Recap | 25 March 2026

2 days ago
13 min read

Commentary - not advice. | Disclaimers

HEADLINES

| White House vacillates between exit and escalation as Iran rejects ceasefire

| Israel expands into southern Lebanon in war against Hezbollah

| Iran's effective control of Strait of Hormuz, attacks on neighbors reshape Gulf energy flows

| With eye toward war's end, Washington reschedules Beijing summit for mid-May

MARKETS & ECONOMIES | Likely or not, possibility of peace fosters stocks' resilience

| Spiking import prices and global business surveys point to cost pressures

| ECB, BOE, BOJ, and RBA put hikes on the table if Iran crisis brings lasting inflation

| DOJ lacked evidence against Powell in criminal probe

AROUND THE WORLD | Hungary blocks EU support for Ukraine as US demands territorial concessions

| Denmark's ruling coalition suffers election setback

| Russian allies Belarus and North Korea meet in Pyongyang

ODDS & ENDS | President Trump names Big Tech leaders to advisory council shaping AI goals

| Anthropic legal challenge proceeds as AI systems become integral to warfare

| Meta loses back-to-back cases over child safety, social media addiction

| Senate fails to find compromise on DHS funding

EDWARD VON DER SCHMIDT

Headlines

White House vacillates between exit and escalation as Iran rejects ceasefire

- Iran rejected a 15-point US peace proposal delivered through intermediaries that called for nuclear cooperation and monitoring, limited missile capabilities, and restrictions on support for regional proxies in exchange for sanctions relief.

- The Iranians are reportedly seeking assurances of no future attacks along with reparations and sovereign control of the Strait of Hormuz, tying any ceasefire to a cessation of hostilities in Lebanon as well.

- While diplomacy via interlocutors like Pakistan remains viable and preferable, the US is amassing troops for potential ground operations as Iran has warned of an expanded theater of war including the Red Sea.

Comment:

President Trump may be proffering peace terms to preserve diplomacy and validate a ground incursion if a negotiated resolution cannot be reached in the days ahead. An assault on Kharg Island to cut off Iranian oil revenues or along the coast of the Strait of Hormuz to secure transit seem likely starting points in the event of escalation.

In turn, Iran may activate Houthi proxies in Yemen to attack rerouted traffic through the Red Seal while targeting Gulf power and desalination facilities, inviting regional war.

SOURCES:

Iran rejects US ceasefire plan, issues its own demands as strikes land across the Mideast (AP)
Some of Trump's Iran war objectives remain unfulfilled as he looks to wind down the conflict (AP)
What we know and don't know about the Iran war negotiations (AP; 3/24)
Iran says it is reviewing US proposal but has no interest in holding talks (Reuters)
Iran toughens negotiating stance amid mediation efforts, sources say (Reuters; 3/24)
Pakistan leans on US and Iran ties to emerge as potential peacebroker (Reuters; 3/24)
US Insists Talks Ongoing Even as Iran Rejects Trump Outreach (Bloomberg)
US Demands Iran Dismantle Nuclear Sites as Part of Rejected 15-Point Plan (Bloomberg)
Iran Rejects US Peace Plan in Blow to Efforts to End War (Bloomberg)
Iran's Potential Peace Negotiator Known for Strongman Approach (Bloomberg)
US Troop Movements Fan Fears of a Risky Ground Attack on Iran (Bloomberg)
Trump Tells Aides He Wants Speedy End to Iran War (WSJ)
The Narrow Path to a U.S.-Iran Deal (WSJ)

SEE ALSO:

Pentagon reaches deals with defense firms to expand munitions production (Reuters)
What Are Iran's Missile and Drone Capabilities? (Bloomberg)
Iran Is Applying the Lessons of Russia's Drone Warfare Against America (WSJ)

Israel expands into southern Lebanon in war against Hezbollah

- Israel announced that it would establish a security buffer corridor up to the Litani river in an intensified campaign against Iran-backed Hezbollah in Lebanon.

- Iranian demands that a ceasefire with the US include Lebanon limit a path to peace in indirect talks that appear to have excluded Israel, who do not intend to wind down and broadened the scope of their offensive.

Comment:

Divergent US and Israeli war aims will complicate negotiations and extend the threat presented by Iran, amplifying second-order risks from a protracted conflict.

Israel's simultaneous military action against Tehran and Beirut may also impede efforts to rebuff potential Houthi attacks from Yemen.

SOURCES:

Lebanon orders Iran's ambassador out, escalating a crackdown on Tehran's influence (AP; 3/24)
Iran wants Lebanon included in any ceasefire, sources say (Reuters)
Hezbollah chief rejects talks with Israel under fire, vows fighters will continue 'without limits' (Reuters)
Israel's military to occupy swathe of southern Lebanon, defence minister says (Reuters; 3/24)
Israel Hits Russian-Iranian Weapons Smuggling Route in the Caspian Sea (WSJ; 3/24)

SEE ALSO:

Netanyahu seeks to avoid snap vote as Iran war gives no boost in polls (Reuters)
Why Iran's Jerusalem Strikes Risk Sparking a Broader Religious Conflict (Bloomberg; 3/24)

Iran's effective control of Strait of Hormuz, attacks on neighbors reshape Gulf energy flows

- Iran has limited transit through the strait to 'non-hostile vessels', establishing de facto tolls for safe-passage at its discretion.

- Asian importers acutely exposed to fuel shortages have negotiated escorts with Gulf oil and gas production significantly curtailed.

- Red Sea workarounds are vulnerable to Houthi attacks on the Bab al-Mandab Strait leading into the Gulf of Aden and Arabian Sea.

Comment:

Paralyzed production and shipping go beyond oil and gas, triggering fertilizer, aluminum, helium, and other key shortages while blocked cargo transit imperils essential food imports.

Effective closure of these waterways is the economic equivalent of a hemorrhagic stroke - Iran's principle source of leverage and an impetus for Gulf countries and others to enter the conflict in some form.

SOURCES:

Iran tells UN: 'non-hostile' ships can transit Strait of Hormuz (Reuters; 3/24)
Exclusive: Iraq oil output further plunges as storage fills, Hormuz exports blocked by conflict (Reuters)
Shipping firm Maersk says Middle East has pressing need for food imports (Reuters)
Iranian strikes pose 'existential threat', Gulf states tell UN (Reuters)
Iran Charges Some Ships Hormuz Transit Fees for Safe Passage (Bloomberg; 3/24)
Turkey Is Urging Gulf Arab States Not to Join War Against Iran (Bloomberg)
Saudi Surges Oil Exports From Yanbu Toward 5 Million Target (Bloomberg)
Gulf States Weigh Military Options to Counter Iran's Attacks (Bloomberg; 3/24)
Iran Drafts Law to Impose Tolls for Transiting Strait of Hormuz (Bloomberg)
LNG Buyers Hunt for Deals in US After Qatar Is Shut From Market (Bloomberg)
Here's a List of Gulf Energy Infrastructure Damaged in Iran War (Bloomberg)

SEE ALSO:

Western powers were unable to secure shipping in the Red Sea. Hormuz will be harder. (Reuters)
What It Would Take to Reopen the Strait of Hormuz (Bloomberg)
Asia Braces for Worst-Case Energy Scenarios as Iran War Drags On (Bloomberg)
Fuel Shock in Thailand Sends Prices Surging Up to 22% Overnight (Bloomberg)
Oil Prices Test Thailand Fiscal Limits, Forcing End to Price Cap (Bloomberg; 3/24)
Europe Faced With Near-Empty Gas Stores Just as War Hits Supply (Bloomberg)
Fuel Price Hikes in Chile Test Kast as Supporters Start to Balk (Bloomberg)
Trump Team Examines What Oil as High as $200 a Barrel Would Mean (Bloomberg)
IMF Runs Scenarios on Which Nations May Need Aid Due to Iran War (Bloomberg)
The World's Energy Safety Net Is Buckling (WSJ)

With eye toward war's end, Washington reschedules Beijing summit for mid-May

- The White House announced that a postponed meeting between President Trump and President Xi will be held May 14-15.

- The press secretary implied that the conflict in Iran could be resolved before the summit when referencing the original 4-to-6 week timeline.

Comment:

Rescheduling the Trump-Xi summit so quickly suggests the White House's desire to declare victory and move on from the conflict, if nothing else.

The war may have changed Xi's calculus vis-a-vis Taiwan, which, along with unbalanced trade, could be a topic of contention amid uncertain US support for the island.

SOURCES:

Trump will travel to Beijing for rescheduled China trip May14-15, after delay due to Iran warn (AP)
Trump plans May visit to China for talks with Xi after Iran war delay (Reuters)
Trump to Travel to China on May 14-15 for Summit With Xi (Bloomberg)

SEE ALSO:

Taiwan wary that China could exploit US distraction over Middle East war (Reuters)
Taiwan says US has 'high' urgency in speeding up weapons delivers (Reuters)
China is mapping the ocean floor as it prepares for submarine warfare with the U.S. (Reuters; 3/23)
Trump's Ambivalence on Taiwan Opens a Historic Opportunity for China (WSJ)
China Isn't Rushing Taiwan - It's Squeezing It Slowly (WSJ; 3/24)

Markets & Economies

Likely or not, possibility of peace fosters stocks' resilience

- The technology sector lifted US equity indices on Wednesday as oil benchmarks retreated amid back-channel diplomacy in the Middle East.

- Separately, stablecoin legislation before Congress (i.e., the Clarity Act) may limit rewards on crypto holdings, which would otherwise challenge traditional bank deposits offering comparatively little interest.

Comment:

Daily headlines regarding private credit could very well exaggerate underlying portfolio exposure as narratives take on a life of their own, but confidence matters.

The risk of contagion in the face of AI disruption to software services, tightening credit conditions, and the precariousness of global growth is also very real.

SOURCES:

Stocks and oil prices keep yo-yoing on uncertainty about when the war with Iran will end (AP)
Stocks gain, oil prices fall on guarded hope for possible Iran war ceasefire (Reuters)
Oil prices drop 2% as Iran considers US proposal to end war (Reuters)
Stocks Rise, Oil Falls as Truce Prospects Weighed: Markets Wrap (Bloomberg)
Oil Advances as US and Iran Offer Conflicting Comments on Talks (Bloomberg)
Tech Stocks Rise as Traders Keep Focus on Iran Talks (WSJ)

SEE ALSO:

Ares Private Credit Fund Posts Steepest Monthly Loss on Record (Bloomberg)
Circle Shares Fall Most Ever on Latest Stablecoin Rewards Move (Bloomberg)
New Bank Regulations Could Favor Loans to Private Credit (WSJ)
Trump Says the Energy Shock Will Be Short-Lived. CEOs Paint a Scarier Picture. (WSJ)
How the AI Boom Has Transformed the Chip Industry Into a Market Monster (WSJ)

Spiking import prices and global business surveys point to cost pressures

- US import prices came in higher than expected in February, climbing 1.3% on the month with increases beyond energy products.

- S&P Global flash PMIs for March reflected higher input and selling prices, suggesting inflation pass through.

Comment:

Sharply higher price growth may not be sustained if inflation reduces economic activity and aggregate demand for goods and services. Stagflation would require that suppliers cannot help but pass on higher costs, regardless of prevailing conditions.

SOURCES:

US import prices post biggest increase in four years amid broad rise in goods (Reuters)
US business activity slips to 11-month low in March amid Iran war, S&P Global survey shows (Reuters; 3/24)
Iran war starts to hit global economy, business surveys show (Reuters; 3/24)
Global Business Activity Slows as Iran War Weighs (WSJ; 3/24)

SEE ALSO:

US current account deficit contracts sharply in fourth quarter (Reuters)

ECB, BOE, BOJ, and RBA put hikes on the table if Iran crisis brings lasting inflation

- ECB President Lagarde introduced the possibility of raising policy rates to counter nascent inflation pressures, with the central bank willing to be "forceful or persistent" if compelled by severe price increases.

- Officials at the BOE and RBA cited risks to inflation expectations as a potential call to action.

- The latest BOJ minutes for their January meeting showed hikes already top of mind in light of pronounced currency depreciation worsening domestic inflation.

SOURCES:

Top central banker thinks businesses may be quicker to raise prices due to Iran war (AP)
ECB's Lagarde opens door to rate hikes if Iran conflict pushes up inflation (Reuters)
RBA warns prolonged Middle East war could hit growth, unmoor inflation expectations (Reuters)
BOJ debated need for more rate hikes, weak yen impact on prices, January minutes show (Reuters)
ECB Would Need 'Forceful' Response if Inflation Surges, Says Lagarde (WSJ)
RBA Warns Global Oil Shock Could Drive Up Inflation Expectations (WSJ)
BOE Should Be Prepared to Act Despite Uncertainty, Says Pill (WSJ; 3/24)

SEE ALSO:

German business sentiment falls, Iran war hits upswing hopes (Reuters)
Ireland's Strong Economic Growth Tested by Iran War Fallout (Bloomberg)
Chemicals Giant BASF Hikes Prices Again as Mideast War Drives Up Costs (WSJ)

DOJ lacked evidence against Powell in criminal probe

- According to media reports of hearing transcripts, the Department of Justice admittedly lacked evidence of wrongdoing in their probe of Jerome Powell, a fact that presumably supported the court's decision to quash investigatory subpoenas.

- The judge alluded to political motivations to steer monetary policy in throwing out the motions earlier this month.

Comment:

A definitive end to the DOJ's specious case would facilitate an orderly transition to Kevin Warsh as Federal Reserve Chair, although Powell could stay on as a Governor until 2028 in order to safeguard the institution's independence and credibility against political interference.

SOURCE:

Prosecutor conceded lack of criminal evidence in Federal Reserve investigation, transcript shows (AP; 3/24)

SEE ALSO:

Fed's Barr sees rates holding steady 'for some time' given above-target inflation (Reuters)
Chances of a Federal Reserve rate cut fade as inflation worsens (AP; 3/24)

Around the World

Hungary blocks EU support for Ukraine as US demands territorial concessions

- Trailing in pre-election polls, Hungarian President Orban announced that he would block critical gas imports and European aid to Ukraine until Russian oil flows resumed through the Druzhba pipeline.

- Ukrainian President Zelenskyy told Reuters that the US tied future security guarantees to surrendering the entirety of the Donbas in line with Russian demands.

Comment:

Given the importance of fortified Donetsk and unclear commitments from the White House, such concessions from Ukraine do not seem likely before elections are held in Hungary.

Orban's ouster would shore up European support and bolster Ukraine at a time when US help and interest appear to be receding. Russian support for Iran against the US could change that (but hasn't yet).

SOURCES:

Russia says it shot down almost 400 Ukrainian drones as Moscow and Kyiv escalate aerial barrages (AP)
Hungary will out natural gas supplies to Ukraine until Russian oil deliveries resume (AP)
Hungary to curb gas flows to Ukraine until Druzhba oil flows resume, Orban says (Reuters)
Ukraine faces new Russian offensive as peace talks stall (Reuters)
Exclusive: US links security guarantees to Ukraine giving up Donbas, Zelenskiy says (Reuters)
Exclusive: At least 40% of Russia's oil export capacity halted, Reuters calculations show (Reuters)
Russia's Baltic ports halt oil loadings after heavy Ukrainian drone attack, sources say (Reuters)

SEE ALSO:

Hungary's Orban faces pivotal battle against ally-turned foe (Reuters)
Once inspired by Orban, Hungary's Peter Magyar now leads the charge to unseat him (Reuters)
Vance due to visit Hungary on April 7-8 ahead of key election, say sources (Reuters)
Ukraine-US fund approves first investment, in navigation producer (Reuters)
UK authorises military to board Russian shadow fleet tankers (Reuters)
Britain to Intercept Russian 'Shadow Fleet' Ships in UK Waters (Bloomberg)

Denmark's ruling coalition suffers election setback

- Affordability concerns prevailed over geopolitical interests in Denmark as mixed snap election results threatened Mette Frederiksen's tenure as prime minister.

- A party supporting independence for Greenland also won a seat in parliament, a possible vector for US overtures.

Comment:

Cost-of-living issues typically hurt incumbents held responsible for them.

SOURCES:

Denmark's 'kingmaker' could decide who will lead its next government after inconclusive election (AP)
Greenland independence party wins seat in Danish parliament at key moment (Reuters)

Russian allies Belarus and North Korea meet in Pyongyang

- Belarusian President Lukashenko met with North Korean leader Kim Jong Un to affirm ties; both countries have provided material support to Russia in its war with Ukraine.

- North Korea reiterated its commitment to nuclear arms.

Comment:

Support for proxy conflicts, interdependent supply chains, and other shared resources make allegiances clear in war.

SOURCES:

Belarusian President Lukashenko arrives in North Korea for talks with Kim Jong Un (AP)
Kim vows to 'irreversibly' cement North Korea's nuclear status (AP; 3/24)
N Korea's Kim welcomes fellow Putin ally Lukashenko with fanfare (Reuters)

Odds & Ends

President Trump names Big Tech leaders to advisory council shaping AI goals

- The CEOs of Meta, Nvidia, Oracle, and other technology magnates were named to the President's Council of Advisors on Science and Technology, which will guide and shape AI policy.

Comment:

Corporate and military stewardship of AI research, development, and application has sidelined the public and even Congress.

SOURCES:

Trump names Nvidia, Meta CEOs to science and tech council (Reuters)
Trump Names Mark Zuckerberg, Larry Ellison and Jensen Huang to Tech Panel (WSJ)

Anthropic legal challenge proceeds as AI systems become integral to warfare

- A federal judge appeared receptive to Anthropic PBC's contention that its designation as a supply chain risk violated its first amendment (free speech) and fifth amendment (due process) rights; a ruling is expected by Friday.

- Private AI software providers have become central to intelligence, targeting, and autonomous defense initiatives.

SOURCES:

Judge questions Pentagon's motives for labeling Anthropic as a security threat in battle over AI (AP; 3/24)
US judge says Pentagon's blacklisting of Anthropic looks like punishment for its views on AI safety (Reuters; 3/24)
U.S. Government's Ban on Anthropic Looks Like Punishment, Judge Says (WSJ; 3/24)
Exclusive: Anduril, Palantir Are Developing Golden Dome Missile Shield's Software (WSJ)
Exclusive: Nvidia-Backed Startup Seeking to Counter Chinese AI Eyes $25 Billion Valuation (WSJ)
Leaders of AI Firm Bought by Meta Are Restricted From Leaving China (WSJ)

SEE ALSO:

German army eyes AI tools to expedite wartime decision-making (Reuters)
US music publishers suing Anthropic make their case against AI 'fair use' (Reuters; 3/24)

Meta loses back-to-back cases over child safety, social media addiction

- Earlier this week, Meta - owner of Facebook, Instagram, and Whatsapp - lost a case in Nevada in which prosecutors alleged the company knowingly misled consumers in providing an unsafe platform for children.

- In a separate trial in Los Angeles, Meta and YouTube (parent: Google) were found liable for harms arising from social media addiction.

Comment:

Tech companies have largely relied on Section 230 protections to avoid liability for the content they host. While subject to appeal, these cases challenged the design and practices of the platforms instead and opened a pathway for extensive litigation.

SOURCES:

Jury finds Instagram and YouTube liable in landmark social media addiction trial (AP)
What could come next for other social media firms as jury finds Meta platforms harm children (AP)
Meta, Google lose US case over social media harm to kids (Reuters)
Meta ordered to pay $375 million in New Mexico trial over child exploitation, user safety claims (Reuters; 3/24)
Meta, Google Found Liable in First Social Media Addiction Trial (Bloomberg)
Meta and YouTube Lose Landmark Social-Media Addiction Trial (WSJ)
Landmark Verdict Says Meta Harmed Children, Allowing Adults to Prey on Them (WSJ; 3/24)

SEE ALSO:

US settles social media censorship case, bars agencies from threatening penalties (Reuters; 3/24)
Supreme Court Limits Liability for Internet Service Providers (WSJ)

Senate fails to find compromise on DHS funding

- US Senators were unable to resolve an ongoing dispute over DHS funding and ICE restrictions, which has led to crippling delays at airports with TSA understaffed.

Comment:

Any attempt to tie funding to the SAVE Act, as President Trump has demanded, makes passage less likely. Republicans' interest in brokering a deal suggests they see a political cost for failing to do so ahead of the November midterms.

SOURCES:

Airport disruptions abound as senators chase deal to end Homeland Security budget standoff (AP)
Senate GOP Rejects Democrats' Latest Bid to End DHS Shutdown (Bloomberg)
Lawmakers Trade Blame Over Failure to Strike ICE Deal (WSJ)

SEE ALSO:

Missouri court upholds mid-decade congressional redistricting backed by Trump (AP; 3/24)

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