US, Iran Near Truce Extension, Stocks Hit Record Highs, More

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Bloomberg News Now 7 min 7 speakers 3 chapters transcribed 3 months ago
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What is the main topic discussed in this episode?

Unknown 0:00
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Erica Herskowitz 0:31
News when you want it with Bloomberg News Now. I'm Erica Herskowitz. The three-month conflict could be nearing a resolution. Sources tell Bloomberg the U.S. and Iran have reached an agreement on a 60-day memorandum of understanding that would lead to negotiations on Iran's nuclear program. But President Trump still needs to sign off. Speaking at a White House press briefing today, Treasury Secretary Scott Beston said Trump has three conditions for a deal.
Scott Beston 0:57
It's always a mistake to get out ahead of the president, so it is all going to be the president's decision. I think that we can see that the president very clearly stated out, stated his three, the open the street, highly enriched uranium, no nuclear program. Those three aspects that you just outlined, part of the temporary deal that has been agreed. But if there can be no deal without those, why would there be a deal without those?
Erica Herskowitz 1:27
Bloomberg's Jeff Mason with the follow-up question for Besant. The president has told mediators he wants a couple of days to think about the deal. The U.K. Guardian reports Pakistan's foreign minister will head to Washington tomorrow to try to speed up negotiations with Secretary of State Marco Rubio. Wall Street sent stocks higher today on speculation the U.S. and Iran are close to a diplomatic breakthrough in the war that's rattled global markets. The Dow gained a fraction, up 25 points. The Nasdaq added 243, closing nearly 1% higher. The S&P rose 43 points, up more than 0.5%. The 10-year Treasury yield is at 4.45%. The 2-year Treasury yield at 4.02%. And Brent crude is down slightly to $94 a barrel.
Erica Herskowitz 2:10
We're also getting a sense of the war's impact in the latest economic data. Consumer spending edged up last month by a tenth of a percent, while the Fed's preferred gauge of inflation jumped to 3.8 percent. Leaving out food and energy, it was 3.3 percent, still well above the Fed's target. We also got a new round of retail earnings this morning, and the trend seems to be positive. Dollar Tree, Best Buy and Kohl's all came out with beats. Emily Cohn leads Bloomberg's retail coverage.

What is the latest update on the US-Iran negotiations?

Unknown 2:36
Even in the face of economic pressure. Consumers are still spending when the price is right. I think it's interesting to look at a store like Dollar Tree. They saw fewer visits, so people are pulling back on how much they go shopping. But then when they go shopping, they're spending more. So they saw their average ticket price was up.
Erica Herskowitz 2:58
Bloomberg's Emily Cohn, Best Buy closed ahead 15 percent. Kohl's up 21 percent. Dollar Tree closed 18 percent higher. During a conference in Iceland, Fed Reserve Bank of St. Louis President Alberto Musalem cautioned the labor market is stable, inflation is meaningfully above the Fed's 2% target, and long-run inflation expectations are drifting higher.
Alberto Musalem 3:20
There is a scenario where inflation remains high. There's no disinflation in the next quarter or two. And in that scenario, the economy will probably require a hike. There's also a scenario where

What conditions does President Trump have for the Iran deal?

Alberto Musalem 3:33
The economy weakens materially in the second half of the year because real incomes are challenged and corporate margins are challenged. In that scenario, inflation could come down. In that scenario, we would be thinking of no hikes, maybe even a cut. So there are two scenarios to play with here.
Erica Herskowitz 3:49
Musalem, a guest on Bloomberg Intelligence, also said policymakers can't depend on a potential productivity boom from artificial intelligence to ease elevated inflation. Dell Technologies gave an outlook for annual sales of about $167 billion, including $60 billion from the sale of AI servers.

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