Bonds & Stocks
Relative calm returned to global markets, with stocks rising and oil falling as signs that a US-Iran ceasefire is still in place reduced fears about a full-scale war that could hamper the economic outlook. The S&P 500 rose 0.6%. The yield on 10-year Treasuries declined two basis points to 4.42%.
Economy
Federal Reserve Governor Michael Barr said stress in private credit could spark “psychological contagion” leading to a broader credit crunch, once again warning against loosening the reins on Wall Street at a time of rising risks. In an interview with Bloomberg News, Barr said that while direct links between banks and private credit do not yet appear “super worrisome,” there were other areas of concern such as the insurance sector’s overlaps with private lenders.
World
The US played down the prospect of a return to active war with Iran after a day of clashes involving ships in the Strait of Hormuz and missile strikes against the United Arab Emirates.