President Trump faces a conundrum: How to reopen the Straight of Hormuz, lower global energy prices and wind down an increasingly unpopular conflict that has caused the biggest oil supply disruptionin history ahead of midterm elections in November.
Brent crude has jumped 50% since the start of the war, with traders fearing a fresh escalation in hostilities between the US and Iran after Trump’s visit to China failed to yield any concrete progress on a plan to restart the Strait of Hormuz.10year TYs have risen from below 4.0% at the end of February to 4.59% today, which reduces the valuation support for all equities, but particularly long duration equities such as $Tesla(TSLA.US). President Trump has no one to blame for this situation but himself. If oil and int rates stay high through November, the Republicans can blame Trump for losing the House or the Senate or both in the mid-term elections.
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