Yields rise as markets await potential US-Iran peace deal. Treasury yields inched higher throughout the session as the US and Iran are said to be considering a two-week ceasefire extension to allow time for continued negotiations. The 2-year yield closed 2 bps higher at 3.76% while the 10-year yield closed 4 bps higher at 4.28%. Meanwhile, equities rose on optimism of a peace deal, with the S&P 500 rising 0.8% to close at an all-time high of 7,022.95. WTI crude prices remained relatively unchanged from yesterday, closing at $91.29 per barrel.
Trump threatens to fire Chair Powell, Warsh confirmation to kick-off. In an interview on Fox Business today, President Donald Trump said that he will fire Fed Chair Jerome Powell “if he’s not leaving on time.” Trump’s comments come as Powell’s term as chair ends this May, though his term as a Fed governor does not end until 2028. Powell has not shared whether he will remain on the Board of Governors through 2028, but he will continue serving as the Fed chair temporarily if his successor is not sworn in when his term ends. The Senate will start confirmation hearings for nominee Kevin Warsh next week. Warsh may face some complications in his approval process as Senator Thom Tillis has continued to say that he will block any Fed chair confirmation until the DOJ probe into the Fed is resolved. Treasury Secretary Scott Bessent said, “I am very optimistic that Kevin Warsh will be the chair of the Fed on time.”
Peace deal talks continue as current truce nears expiration. The US and Iran are considering an extension of the two-week ceasefire that is set to expire on Tuesday. An extension would give negotiators more time to work through key sticking points, including reopening of the Strait of Hormuz and addressing the future of Iran’s nuclear program. While the US is reportedly “very much engaged” in talks, its blockade of Iranian ports remains a major point of contention. Iran has warned that prolonging the blockade could constitute “a prelude to a breach of the ceasefire.” The strait remains effectively closed, with Tehran continuing to limit most ship access and the US blockade reportedly forcing ten ships to turn around, exacerbating the global energy crisis.
