The main story of the session was a report on Iranian state television saying that they had obtained a draft framework for the memorandum of understanding and that it included the withdrawal of US military forces from areas neighboring Iran and the lifting of the naval blockade in exchange for reopening the Strait of Hormuz to pre-war levels.
The White House then denied the report, calling it a “complete fabrication.” They also added that no one should believe what Iranian state media publishes.
In a phone call with PBS, Trump explicitly stated that Iran would not get sanctions relief in exchange for giving up highly enriched uranium. This doesn’t seem like progress to me. Iran wants to lift sanctions, unfreeze assets, lift the US blockade, and reach a limited settlement on nuclear materials. Trump says that even if Iran gives up highly enriched uranium, he will not lift sanctions.
Finally, Trump spoke at a Cabinet meeting and said that they had not yet reached an agreement with Iran because they were not satisfied with it. He added that Iran is negotiating on fumes, which suggests that Tehran has no influence and has the upper hand. But he added that Iran has started to provide the things that the United States has asked for and that they are doing a good job regarding the talks.
On the data side, we had the US weekly ADP data which continued to point to a resilient labor market and the Richmond Fed Composite Index which showed further improvement. Economic data has been strong and there is absolutely no reason for the Fed to cut interest rates further even if oil prices fall when a deal is reached.
