The memorandum, signed Wednesday by President Donald Trump and Iranian President Masoud Pezeshkian, proposed a 60-day window of toll-free transit through the vital waterway. Markets initially rallied on the prospect of normalized oil flows, but the cancellation of follow-up meetings suggests deep-seated friction remains. Analysts warn that even if the agreement holds, the long-term status of the Strait—potentially involving joint control with Oman—leaves shippers wary and oil prices prone to significant volatility.

Simultaneously, the Federal Reserve’s policy landscape has shifted under new leadership. Kevin Warsh, in his debut policy meeting, maintained the target rate at 3.50-3.75% while signaling a hawkish stance that surprised investors. By eschewing traditional forward guidance in favor of a concise, 130-word statement, Warsh signaled a departure from the communication style of his predecessors. With inflation pressures still simmering—evidenced by the Bank of England’s cautious hold and rising core indices—the global economic outlook remains tethered to the tenuous stability of Middle Eastern energy corridors.