{"id":592484,"date":"2026-04-28T14:15:00","date_gmt":"2026-04-28T14:15:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=592484"},"modified":"2026-04-28T14:15:00","modified_gmt":"2026-04-28T14:15:00","slug":"collateral-damage-3","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=592484","title":{"rendered":"Collateral Damage"},"content":{"rendered":"

Collateral Damage<\/span><\/p>\n

\n

By Molly Schwartz, Cross-ASset Macro Strategist at Rabobank<\/em><\/p>\n

Negotiations between the US and Iran are going nowhere. In fact, they\u2019re not really even happening at all. <\/strong>Over the weekend, Axios<\/a>\u00a0reported that Iran gave the US a proposal to reopen the Strait \u2014\u00a0not<\/em> to end the war. The proposal includes extending the ceasefire and an assertion that any conversations about Iran\u2019s nuclear program are off the table until the Strait is open and the US blockade is lifted. The US has not indicated whether it will accept or reject the proposal at the time of writing.<\/strong><\/p>\n

Assuming the US does agree to extend its indefinite ceasefire, a flimsy ceasefire extension, even if agreed to by both parties, holds little water. Remember, keeping the Strait open was a condition of the current <\/em>ceasefire as agreed to on April 8, and we can all see how well that held up. Just take a look at the prices at the pump.<\/strong><\/p>\n

While conversations between the US and Iran stall, Iran is making friends elsewhere. Iranian Foreign Minister Araghchi met with Putin yesterday, as Bloomberg<\/a> reported that Araghchi told Putin he is \u201ccommitted to strengthening the country\u2019s partnership with Russia\u201d and that \u201cthe Iranian people are able to \u2018resist US aggression and will be able to overcome it.\u2019\u201d<\/p>\n

As Iran and Russia are making nice, the US and Germany are not. During a visit to a school in western Germany, German Chancellor Friedrich Merz said that the Trump Administration was being \u201chumiliated\u201d<\/a> by Iran<\/strong>: \u201cThe Iranians are clearly stronger than expected and the Americans clearly have no truly convincing strategy in the negotiations either. A whole nation is being humiliated by the Iranian leadership.\u201d Trump has not commented on Merz\u2019 claims at the time of writing<\/strong>.<\/p>\n

The longer the Strait remains closed, the longer the European economy, and energy complex, is squeezed. Germany has rejected Trump\u2019s calls to join the war under NATO, despite German leaders softly echoing support of US military efforts. <\/strong>Europe has drafted a plan<\/a> to re-open the Strait after<\/em> the war has ended, <\/strong>that is not enough to appease Trump, who has made his demands for NATO participation in the Iran war clear. But the question remains just how much collateral damage Europe is willing to be subject to in the pursuit of keeping its hands clean.<\/strong><\/p>\n

Europe\u2019s reliance on energy from the Middle East and direct flows through the Strait of Hormuz suggest that they are in for more pain than the US under a prolonged closure<\/strong>. At the same time, they don\u2019t have a fanatic obduracy to tolerate it like the Iran (or rather, the IRGC at the expense of the Iranian people). If negotiations fail to result in a somewhat peaceful re-opening of the Strait and conclusion of the US naval blockade, Europe may have no choice but to get involved.<\/p>\n

It\u2019s probable that the Trump Administration is aware of this. Trump has lambasted European leaders for refusing to support the US and in some cases, outright refusing to cooperate. If the US keeps the Strait closed and inflicts enough second-hand damage on Europe, Trump may be able to achieve the NATO military \u201ccooperation\u201d he has been asking for.<\/strong><\/p>\n

Crude oil futures have continued to grind higher, trading up to highs of $109\/bbl yesterday. Futures prices have started to converge with the physical market, which is currently pricing crude at $113\/bbl, narrowing the spread from highs of $35.9 earlier this month to only $4, which would be more consistent with levels seen pre-war.<\/p>\n

Meanwhile, the Fed drama saga continues. The path to Warsh\u2019s confirmation as Fed chair seems to have cleared as the US Department of Justice (DOJ) has dropped its criminal probe into Powell with regard to the Federal Reserve\u2019s renovation budget. However, whether Powell will stay on the Board is not yet certain. While Powell\u2019s term as Chair ends in May, he is allowed to stay on the Board of Governors until January 2028.<\/strong><\/p>\n

Despite it being a highly popular question from reporters during the Fed decision press conference, Powell had been tight lipped about his plans for a while<\/strong>, until confirming<\/a>\u00a0more recently that he would stay on the Board until the DOJ investigation levied against him was concluded.<\/p>\n

However, while the DOJ has dismissed the case, that doesn\u2019t mean that Powell\u2019s troubles are over<\/strong>. Rather, this means that the case has now landed on the desk of the Fed\u2019s Office of Inspector General (OIG), though according to the Fed\u2019s own article<\/a> about the renovation, the OIG has had full access to all financial records and information throughout the duration of the project.<\/p>\n

Given the dropped charges against Powell, that has opened up Senator Thom Tillis to vote to officially confirm Warsh as Fed Chair. Whether or not the Fed meeting tomorrow will be Powell\u2019s last is still TBD. Read more from our Fed whisperer, Philip Marey, here<\/a>.<\/p>\n

A little farther north, Canadian Prime Minister, Mark Carney, announced the creation of a Canadian sovereign wealth fund, called the \u201cCanada Strong Fund<\/a>.\u201d The fund is designed to further lower barriers to business and investment in Canada\u2014something the Carney has spoken about extensively as a part of his mission\u2014by \u201cinvesting in strategic Canadian projects and companies.\u201d<\/strong><\/p>\n

A more financially-savvy Canadian government does not come without drawbacks. Carney has recently come under scrutiny<\/a> by some after his ethics disclosure<\/a>, which has led some to question the dissonance in Carney\u2019s insistence that Canada needs to diversify away from the US, while he himself is heavily invested there.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 04\/28\/2026 – 10:15<\/span><\/p>","protected":false},"excerpt":{"rendered":"

Collateral Damage By Molly Schwartz, Cross-ASset Macro Strategist at Rabobank Negotiations between the US and Iran are going nowhere. In fact, they\u2019re not really even happening at all. Over the weekend, Axios\u00a0reported that Iran gave the US a proposal to reopen the Strait \u2014\u00a0not to end the war. The proposal includes extending the ceasefire and… Continue reading Collateral Damage<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[20,23],"tags":[],"class_list":["post-592484","post","type-post","status-publish","format-standard","hentry","category-economic-empowerment","category-national-security","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/592484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=592484"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/592484\/revisions"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=592484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=592484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=592484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}