Yields rise with US-Iran talks on hold. Treasury yields climbed today after Vice President JD Vance cancelled his trip to Pakistan for negotiations, though the move partially reversed course on news that that President Trump extended the ceasefire agreement. The 2-year yield closed 6 bps higher at 3.78% while the 10-year yield closed 4 bps higher at 4.29%. Equities slid alongside Treasurys, with the S&P 500 and NASDAQ closing 0.63% and 0.59% lower, respectively. Meanwhile, oil rose, with Brent crude futures now trading near $99 per barrel, well above last week’s close of $90.38.
Trump extends ceasefire. President Donald Trump announced that he would extend the ceasefire ahead of tomorrow’s deadline until Iran’s “proposal is submitted, and discussions are concluded, one way or the other.” Pakistan Prime Minister Shehbaz Sharif released a statement thanking Trump for the extension “to allow ongoing diplomatic efforts to take their course.” Vice President JD Vance was set to travel to Islamabad for a second round of negotiations, but Iranian officials refused to attend as they claimed the US had unreasonable asks. It’s unclear when talks will resume as the Tasnim news agency reports that Iran does not currently plan on participating. In the meantime, Trump has said that the US naval blockade near the Strait of Hormuz will continue.
Warsh defends his independence in Senate hearing. Kevin Warsh, nominee for Fed Chair, said at today’s congressional hearing that he would “be an independent actor if confirmed,” rejecting claims from Democratic lawmakers that he would act as a “sock puppet” for President Trump. Warsh added he has not agreed to any specific rate decisions at Trump’s request, though the President said today he would be disappointed if rates weren’t cut soon after Warsh takes the role. Meanwhile, Warsh proposed limited issuance of forward guidance (such as Dot Plots) to promote adaptability and flexibility within the FOMC, while he also discussed a new framework to address persistent inflation. Warsh’s confirmation timeline remains uncertain, as Senator Thom Tillis (R-NC), a member of the Committee, has said he will not vote to confirm any Fed nominee until the DOJ’s investigation into the Federal Reserve is complete.
