President Donald Trump's announcement of a joint U.S.-Israeli surprise attack on Iran in February was met with little enthusiasm in Europe, where leaders were quick to warn of the political and economic turmoil that America's latest Middle East campaign would unleash.

Seven weeks on, no European nations have joined the U.S.-Israeli war, despite near-constant pressure from Trump to do so. Some European nations have allowed U.S. forces to continue using key military bases to launch attacks and have taken part in defensive operations to shoot down Iranian munitions targeting regional bases and nations.

But there appears to be little appetite for a full and open-ended entanglement with Iran among European voters, even those who support the nationalist, anti-establishment parties that have sought to align themselves with the second Trump White House. (ABC – Continue Reading)

The Federal Reserve has entered its quiet period ahead of the 29 April FOMC meeting, but it will still be drawing headlines given Kevin Warsh's confirmation hearing to become Federal Reserve Chair is being held tomorrow. Once viewed as a hawk when he previously served as a Fed Governor (February 2006-March 2011), he has been nominated by President Trump, who has demanded much lower interest rates from current incumbent, Jerome Powell.

Warsh will inevitably be questioned on how closely aligned he is with the President's thinking. We imagine he will indicate a belief that, over time, lower interest rates make sense. However, preserving market credibility is of paramount importance and there must be justification.

The Iran conflict-induced jump in motor fuel costs creates near-term challenges in an environment where both core and headline consumer price inflation have exceeded the 2% target throughout the past five years. He will be wary of coming across as too dovish. That could heighten market fears of potential unanchored market inflation expectations, prompting higher long-term borrowing costs. (ING – Continue Reading)

President Trump told reporters to expect a peace deal with Iran by Monday, and said Monday morning that Vice President Vance was heading to Islamabad for talks.

- But Vance was actually still in Washington, waiting for a signal from Tehran before boarding his plane — a sign of the deep uncertainty over what will happen next.

The big picture: Trump wants the war to end, now, on his terms. But there's only one day left before the ceasefire expires, Iran still controls the Strait of Hormuz, and the sides have thus far been unable to even set a meeting. The war may therefore be on the precipice of a massive expansion. (Axios – Continue Reading)

The U.S. risk outlook has deteriorated entering 2Q26, with the U.S.-Iran war and AI-driven software disruption emerging as the two dominant credit themes, says Fitch Ratings.

In a prolonged war scenario, macroeconomic headwinds would be significant, driven by higher inflation, lower real wages, tighter financing conditions and broader demand weakness. Fitch's adverse scenario, which assumes oil prices average $100/barrel for 2026, implies U.S. GDP growth of 1.5% in 2026, roughly 0.7 percentage points below Fitch's base case. The maximum impact would be felt after four quarters, with growth falling to just 0.6% year-on-year in 4Q26, versus 1.8% in Fitch's March Global Economic Outlook baseline. Higher inflation would complicate the Federal Reserve's rate path and delay expected rate cuts. Consumer-facing sectors, housing and airlines face the most acute second-order headwinds, while upstream energy and aerospace and defence could benefit. (Fitch – Continue Reading)