Eye for an eye

When we thought the U.S.- Iran peace deal was going to be signed, a US Army Apache helicopter was downed near the Strait of Hormuz, off the coast of Oman. The two crew members were rescued uninjured by a US sea drone. President Donald Trump blamed Iran for the incident, as a response, The US military launched “self-defense” airstrikes on Iranian targets, primarily in southern Iran near Bandar Abbas and Qeshm Island. Strikes hit air defense systems, ground control stations, surveillance radar sites, missile sites, and boats attempting to lay mines. These were described as limited and proportional. In other words, we stil want the peace deal, but we cannot let this pass. Against the U.S. reataliation, Iran fired ballistic missiles and drones at US-associated targets/bases in the region, including sites in Bahrain, Kuwait, and Jordan. Iran released footage claiming successful strikes on US targets. Most incoming threats were reportedly intercepted, with limited casualties. All this does is weaken an already fragile peace negotiation. Hormuz remain effectively closed (2 ships/day vs 100/ day prior to the conflict) and the oil problem is not resolved. The equity market, particularly tech, is going through a tough patch, as you can see below, in part due to the conflict, and perhaps also overwhelmed by the SpaceX and Anthropic IPOs (too much paper at All time highs?). The 2 year bond, probably the best predictor of official rates, is above 4% which indicates the bond market does not se rate cuts anytime soon.

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