Long end of the curve more important than Fed rate decision, says Fidelity Investments' Jurrien Timmer
Jurrien Timmer, director of global macro at Fidelity Investments, joins 'Squawk on the Street' to discuss the markets as stocks fall amid the escalating Israel-Iran conflict and weak retail sales ahead of the Fed meeting.
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CNN
25 minutes ago
- CNN
Analysis: Tracking Trump's mixed messages on Iran
The United States is closer to a potential major military confrontation than we have ever have been in the Trump era. But discerning where President Donald Trump's head is at is proving a very difficult exercise. Since Israel launched attacks on Iran on Friday, Trump has offered a series of mixed messages about what he wants from Iran and just how involved the United States is or will be. This is a familiar story with Trump, who often vacillates between positions even in fraught circumstances. (In the last week alone, Trump reversed a policy on immigration raids targeting undocumented workers in the hospitality and farm industries, before reversing it again on Monday.) And there can be strategic value in being unpredictable. But the ever-shifting commentary from the president also means even our adversaries and allies might not know precisely how to deal with and placate him. And Americans concerned about getting involved in another Middle Eastern war won't have a clear sense of whether that's about to happen. Let's run through some of the big mixed messages. Trump's big initiative with Iran has been trying to craft some kind of nuclear deal. Trump had pushed this for weeks – even suggesting at various points that such a deal was close – and kept talking about it even after Israel struck Iran last week. But he's quickly seemed to move away from that emphasis. On June 12, Trump said, 'We've had very good discussions with Iran.' On June 15, Trump said Iran would 'like to make a deal. They're talking. They continue to talk.' He even said there was 'no deadline' on the talks. On June 16, while at the G7 summit in Canada, Trump assured that Iran 'basically is at the negotiating table. They want to make a deal. And as soon as I leave here we're going to be doing something.' But just a day after those comments and two days after saying there was no deadline, Trump quickly shifted. Early Tuesday morning, he suggested his appetite for negotiating has waned. 'They should have done the deal,' Trump said on Air Force One on his way back from Canada. 'I told them, 'Do the deal.' So I don't know. I'm not too much in the mood to negotiate.' On June 15, Trump expressed optimism about peace. 'Likewise, we will have PEACE, soon, between Israel and Iran!' Trump posted on Truth Social. 'Many calls and meetings now taking place.' By June 16, CNN reported Trump told his counterparts at the G7 meeting in Canada that ceasefire discussions were underway and that he wanted US officials to meet with their Iranian counterparts. But by Tuesday morning, Trump suggested peace talks were not a priority. 'I have not reached out to Iran for 'Peace Talks' in any way, shape, or form,' he posted on Truth Social. Trump also disputed France President Emmanuel Macron's comments that the US president was trying to negotiate a ceasefire. 'He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire,' Trump posted. By early Tuesday, Trump also suggested he wants a 'complete give-up' by Iran. He said he wants 'an end, a real end, not a ceasefire. An end. Or giving up entirely. That's OK, too.' Trump later Tuesday sent his clearest signal that his goals have moved away from any deals, posting two words on Truth Social in all caps: 'UNCONDITIONAL SURRENDER.' Trump has not only started downplaying the potential for a peace or a nuclear deal, but he also has increasingly flirted with the idea of more direct US involvement. CNN reported Tuesday afternoon that Trump is growing increasingly warm to using US military assets to strike Iranian nuclear facilities and is souring on a diplomatic solution to end the conflict. Initially, Trump spoke mostly about US involvement if Iran struck American targets, but in recent days he's left open the possibility that it could be necessary to prevent Iran from getting a nuclear weapon and upped the saber-rattling. On June 15, he said, 'It's possible we could get involved. But we are not at this moment involved.' On June 16, he declined to address a possible US role in Israel's strikes, saying, 'I don't want to talk about that.' By Tuesday, Trump suggested the US could get involved if that's what it took. 'Well I hope their program's going to be wiped out long before that,' Trump said when asked about a US military role. 'But they're not going to have a nuclear weapon.' By late Tuesday morning, Vice President JD Vance proactively floated the possibility. He said Trump had shown 'remarkable restraint' on using the US military to this point. But then he added: 'He may decide he needs to take further action to end Iranian enrichment. That decision ultimately belongs to the president.' Trump soon ratcheted up his rhetoric even more, posting on Truth Social, 'We now have complete and total control of the skies over Iran.' He added that Supreme Leader Ayatollah Ali Khamenei is an 'easy target,' and said, 'We are not going to take him out (kill!), at least not for now.' Depending upon your interpretation, the administration has either waffled or walked a very fine line on its role in the initial Israeli strikes against Iran. On June 12, Trump cautioned Israel against the strikes. 'I don't want them going in because I think I would blow it,' Trump said, referring to US prospects of cutting a nuclear deal with Iran. The president added that it 'might help it actually, but it also could blow it.' After Israel nonetheless struck Iran early June 13 local time, Secretary of State Marco Rubio sought to distance the administration from the strikes. 'Tonight, Israel took unilateral action against Iran. We are not involved in strikes against Iran,' Rubio said in a statement Thursday evening in the US. Prev Next But later on Friday, Trump seemed to praise the strikes in comments to CNN's Dana Bash, calling it 'a very successful attack.' Trump went to indicate he was well aware of Israel's plans, even citing in a Truth Social post 'the next already planned attacks,' which would be 'even more brutal.' The administration's coordination with Israel became even clearer on June 15, when CNN reported that the two sides had discussed an Israeli plan to kill Khamenei, which Trump opposed and wasn't launched. CNN also reported that the US has offered Israel defensive support in the case of Iranian retaliation. The administration's line seems to be that because the US hasn't militarily participated in the strikes on Iran, it's not really involved. But Trump has been happy to play up US involvement when it serves his purposes. His most recent social media posts, for instance, refer to 'we' in ways that suggest the United States and Israel are working together.
Yahoo
26 minutes ago
- Yahoo
Commentary: The Middle East is messing up Trump's economic plan
In President Trump's perfect world, nation after nation would make trade deals with the US and validate his aggressive tariff strategy. Low energy prices would soothe consumers. Turbulent parts of the world would settle down because the US president insists on peace. Like virtually every other president, however, Trump is discovering that events can conspire against him. The war between Israel and Iran doesn't affect the US directly — yet — but it demands Trump's attention and may force him to make some difficult decisions. Possible outcomes range from a temporary interruption of Trump's economic plans to an unforeseen crisis that rewrites the playbook. "Market optimism about a quick Israel/Iran resolution is premature and naive at best, completely wrong at worst," Terry Haines, founder of Pangaea Policy, wrote in a June 16 analysis. "There's not a simplistic binary solution to a multi-dimensional problem here." Trump set July 9 as a deadline for trade deals with at least 15 nations. That's 90 days after Trump suspended the "reciprocal" tariffs he imposed on April 2 as leverage in trade negotiations. One venue for trade talks was supposed to be the current gathering of world leaders in western Canada, where Trump could have hammered out deals face-to-face with the leaders of Canada, Mexico, France, Germany, Japan, and other nations high on his tariff target list. But Trump left early to deal with the increasingly grave exchange of fire between Israel and Iran. That will indefinitely delay trade talks, with uncertainty hanging over trade volumes totaling more than $3 trillion. Absent any trade deals, most imports to the US face new taxes ranging from 10% to 50%, with price hikes likely to hit American shoppers within faces some momentous decisions on the Iran-Israel conflict that could affect the rest of his presidency. He's talking tough, as if Israel and, by extension, the US have all the cards in the showdown with Iran. "Unconditional surrender," Trump demanded of Iran on social media on June 17. "We now have complete and total control of the skies over Iran." He also said "we" know exactly where Iran's theocratic leader, Ali Khamenei, is hiding out, clearly implying that a US or Israeli airstrike could kill the ayatollah. Trump is bluffing to some extent. As far as anybody knows, Israeli jets have been attacking Iran without any US assistance since June 13, as Israel tries to eliminate an Iranian nuclear weapons program that could eventually threaten Israel's existence. Trump, in turn, has been trying to get Iran to agree to scale back or drop its nuclear program through diplomacy. What Trump seems to be doing now is threatening that US forces will join the attack unless Iran agrees to unwind the nuclear program on its own. And do it fast. It's a threat Iran has to take seriously. But it also carries risks for Trump. Israel lacks the giant "bunker buster" bombs needed to burrow deep into the earth and fully destroy Iran's most hardened nuclear sites. But the US can't just gift Israel some high-end bombs and look the other way. It would most likely take US jets flying near or over Iran to put those bombs on target, making American troops direct combatants in the conflict. American bombs might be able to kill Iran's nuclear program for the time being. But the "what's next" question is an uncomfortable one. The Iranian regime is in a tight corner, but it's still dangerous. It could attack US ships or bases in the region, possibly killing scores. It could attack energy facilities in oil-producing neighbor states. It could also try to close the Strait of Hormuz, which would lock in roughly 20% of the world's oil supplies. Iran would ultimately lose if it had to face the US in any of these scenarios. But it could inflict pain, nonetheless. So if Trump were to act on his threats and send US jets over Iran, he'd be unleashing forces he might not be able to control. Any attack affecting actual oil supplies would cause a price spike much sharper than the $15 per barrel jump in prices that has occurred since Israel first struck Iran on June 13. That would be an inflationary shock felt very quickly by US motorists through higher pump prices and, with a lag, by consumers of many other goods as the rising cost of production and transportation pushed end prices higher. Trump has promised a permissive, deregulatory agenda meant to ease energy production and bring prices down. Part of his calculus for tariffs, which push prices up, is that falling energy costs would offset prices to the downside. If Trump could no longer rely on that, he'd have to decide whether to go through with tariffs, knowing that the harm to consumers would be greater than he planned for. Read more: How to protect your money during turmoil, stock market volatility In a quagmire scenario, US forces might join the Israelis in directly attacking Iran, and probably demolishing the nuclear program. But Iran could keep oil prices elevated for a while, with repeated attacks on oil infrastructure. If Trump were to go as far as trying to remove Iran's Islamic regime — which would delight Israel — it would raise the ugly question of whether US troops should enter Iran on the ground. Recent history suggests the answer should be no. US power helped overturn autocratic regimes in Afghanistan and Iraq, but chaotic tribal warfare ensued in each case, costing thousands of American lives and many more local casualties. Trump himself has railed against US involvement in overseas wars and vowed to be the president of peace. For now, Trump seems to be hoping the mere threat of American strikes will cow the Iranian mullahs into giving up their nukes and allow Trump to declare victory. But they're a crafty bunch, even on defense — and Iran's allies Russia and China are no doubt whispering ideas for how to bluff the Americans into calling off the Israelis. Trump has a strong hand, but the longer a confrontation with Iran drags on, the more it will limit what Trump can do for the economy at home. Trade partners such as Europe and China are looking for every negotiating edge they can get against Trump. As long as he's tied up with something else, they'll be in no hurry to talk tariff. They know time is working against Trump, because the longer his tariffs are in place, the more likely American consumers are to notice — and boo. For some of those trade partners, the Iranian distraction is a welcome delay. If the US gets sucked into a bigger war — especially one with mounting casualties — Trump's popularity could decline along with his political sway. A few Republican defectors in Congress could undermine Trump's whole tax cut and put his deregulatory agenda at risk, much as Lyndon Johnson's social welfare reforms fell victim to the Vietnam War. The American president is powerful but not omnipotent. Trump is learning where the boundary lies. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31 minutes ago
- Yahoo
Stock markets are ignoring the war as they wait for the Fed
Israel's air war on Iran entered its fourth day and the price of oil went up again, but the markets appear to be shrugging off the conflict. S&P 500 futures inched up this morning following gains in Europe and Asia. Investors appear to be positioning for a classic 'buy the rumor, sell the news' event in front of the U.S. Federal Reserve's interest rate decision on Wednesday. The Fed is expected to leave rates where they are, so don't be surprised if you see a moderate amount of profit-taking if that decision is confirmed. The stock markets also seem to be unbothered by the ongoing conflict in the Middle East even though the VIX volatility index is sharply up. Deutsche Bank's Henry Allen put it best in a note to clients sent this morning: 'Geopolitics doesn't normally matter much for long-run market performance. This is a pretty consistent pattern, including over the last two years with the Middle East. For instance, there was a brief risk-off move in April 2024 after Iran's attack on Israel, but markets quickly recovered. Then in October 2024, further Iranian strikes led to an oil price spike, but when Israel's response was more limited than many anticipated, prices fell back again. This week's events have clearly been much bigger than 2024. But apart from commodities and Middle Eastern equities, the wider market impact has been limited. In fact, the MSCI World index closed just over -1% beneath its record on Thursday.' UBS's Paul Donovan concurred: 'The ongoing exchange of missile strikes between Iran and Israel this weekend has not had a major impact on financial markets. … Further market moves would be justified only if there were expectations of even more disruption to energy supplies or shipping lanes,' he said this morning. Goldman Sachs's Jan Hatzius and his team predict the Fed will remain on hold. Inflation and economic growth both appear to be moderate, so it's not clear whether the Fed needs to intervene by moving the interest-rate needle either way, they told clients. 'The FOMC will likely reiterate that it plans to remain on hold until it has further clarity and downplay its longer-term projections as highly contingent on a still very uncertain economic and policy outlook,' they wrote. Here's a snapshot of the action this morning prior to the opening bell in New York: The VIX fear index rose 14% today. U.S. crude oil rose 1.23% to $73.88 a barrel, after rising more than 7% last week. S&P 500 futures were up 0.51% this morning despite turmoil in the oil markets. The S&P 500 closed down 1.13% on Friday, at 5,976. Bitcoin is sitting above $107K. Japan's Nikkei 225 was up 1.26%. India's Nifty 50 rose 0.9%. China's Composite rose 0.35%. Stoxx Europe 600 was up 0.35% in early trading. This story was originally featured on
