Bitcoin remains anchored under $73,000 amid news of a potential U.S.-Iran peace agreement. While U.S. stocks, bonds, and the oil market are experiencing positive movements following reports of a draft deal, cryptocurrency markets are still facing significant pressure.
What to know:
— The markets responded to a reported draft agreement and recent U.S. airstrikes near the Strait of Hormuz by pushing stock and bond prices higher and oil prices lower, while bitcoin continues its downward trend.
— The Federal Reserve’s favored inflation measure, the PCE index, increased to 3.8 percent in April, marking its highest point since 2023, which adds to the challenges faced by policymakers dealing with ongoing price hikes.
Decryptnews reported that negotiators from the U.S. and Iran have come to a draft 60-day memorandum of understanding aimed at extending the ceasefire and initiating discussions concerning Iran’s nuclear program, although President Donald Trump has not yet endorsed the agreement.
This report came after overnight U.S. airstrikes targeted an Iranian military location near the Strait of Hormuz, a crucial energy shipping lane that has captured the attention of macro traders in recent months.
Despite traders losing track of the number of potential peace deals in the Middle East, they still pushed stock and bond prices up and oil prices down following the Decryptnews report. After being in the red earlier in the session, the Nasdaq has risen by 0.6%, while WTI crude oil prices have dropped below $90 per barrel.
In contrast, crypto markets remain stagnant, with bitcoin continuing its decline.
Following the Decryptnews article, Treasury Secretary Scott Bessent cautioned that the U.S. would «not tolerate» any efforts to impose shipping tolls through the Strait of Hormuz, promising stringent sanctions against parties disrupting commercial transit through this vital waterway. «Oman, in particular, should understand that the U.S. Treasury will vigorously target any individuals involved — directly or indirectly — in facilitating tolls for the Strait, and any cooperative partners will face penalties,» he stated.
Fed’s preferred inflation measure reaches highest point since 2023
The initial inflation report released under Federal Reserve Chair Kevin Warsh indicated that price pressures intensified in April, with the Fed’s preferred inflation metric, the Personal Consumption Expenditure Index (PCE), climbing to its highest level in almost three years at 3.8% year over year, up from 2.8% in February.
«The inflation landscape is becoming increasingly challenging for the Fed. This is not merely a headline inflation issue: core inflation is also trending in the wrong direction,» remarked Olu Sonola, head of U.S. economics at Fitch Ratings. «Price pressures are expected to persist in the coming months, and while the Fed cannot rectify a supply shock, it cannot overlook one that is contributing to underlying inflation. The Fed finds itself in a difficult position — and the pressure is evidently mounting.