Markets surge due to Iranian truce!

Will the truce last? Doubtful, but at least for now there is some reduction in market pressure.

Ships are moving through the Strait of Hormuz and tensions are easing. This is good short term news for the markets and politics. But something tells me that a truce between Donald Trump and whoever is actually in charge of Iran is about as stable as a quantum vacuum. I would be shocked if this was it, the war is now over, and there were no more bombs dropped.

To some degree I was sort of feeling like it would have been better (long term) if Iran had stuck to their guns and Trump had unleased fury last night as threatened. While it would have been politically and militarily risky to take Hormuz by force and bomb critical Iranian infrastructure, it may have been the best chance to actually force the sort of commitment that Iran will likely promise (albeit with their fingers crossed behind their back). I don't trust Iran any more than I can throw them.

That being said, Trump said "open the strait or else". The strait is open this morning, so I guess he has to sort of follow along with his promise. He'd be a real dick if they did follow through with reopening the strait, but got bombed to smithereens either way. Trump can be a hard ass, but being the deal maker means keeping your deals to keep credibility.

So for now, the markets and the politics are good for Trump. I know that the haters will hate and would have hated anything that happened. For a portion of Americans, Trump simply cannot win for no other reason than he is Trump. But this was a good short term gap in complaints by the haters who suggested the war was bad for gas prices and such. Yeah, well in the famous words of Jerome Powell, the gas price inflation was always "transitory" as in a short term artificial bump that would come back down once the current conditions changed. After the truce, they have. The actual definition of transitory.

Now the hard part comes. The negotiations. Everyone is claiming that the baseline issues are different. We have our 10 or 15 items and they apparently have a different 10 items depending on who to ask. Time will tell if Iran can actually promise that whomever negotiates can actually follow through with what they promise. After all, it certainly does not feel like the left hand knows what the right hand is dong over there. It does no good if one of the politicians agrees to let ships through the strait if the IRGC decides to close it on their own again because they didn't like who negotiated. This is going to be a shaky time.