Baker Market Update
The holiday-shortened week is ending with some optimism around an apparent U.S.-Iran ceasefire
extension. The circumstances remain fragile given the many advances that have failed to materialize in
previous negotiations but there are signs of progress. On Thursday, US officials reported the two countries
had agreed to a deal framework that would extend the ceasefire for 60 days and initiate a dialogue on
the future of Iran’s nuclear program. The deal reportedly could allow unrestricted passage through the
Strait of Hormuz and give Iran 30 days to remove mines from the passageway. The U.S. would also lift its
blockade on the Strait and issue sanction waivers allowing Iran to resume selling oil. However, the deal
has yet to receive official approval from President Trump or Iranian leadership. Markets are taking the
news positively heading into the weekend with equities pushing higher and crude prices moving lower.
The rest of the week’s economic data was less positive. On Thursday, Q1 real GDP was revised down to
1.6% annualized from the initial 2.0% estimate with AI investment the apparent main driver of growth.
April’s Personal Consumption Expenditures (PCE) index rose 0.4% MoM (vs 0.5% consensus) and 3.8%
YoY. While inflation is clearly ticking up, the core measure, which strips out food and energy, was less
pronounced. Core PCE came in at 0.2% MoM (vs 0.3% consensus), which marked the lightest reading
since November. Core PCE was up 3.3% for the year, in line with expectations.
Read on: Baker Market Update