time, this measure has a strong tendency to rise and fall with inflation excluding shelter, so it could bode ill for hopes that inflation stays contained: (John Authers)
Greer Stresses China Trade Over Investment Before Trump-Xi Meet
A top US trade official promoted the creation of a US-China board of trade, while downplaying the possibility of a similar group focused on bilateral investment, a sign of what could be at the center of talks when Chinese President Xi Jinping and US President Donald Trump meet next month.
“We’re looking at that kind of mechanism where we can work with the Chinese to figure what are the non-sensitive goods we should be trading with each other, get a handle on that, figure out what those flows should look like,” US Trade Representative Jamieson Greer said Tuesday during an event at the Hudson Institute in Washington.
“Then you’re in a better position to talk about stickier issues,” he added.
The creation of a board of trade was discussed in recent trade talks in Paris involving Greer, US Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng. That March meeting was intended to set the stage for the Trump-Xi meeting this spring. (…)
Interesting: “work with the Chinese to figure what are the non-sensitive goods we should be trading with each other”.
U.S. expects USMCA to remain in place, with ‘separate protocols’ for Canada and Mexico
The United States’ top trade official says he expects negotiations over the North American free-trade pact to extend beyond July 1, and to ultimately result in separate arrangements with Canada and Mexico built on top of the existing trilateral agreement. (…)
“Our baseline is that things have to be changed,” Mr. Greer said about the USMCA, which replaced the North American Free Trade Agreement in 2020 and governs trade between the three countries. But he suggested the core of the agreement would likely remain in place, while the U.S. would look to address specific bilateral grievances with Canada and Mexico in separate side agreements.
The existing agreement has “a bunch of load-bearing pillars” that function well, Mr. Greer said. “If we get rid of them, I just have to go back and do it again.”
“But we do have to have some kind of a protocol or something with Mexico, and one with Canada separately, I think, to deal with issues specific to those countries,” he said.
“Our import-export profile is different with each country, the labour situation in each country is different, the reasons why we have deficits with these countries are different. So it necessitates two separate protocols that we can, I think, layer over those load-bearing pillars of USMCA.” (…)
“I think that we aren’t probably going to be able to resolve all issues by July 1, but I think we are on track to resolve many of them and to move as quickly as we can,” he said.
The agreement lays out three possible paths forward. On July 1, the partners can agree to renew the deal for 16 years. If they don’t, they begin a process of annual reviews that continue for 10 years, after which the agreement ends. Any of the three partners can also withdraw from the agreement with six months’ notice.
Mr. Greer suggested that the U.S. will pursue the second option.
“On July 1, what has to happen is the United States tells Canada and Mexico what we intend to do. Do we intend to just rubber-stamp this thing and say, ‘All right, renewed, everything’s fine. Let’s hold hands and move on’?” he said.
“Or do we say, ‘This is not sufficient, we have to have modifications to this agreement, we have to change it’? And so we’ll enter into a period, we’ll be on the path to going out [of the agreement], which is actually a 10-year period. But we’ll be in negotiations during that time and try to resolve some things sooner rather than later.”
Mr. Greer has to report to Congress on June 1, a month ahead of the formal review date, to lay out the Trump administration’s plans. (…)
The Trump administration has not sought formal trade promotion authority from Congress, so its ability to alter the text of the USMCA itself is limited. A common view among trade experts is that the U.S. will use side letters to the agreement, backed by executive actions, to try to achieve its goals.
Mr. Greer has previously outlined various trade grievances with Canada and Mexico.
For Canada, these have included dairy quota allocation, digital streaming rules and provincial bans on U.S. liquor. An updated list, published by USTR last week, added several more, including Canada’s move to establish sovereign cloud computing infrastructure, Buy Canadian policies and provincial government procurement rules that exclude U.S. companies.
For Mexico, U.S. grievances include the use of “third-country content” in manufactured goods, the enforcement of labour laws and the country’s restrictions on investment in the energy sector.
Mr. Greer has also said he will push for more structural changes to the agreement that will apply to all three countries. These include tighter rules of origin (which lay out how much of a product must be made in North America to trade duty-free), as well as more alignment on external tariffs, screening of inbound investment and export controls.
Over the past year, the Trump administration has placed sectoral tariffs on a range of industries, including steel, aluminum, automobiles and forest products – in contravention of side agreements that were reached during the original USMCA negotiations. It has also placed tariffs on products that don’t meet the trade agreement’s rules of origin. The future of both types of tariffs will be a key issue in the USMCA review talks.
Insurers’ $1 Trillion Buildup in Private Credit Is Leaving Regulators in the Dust
(…) As private credit ascended from a Wall Street backwater to a booming market, the industry found the nation’s insurance companies to be a ready source of capital. Private-credit investments—which can include loans to businesses as well as pools of consumer debt such as car loans or credit-card debt—offered higher yields than plain-vanilla corporate and government bonds. Credit-ratings firms often awarded those investments letter grades saying they were just as safe.
U.S. insurers are regulated by state commissioners, whose remit also includes home and health policies. Part of their job is to determine whether an insurance company is maintaining an adequate financial cushion based on the risk level of the investments it holds. Commissioners perform periodic examinations of insurer portfolios and rely heavily on credit ratings.
These state regulators’ duties grew more complex as private-equity managers started snapping up life and annuity insurers and began moving their insurance money into private-credit investments. Other insurers followed. Of the about $6 trillion in invested assets held by life and annuity companies, nearly $1 trillion is now in private-credit investments, according to A.M. Best, a credit-rating firm that rates insurers.
About $419 billion of that debt carries a so-called private letter rating. In some ways, such a rating resembles what the ratings firms provide for publicly traded bonds: The firm issuing or packaging the debt pays a ratings company to assign a grade based on the likelihood the borrower will repay it. (…) But unlike bond ratings, “private” letter grades are available only to the debt’s issuer and investors.
A representative for the SEC, which regulates ratings firms, declined to comment on whether the agency has access to private letter ratings.
State commissioners lack the manpower to evaluate each investment individually. So for most bonds, the NAIC’s New York-based investment staff automatically assigns a risk score—and a corresponding capital requirement—based on the bond’s public credit rating. In the past decade, insurers began submitting private letter ratings to get the same treatment for their private-credit investments.
But NAIC investment staffers were uncomfortable rubber-stamping private letter ratings with the corresponding risk score. The 2024 study explained why. Some were up to six notches higher than what NAIC analysts thought was appropriate for the investments.
The study examined 109 private letter ratings the NAIC received in 2023 for assets its staff previously scored on its own. In 106 of those cases, the private rating was higher than NAIC’s. In 17 cases, ratings firms—mostly small ones—gave investment-grade private letter ratings to assets the NAIC staff considered junk, or below investment grade.
About a quarter of the private ratings came from “large” firms, a group made up of Moody’s Ratings, S&P Global Ratings and Fitch Ratings. The rest were submitted by another group of ratings firms that have grown in number and influence in the years that followed the 2008-09 financial crisis.
Private ratings by that group of “small” firms, which included Egan-Jones, KBRA, Morningstar and other relative newcomers, were an average of three notches higher than what the analysts on the NAIC staff believed were appropriate. At big ratings firms, they were about two notches higher.
Fitch was the most-frequent “large” ratings provider, while Egan-Jones was the most-frequent “small” provider, the study found. Since the study came out, some insurers have stopped using Egan-Jones.
An Egan-Jones spokeswoman said its private letter ratings, which it began to provide about a decade ago, have been good predictors of how rated investments performed. KBRA Chief Rating Officer Bill Cox said the firm is “confident this NAIC paper had no relevance to KBRA ratings.”
When state regulators discussed giving NAIC investment staff the ability to override private ratings, eight Republican representatives wrote to the regulators accusing them of overreach. Giving the NAIC that power “would lead to less transparency, more ambiguity for insurance companies and actual damage to market efficiencies,” Rep. Warren Davidson (R., Ohio) said in a 2023 hearing.
This year NAIC analysts got authority from state regulators to challenge private letter ratings if they are three notches above what the staffers believe is appropriate. The power took effect in January, more than five years after they started asking for it.
Doug Ommen, the insurance commissioner in Iowa, home to more insurance investments than any other state, said commissioners have always used their authority to change risk scores they believe are too high.
“Regulation doesn’t just stop at the door while we’re looking for ways to improve,” Ommen said.
There was more on private credit and private equity in yesterday’s Daily Edge.