US and Iran Trade Blows in the Middle East
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Well, Iran fired missiles at a U.S. air base in Qatar after promising it would respond proportionately and decisively to President Trump's weekend airstrikes on three of its nuclear facilities. Qatar said the barrage at Al Udeid base, the biggest such U.S. facility in the Middle East, was intercepted and that there were no casualties.

Carol, for a look at U.S. national security and the U.S.'s role in global security, we're going to bring in Nick Wadhams, Bloomberg News national security team leader. He joins us from our Washington, D.C. bureau. Hey, Nick. Good to have you here. I know it's been a busy week and a busy day. We're trying to understand a little bit what feels like military choreography, maybe, on the part of the U.S. and on the part of Iran, right? Missile strike on Qatar was telegraphed and had been expected by the U.S. and its allies, according to a person familiar.

And it's also, you know, you've got President Trump. He was telegraphing it's going to be within two weeks. And so did that give Iran a warning? You understand this world. Help me understand how military works today.

Right. I mean, so choreography is a really good word here. There is a sort of delicate dance going on after the president telegraphed his plans well in advance and then sort of tried to gauge what the potential reaction would be. U.S. carried out those strikes and then afterwards had a bunch of U.S. officials go on TV and say, hey, listen, this was a limited strike. It was aimed at the nuclear program, not against America.

Iran writ large. Then Iran feels it needs to retaliate and then it wants to sort of for its domestic audience portray this as a very big overwhelming response. But then the indication we're getting from Qatar and elsewhere is as you mentioned this was telegraphed well in advance.

It targeted a base that had been largely evacuated of valuable U.S. military assets. So a symbolic show of force, but it looks like when you dig a little bit, actually, the Iranian desire was not to cause too much damage. So the interpretation there is, okay, now they want to push toward a potential new conversation with the U.S. They want an off-ramp.

Two complicating factors to that. One is, of course, that Iran and Israel are still engaged in tit-for-tat exchanges, so that conflict hasn't ended. The other is, which we don't know, is this the end? Is Iran planning further attacks? They haven't issued a statement to say, hey, we're done here, let's move on. Right, that's a really good point. I mean, they did say proportionately and decisively. This doesn't seem proportional to...

attacks on three of its nuclear facilities. I think it doesn't take a nuclear scientist to make that conclusion, Nick. You know, I was thinking about this over the weekend. Other presidents have had the opportunity to strike Iran's nuclear targets. Did they avoid it because of fears of retaliation?

Yeah, I mean, I think there were a lot of questions there, the reasons why they avoided it. I mean, it was seen as too risky, potentially in terms of retaliation by Iran. The other question is a matter of efficacy. And one thing we don't know about these strikes, how much they actually obliterated the Iranian nuclear program, as President Trump claims. So there is a potential unintended consequence, which is you drive Iran's nuclear program deeper underground, both figuratively and

and literally so, does this produce the outcome you want? The other is obviously, well, what are the third, fourth, fifth order consequences of this, the unknown unknowns that we don't know about? You look at the Iraq War, 2003, folks thought, okay, we were going to be greeted as liberators when U.S. troops went in there. And then you look at what a mess everything became, the rise of the Islamic State, et cetera. So the question is,

Is this something Trump can just do and then get out? Or does this lead to a whole new conflict, the likes of which we just can't imagine right now? Well, Nick, on a global security basis, I mean, what are the implications and kind of optics of the U.S. actually getting involved, right? You know, it's one thing if they're behind the scenes and helping out and supporting, but they're involved.

Right. And, you know, there's the first order consequences, the issue of what the potential Iranian retaliation might be in the future, what this actually does to Iran's nuclear program. But then you have the other element, which is the United States just attacked a sovereign country, even though the U.S. intelligence community assessed that there was no imminent threat there.

to the U.S. So you could call this deterrence or a preventive strike. But is it, you know, was it too precipitous when you have a country like the U.S. that essentially says, hey, we're going to uphold this global order and then condemn a country like Russia for an attack on a sovereign country, i.e. Ukraine? What does that do to U.S. legitimacy in

and questions around U.S. authority when it goes after a sovereign country like Iran. You know, there's a concern that it's essentially opening up a Pandora's box. Right. And maybe opening it up to other countries doing the same thing. All right. Good to check in with you. Like I said, I know you guys all there in D.C. are super busy. Nick Wadhams, Bloomberg News National Security Team Leader, joining us from our Washington, D.C. bureau. Nick, thank you.

OK, so look at how U.S. government is thinking about potential retaliation from Iran. For more on how Iran navigates after the U.S. bombings over the weekend, we turn to Ariel Cohen, non-resident senior fellow at the Atlantic Council's Eurasia Center, also a member of the Council of Foreign Relations. He joins us from Washington, D.C. Dr. Cohen, good to have you with us this afternoon. I have a lot of questions about proportional retaliation.

But I want to know what, in your view, Iran is actually capable of right now. What is the state of Iran's military, its armed forces right now? What are they capable of? I believe that in a shorter range missiles, such as the missiles that they fired against U.S. base in Qatar, potential U.S. base in Iraq and Syria, we may see more attacks.

The main news here is that Iran went through sort of kind of performative retaliation. This was not mother of all retaliations because, A, they signaled, and B, they used the systems that were intercepted. And they knew that U.S. and Qatar could intercept their missiles. So what does it tell me? It tells me that

They did not throw the caution out of the window. They probably had intervention from China because China is a major customer for Iranian oil. Up to 15 percent of Chinese oil and even more so of Iranian oil goes to China.

And the Gulf states, because Qatar is a member of Gulf Cooperation Council, so is Oman. If they try to block the Strait of Hormuz, they would need to do it in the Omani waters. That's where the passage is.

So, they would be in conflict with all of the Gulf Cooperation Council, which is Arab, of course, and Sunni. And then you could couch this conflict in terms of Arab versus Iranian, Sunni versus Shia. They did not want to do it. They're not there yet.

In terms of are they going to do more retaliations, it really depends on the balance of power in Tehran. We see reports that Ayatollah is in hiding and nowhere to be found. The Ayatollah has to sign everything. So I do believe that once the elite in Tehran digests power,

THE SEVERITY OF THE BLOWS, BOTH ISRAELI AND AMERICAN, THERE WILL BE MASSIVE

changes in the regime. My sources are saying more than 60% chances that the Ayatollah will not stay here by the end of this year. Wow. Regime change. Wow. Okay. Better? Internal. Internal. Not U.S. imposed, not Israel imposed, but things will shift. And we know for years that IRGC, the Islamic Revolutionary Guard Corps,

the fist of the regime is not happy with the rule of the clerics. They want to run the show. They want to control all the goodies. They are aware that the Iranian economy was run into the ground by the clerics, and the Iran is very isolated. And as usual, there are different wings. There are more anti-Western wing, more radical wing, and more pragmatic wing. I have a couple questions. First of all, regime change...

will be for the better or we don't know like who is in the wings waiting to take over let's let's go down the list I mentioned irgc and I mentioned that there's a split within irgc this is the military um wing of the Islamic regime in addition there's a regular army which is less ID

less ideological, less politicized. They are a separate body. Some of these officers were officers back in the day even under the Shah. Now, of course, that generation is gone. Then there are liberals or technocrats in the regime. Then there are the monarchists, the crown prince of Iran, Reza,

lives about, what, five miles from where I live in Potomac, Maryland. - Yeah. - And then there are the Mujahideen, the Marxist wing that was fighting

DESPERATELY WITH THIS REGIME. THESE ARE ATHEISTS AND ONCE VIOLENT, SOME PEOPLE CALL THEM TERRORISTS. THAT'S ANOTHER FAR LEFT. YOU SEE THE SPECTRUM AND WHAT THE ISLAMISTS ARE DOING, THEY ARE MONOPOLIZING POWER. THEY'RE NOT TRANSITIONING THAT PRETTY SOPHISTICATED MODERN SOCIETY INTO SOME SEMBLANCE OF A DEMOCRATIC

machine that could balance the interests of different groups. So Dr. Cohen, if we do see a regime change or largely a regime change, is it better is such a poor word, but is it better on the other side for the people of Iran, for Iran's role in the region and maybe even, you know, globally? Look, this is a highly opaque question.

uh situation very difficult to predict i would say that if the system opens up if the system avoids a civil war which is a possibility also not necessarily a high possibility but a possibility um if the system brings more participation from the society imagine they have

the urban dweller, the city society that is educated. A lot of people with college education, a lot of people are looking towards the West, not towards China, not towards Russia, to model their society

And they're aware that women, 50 percent of the population, are abused and severely oppressed by that regime. We saw 900 plus, 982 people, I believe, in 2024 killed. We see torture. We see execution of gays. We see all kinds of brutal, barbaric behavior that a lot of people

city dwellers, educated Iranians are totally rejecting. There's a lot of sympathy towards the West, toward the United States, and even towards Israel. And the fact that the Israeli intelligence and other intelligence is so effective is because there is a lot of cooperation by the Iranians with Western intelligence services. That is fascinating to hear. Before even the possibility of talking about a different regime,

in Tehran, I think there are some questions now that Americans in the U.S. military and the president wants the answers to. For example, where is the enriched uranium now? If it left Fordow, do we have any idea? Absolutely.

We don't know if it left Firdo, but I can tell you one thing. That uranium is enriched to 60%, which is 20 times more enriched than what they need for the civilian nuclear reactor for electric power generation. That was a step before enriching to 80, 90% for the bomb.

They have enough uranium, according to open sources, to eight or nine bombs. They could have taken that uranium at 60 percent as they have it currently, package it into regular explosive with regular explosives, containerize it and blow it up in Israel, in the United States, in Europe, you name it. So it's a clear and present danger. And I disagree.

with the intelligent community assessment and with the gentleman who spoke before me, your security desk chief. Because no country builds a ballistic missile arsenal with longer range missiles that could reach Europe and are reaching Israel.

And all you need to do is add one more stage to that missile to make it an ICBM. And Iran already is building that capacity because they're putting satellites in space. So with 60% enrichment, that a step just before putting it in the warhead and they can get the warhead technology from North Korea, Russia, from China, from Pakistan. So they are a threshold country.

And what the United States and President Trump did was absolutely correct.

For the interest of the United States, we do not forget that since 1979, for 46 years, every Friday, these people are chanting, death to America, death to Israel. And they killed over 1,000 Americans. They tortured American officers, military officers. They killed American servicemen in the Khobar Towers, et cetera. They are a hostile power, and what Trump is trying to do is to put them down

APEC and possibly get to some kind of an agreement. In your view, did the U.S. go far enough with the bombing campaign on Saturday evening into the early hours of Sunday? Or does the U.S. need to do more? I think we went as far as we could. We used cutting edge technology.

THE HEAVY BUNKER BUSTER BOMBS, AND WE NEED TO DO A DAMAGE ASSESSMENT. ONCE WE HAVE A DAMAGE ASSESSMENT, AND IT WILL BE CLASSIFIED, I WON'T KNOW IT, THEN TRUMP

HEGSE, the head of Joint Chiefs, will reassess it with the National Security Council, with the intelligence community, reassess it and decide. But I think President Trump is trying to de-escalate now. And I think what this attack is telling me that the Iranians are playing ball. They want to walk away from this situation because they realize...

They're kind of crazy, but they're not stupid. They're realizing that more bombing campaign, both from Israel and from the United States, may signal the end of that regime.

- A million more questions I'd love to ask you. Can I just ask you 30 seconds? Does China being somewhat allied with Iran complicate things? And very quickly, if you could, like 25, 30 seconds. - China has a $400 billion investment agreement. I think it's 25 years stretch and they are buying a lot of Iranian oil and they're doing a lot of other things that Chinese do, infrastructure, roads, airports, et cetera.

The Chinese do not want that agreement to be destroyed. And I would recommend to anybody who is engaged in Iran, tell the Chinese, don't worry, your investment is safe. Same thing as we should have done with the Russians in Iraq. I advocated that back in 2003. And the Bush administration did not listen. And we turned Russia against us.

Now, the Russians are being very cautious. The Russians had that defense agreement with Iran, but it did not include mutual defense, mutual military activity. And the Chinese, again, it's very opaque. We do not know what they're supplying, possibly some missile technology.

to Iran came from China. We don't know that for sure. But the Chinese are very, very cautious because they don't have the power projection capability in the Gulf like the United States. Very interesting. Thank you so much. So appreciate your time today. Errol Cohen, non-resident senior fellow at the Atlantic Council's Eurasia Center and a member of the Council of Foreign Relations joining us from Washington, D.C.

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Well, against the backdrop of a war in the Middle East that the U.S. is now involved, an ongoing tariff trade war, we're just a few weeks from that July deadline. Rising oil prices, Carol, potential disruptions in shipping through the crucial Strait of Hormuz. The macroeconomic background is certainly complex. There's a lot for investors to wade through. Yeah, absolutely. Although risk on in today's trade. Torsten Slag is chief economist.

partner over at Apollo Global Management joining us from New York. Torsten, you did send, first of all, welcome, welcome. Good to have you here.

You sent a note out this morning that included data for ship crossings in the Strait of Hormuz. It's Bloomberg data. It does show a decline in traffic both west to east, east to west. Is this your main macroeconomic concern when it comes to what we are watching in the Middle East and the potential for even further escalations, escalation? And I guess not just escalation, but a longer duration of conflict.

I think the bigger picture really here is that we already have an economy that is experiencing stagflation. We have tariffs higher means higher inflation, lower GDP growth. We also have restrictions on immigration, many deportations, meaning if you lower the labor force at the moment, the administration has to state a goal of lowering labor force by about a million people. And of course, if you do that, you would also begin to have more upward

pressure on inflation, specifically wage inflation. And of course, also downward pressure on employment and therefore economic activity. And now if we add to that the risks here to oil prices. Yes, I do understand that oil prices are now going down and some special reasons for that. But the fear, of course, here is that

IF THE OIL PRICE INCREASE THAT WE'VE SEEN SINCE THE BEGINNING OF JUNE, IF THAT IS CONTINUOUSLY HANGING AT THE CURRENT LEVELS OR EVEN GOES HIGHER, OF COURSE, THAT WILL ALSO BE STACKFLATION, MEANING PUTTING UPWARD PRESSURE ON INFLATION AND DOWNWARD PRESSURE ON GDP. SO IN SUMMARY,

adding everything together where we stand at the moment, we just have that the economy is hit by a number of shocks that have the same characteristics, namely higher inflation and lower GDP. Torsten, you've been beating this drum for a while, and I was surprised because I read the notes that you sent. Perhaps I was surprised to hear Jay Powell essentially say last week that everything is OK. They're

There are no issues starting to form anywhere. That was the takeaway I got. Maybe we'll hear something different tomorrow and Wednesday when we hear from the Fed chair on Capitol Hill. Do you think that the Fed chair is incorrect with his assessment of the economy? Tim, this is really, really important because what's also very interesting is that last week, Chris Waller began to talk about rate cut in July. And today we had Mickey Bowman first talk about rate cut also now in July. And now we also have Goldsby talking about that. Well, the dust is,

may have been cleared in the air and maybe there's now room for cutting rates. That's very interesting when Jay Powell last week very clearly said word for word, we expect a meaningful increase in inflation over the coming months. So it's telling you that this rise in inflation that's coming as a result of all the prices already have gone up this as a result of tariffs already having, of course, gone up and also as a result of potential upper pressure on wage inflation that the Fed is deciding to almost look through the coming rise in inflation and focus more

on the worries about growth slowing down. So yes, Fed watching here at the moment is very interesting simply because the dual mandate is torn in opposite directions. On the one hand, when inflation is going up, the Fed should be hiking. On the other hand, when growth is slowing down, the Fed should be cutting. So where do they put their weight?

And the last few Fed speakers have clearly said, including today, both Goldsby and Bowman, that the focus should be on growth slowing down. So that's why we are probably moving more towards more rate cuts coming faster than what the market was pricing just even a few days ago. I just want to add in one caveat from Austin Goolsbee, where he said, of course, Federal Reserve Bank of Chicago President Austin Goolsbee, he says the central bank could resume interest rates.

cuts if the inflation hit from tariffs remains subdued. Don't we have to kind of wait a few months to see? Because ultimately, we're going to find out hopefully very soon in terms of what the tariffs really are and how they play out. But at any rate, it is going to be higher than it was before. There will be some cost pressures potentially. Absolutely.

Absolutely. And that's why what's really interesting, Harald, about this issue and this debate is, of course, this difference between what Jay Powell said last Wednesday. And now we've had three speakers since then that go out and basically say something a little bit different. They are all, of course, conditioning and on saying if inflation is not a problem,

THE EARLY END OF THE YEAR. IF WE HAVE A PROBLEM, THEN WE'LL BE CUTTING. BUT HERE THE KEY QUESTION BECOMES WHAT DOES A PROBLEM MEAN? IF I ON MY BLOOMBERG SCREEN TYPE E CFC GO AND I START LOOKING AT THE CONTENTUOUS FORECAST TO INFLATION, YOU WILL SEE THAT THE EXPECTATION IS INFLATION WILL GO UP FROM 2.6 IN THIS QUARTER TO 3.3 BY THE END OF THE YEAR.

INFLATION? IS THE FED JUST GOING TO IGNORE THAT RISE AND SAY WE'RE JUST GOING TO CUT INTEREST RATES AND IGNORE INFLATION IS GOING UP? THAT'S WHY IT STILL REMAINS TO BE SEEN WITH THE NEXT FOMC MEETING WHAT THEY ACTUALLY ARE AS A COMMITTEE THINKING BECAUSE IT'S VERY CLEAR THAT THESE INDIVIDUAL MEMBERS THAT ARE MOVING IN THE DIRECTION OF MORE CUTS, YOU'RE RIGHT THAT THERE ARE MORE NUANCES AS BOTH GOLDSBY WAS ALSO POINTING OUT IN HIS SPEECH.

but definitely also in contrast to what Jay Powell was saying last week. Yeah, it's amazing how fast and furious it's coming. Having said that, so then the idea of stagflation, I mean, I know we've talked about it. We've talked about it a lot here at Bloomberg. Is that still...

I still think that it's a high possibility at least this is what the consensus is expecting if I do look at that Bloomberg screen that shows you the consensus expectation again ECFC go. Then it will tell you that there is the expectation inflation is going up and this was also and GDP growing down this was also what the Fed did last week and the SEP in the forecast that the Fed published they raised inflation this year to 3 percent by the end of the year and they lowered GDP growth to 1.4 percent. That means quite a lot of

uncomfortable for investors scenario because should I put weight on inflation going up on growth slowing down in terms of what the Fed will do and now the Fed seems to be leaning at least with the latest FOMC members towards saying hey we're just going to ignore the rise in inflation it's probably just temporary and then we're going to cut rates but that

is where the debate needs to be, again, more clear in terms of what is it that they're saying today relative to what Jay Powell actually said last Wednesday. You know, I'm curious because, look, you're an economist. You're not going to tell us what stocks to buy or, you know, what equities or what assets to own. But you do work for an asset manager. And the idea is that you advise people there about what to do.

What should investors be doing in a situation like this? Because by the sound of it, it seems like maybe you think the equity market has it wrong right now. I do think the public equity market has it wrong. So here is the answer to your question. What should investors do? They should do three things. The key outcome of everything we're talking about here is that interest rates will be high.

higher for longer meaning we're not going down to zero interest rates or to dramatically lower interest rates. Yes the market is pricing somewhere between one and two cuts this year but that's not much. That means that the level of interest rates this year will still be high and next year the Fed also just published their forecast saying that interest rates will be high. And what should you do when interest rates are higher for

longer, you should be up in quality, up in quality in credit and private credit. That means first lien, senior secured, top of the capital structure to get the best protection you can get against the risk of a sharper slowdown. But it must be high quality assets, high quality credit to make sure that you're protected against the downside risks that comes with this risk of growth slowing down at the same time. The second thing that's interesting. Yeah, sorry, there's just two more things, Carol. The second thing that's interesting for investors is, of course, also the things

that comes with dislocation funds. That means secondaries in PE, that means dislocation funds also in when it comes to the broader entry point for private credit and for markets. And the last thing that's interesting is of course, thematic investing, things that are as far away as you could get from the trade war. So that will be infrastructure, data center, energy transition, climate, things that are long duration assets that have nothing to do with the near term outlook. - All right, 15 seconds. On the 10 year, is 5% not even a consideration in your world or could it happen?

I absolutely think that long-term interest rates are going up. So short-term interest rates are going up because of inflation. Long-term interest rates are going up because of partly inflation, but also because of the fiscal challenges. So there is upward pressure on the whole yield curve for these different reasons. Even 5%? Yes or no? Real quick. Yeah. You think he said yes? I think I saw him say yes. Torsten, yes. Thank you. Torsten Slack over at Apollo Global Management. This is Bloomberg Businessweek Daily.

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It's the question that drives us.

This is the drive to the close. On Bloomberg Radio. All right, TikTok, everybody. Yeah, we got about just under 17 minutes to go until we wrap up the trade on this Monday. It's been an interesting one. Maybe not as expected. We've seen the markets kind of all over the place. And right now we are hovering near our highs of the day. So we're up almost eight tenths of a percent on the S&P 500, up seven tenths of a percent in the Dow Jones Industrial Average of more than 300.

point move to the upside for the Dow. NASDAQ 100 up almost 200 points, Tim, good for a gain of about nine-tenths of a percent. But keep in mind, we were lower when the initial strikes by Iran on Qatar hit.

And then I think the perception was that it wasn't as maybe big as it could have been or as, you know, devastating, I guess. And so we saw markets bounce off in a big way. Oil's been down. You know, I think what I found pretty shocking just being in, this is the day when you want to be a fly on a wall in a newsroom because we're following the headlines. The markets are moving with the headlines at 1233 p.m. Wall Street time.

We saw stocks fall because the Wall Street Journal reported that Iran moved mantras for a possible attack on U.S. forces. And then less than an hour later, we get this headline. Qatar says it successfully intercepted Iran missile attack. We see a breath of relief.

in the markets and we start to see them move higher. Yeah, exactly. If I'm going back to crude futures, which were up more than 6% at their high today, they're down almost 7% as we speak. I go back to our conversation with Nick Wadhams about the choreography. Like I just, there's, you know, we'll see, we'll see where this all lands. I want to see what Megan Horniman has to say about this. She's chief investment officer at Verdans Capital Advisor. She joins us from Hunt Valley, Maryland. Megan, I want to let everybody know that in the notes that

You sent out today, you make the point that you are market specialists, not political experts. So we're not going to ask you about the politics of this. We're going to ask you about the market reaction. It's been muted on the equity side. We saw oil go up. Now oil go down. Why a muted reaction to a military operation and escalating conflict such as this?

So I think coming in this morning, and we can talk about equities first. When we came in this morning, it was. It was a muted reaction. Equity futures were actually up before the market opened. And then it was relatively positive, but not by much. And I think that markets were just awaiting what was going to happen next.

And I think the surprise that Qatar was being, Iran had launched missiles against Qatar, the markets reacted to the fact that this was a better than expected, I guess, reaction from Iran. So what we saw was the markets down when the news broke that they were going to attack Qatar, and then them come back

all the way back now sitting here near record highs as the market seeing that hey that this was not that big of a move. So I think the market's just celebrating the fact that there hasn't been anything major yet and the the retaliation efforts that Iran has taken thus far haven't been that detrimental. Are you surprised. I mean

I think, you know, we came in and it felt a little quiet. And then, of course, the headlines, you know, started around midday in terms of what's going on in Qatar. But it just felt like an uneasy quiet, certainly this morning. Are you surprised by the market reaction? Or what does it tell you maybe more longer term? Or maybe nothing? Yeah.

No, I was a bit surprised this morning that it was so quiet. Even the VIX index really didn't move much. I mean, it was more than, you know, less than half of what we saw during the liberation spike, what we saw in volatility. So I was a bit surprised that the equity markets were relatively muted. I'm a bit more surprised that equity markets

oil futures have sold off so much. I don't think that's behind us. I do think any disruption in the Middle East can have an impact on oil prices. So I'm a little surprised at how quickly they decline. I mean, we're down on the day. That's surprising when we're looking at such a dramatic impact that we saw over the weekend in Iran. I think we're still up, though, about, I want to say about 4% since that initial Israel attack

on Iran. So I think we're still up, but you're right. Today, you know, we're down a lot. We've seen actually a pretty big swing. So what do you do for clients right now? Mm-hmm.

Well, first of all, we have to not be complacent. We have to realize that, yes, we haven't seen any major retaliatory impacts from Iran. It does look like we've weakened them in some respect. But don't be complacent either. We still do have a conflict in the Middle East, and that can have impacts on the market. And what we've seen with history, if you look at any of the different military actions the U.S. has taken,

They tend to see some weakness, but positive equity markets in the long term. So that's what we're telling clients right now. We're focusing on the long term. We're not going to get emotional and just sell everything because of this conflict. Instead, we're going to look at long-term fundamentals, U.S. economy. The Fed still is on the table to be able to cut rates this year. The economy is weakening, but not completely falling off a cliff. And we're seeing that consumers, the confidence has been very weak, but consumers still

are out there. So there are some positives to note. Don't forget, there's several things, though, coming up in the next couple weeks where we also don't want to be complacent. We have earnings season picking up, and then we still have that July 9th deadline from a tariff perspective. Don't be complacent on some of these other risks that are out there. So don't sell into this, but I wouldn't necessarily be buying into this either. What changes your view, though? What makes you either run for the hills or says, okay, we better strap in for the long haul here? Ooh.

I think if we start to see this intensify and broaden out beyond just Iran and Israel, if other countries get involved, that obviously wouldn't make me a bit more concerned. Like the U.S. did over the weekend?

Well, the U.S., again, has been trying to get Iran to the negotiating table for many, many months. And this has failed and failed and failed. And it's not just, you know, this has been many administrations. So, again, the U.S. to get involved in this. The U.S. has also clearly said this isn't a declaration of war. The other countries where we get China, Russia, some of these other big powerhouses involved, that's going to

be a concern for me. If it does escalate beyond just these missiles that are going into Israel that are being intercepted by their dome, that's a concern as well because they are one of our key allies. Megan, thanks so much. Megan Horniman, she's Chief Investment Officer of Ed Verdon's Capital Advisors, joining us from Maryland on this Monday.

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