News

• On Iran blockade says anything that is taken off will be taken off slowly
• There are 3 scenarios on Iran: deal, no deal, or kinetic action
• There's more we can do on Iran if we have to
• See real wage growth to resume, on the other side of the war
• 100% approve of the Fed getting rid of forward guidance
• Rates peaked the day before Warsh was sworn in
• People have a wrong notion of what a strong dollar means
• A strong dollar means doing the right things for the economy
• When asked about maintaining the dollar as a reserve currency he said nothing has changed

US Treasury Secretary Scott Bessent said the administration remains committed to pursuing a diplomatic resolution with Iran but warned that alternative options remain on the table if negotiations fail, while also offering a robust defense of the Federal Reserve's evolving policy framework and the long-term strength of the US dollar.

Speaking about ongoing discussions with Iran, Bessent indicated that any easing of restrictions related to the US naval blockade would be implemented gradually rather than all at once.

He outlined what he described as three possible paths forward for the standoff with Iran: a negotiated agreement, a failure to reach a deal, or military action.

While emphasizing the administration's preference for diplomacy, Bessent stressed that the US retains additional tools if negotiations break down.

On the domestic economy, Bessent struck an optimistic tone, arguing that real wage growth could strengthen once the current geopolitical conflict subsides and uncertainty begins to fade.

Bessent also weighed in on monetary policy, offering strong support for the Federal Reserve's decision to move away from explicit forward guidance as a central communication tool.

The comments reflect a growing view among some policymakers that excessive reliance on pre-signaled policy paths can reduce flexibility and create market distortions when economic conditions change unexpectedly. Bessent suggested that a more data-dependent approach allows policymakers to respond more effectively to evolving economic circumstances.

Turning to the dollar, Bessent rejected what he described as common misconceptions about currency strength. Rather than focusing solely on the exchange rate, Bessent argued that a strong dollar should be understood as the product of sound economic policy, sustainable growth, and confidence in US institutions.

His remarks come amid ongoing debate over whether a stronger or weaker currency better serves US economic interests. Bessent's comments suggest the administration continues to view the dollar's strength as a reflection of broader economic fundamentals rather than a specific exchange-rate target.

When asked about maintaining the dollar's status as the world's primary reserve currency, Bessent sought to reassure markets that there had been no change in policy.

The statement is likely aimed at reinforcing confidence in the dollar's central role in global finance at a time when some geopolitical rivals have sought to reduce their dependence on the US currency for international trade and reserves.

All is not quiet in Iran, loud explosions reported via multiple media sources. Cause unknown.

Markets are focused on the good news out of negotiations right now. Nevertheless, conflict continues.

Daily Pivots: (S1) 1.1603; (P) 1.1637; (R1) 1.1658; More…. Intraday bias in EUR/USD is turned neutral with current recovery, and some consolidations could be seen above 1.1607 temporary low. Risk will stay on the downside as long as 55 4H EMA (now at 1.1700) holds. Rebound from 1.1408 could have completed as a corrective three-wave […]

The post EUR/USD Mid-Day Outlook appeared first on ActionForex.

Japan March household spending data for March is poor.

Fell 2.9% y/y

• expected -1.5%, prior -1.8%

For the m/m the fall was 1.3%

• expected +0.6%, prior -1.5%

US Customs and Border Protection says the first electronic refunds from tariffs ruled illegal by the Supreme Court will begin as early as May 12, with up to $166bn in collected duties subject to repayment.

Summary:

• US Customs and Border Protection said on Monday that the first electronic refunds from tariffs ruled illegal by the Supreme Court will begin as early as May 12, one day later than a prior estimate, per the CBP announcement
• The revised start date for Automated Clearing House payments was disclosed in a message to shippers that also announced the availability of status reports allowing claimants to track refund processing, according to the CBP
• A Court of International Trade order last week had indicated refunds would begin around May 11, with no explanation given for the one-day delay, per the report
• Up to $166 billion in CBP collections derived from tariffs imposed under the International Emergency Economic Powers Act are subject to repayment following the Supreme Court ruling, according to the report
• The Supreme Court ruled that President Trump exceeded his authority in using the 1977 IEEPA sanctions law as the legal basis for imposing the tariffs, per the ruling

The United States is preparing to begin repaying up to $166 billion in tariff receipts after the Supreme Court ruled that President Donald Trump exceeded his legal authority in imposing them, with Customs and Border Protection confirming the first electronic refunds will flow as early as May 12.

CBP announced the revised start date in a communication to shippers that also introduced status reporting tools allowing claimants to monitor where their refund stands in the processing queue. The one-day slip from an earlier May 11 estimate, set out in a Court of International Trade order last week, was offered without explanation.

The tariffs in question were levied under the International Emergency Economic Powers Act, a 1977 law designed as a sanctions mechanism that the Trump administration repurposed as the legal foundation for sweeping import duties. The Supreme Court determined that using IEEPA in that way exceeded presidential authority, invalidating the collections and triggering the repayment obligation now working its way through CBP's systems.

The ruling carries consequences well beyond the refund mechanics. IEEPA had become a central instrument of Trump's trade policy, and its judicial invalidation removes one of the administration's most flexible tools for applying tariff pressure without congressional approval. The $166 billion figure represents the cumulative collections subject to challenge, making this one of the largest forced fiscal reversals in recent US trade history.

For businesses that paid the duties, the refunds arrive after months of margin pressure and supply chain adjustment undertaken on the assumption that the tariffs were a permanent feature of the trading environment. The May 12 start date marks the beginning of what is likely to be a lengthy disbursement process given the volume of claims involved.

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A $166 billion refund pipeline flowing back to importers represents a meaningful, if one-off, liquidity injection into the US corporate sector, with the largest beneficiaries likely to be high-volume goods importers in retail, electronics and manufacturing. The scale of the refunds also underscores the fiscal cost of the Supreme Court's ruling for the US government, removing a significant revenue stream that had been factored into near-term budget projections. For trade policy, the ruling and its financial consequences narrow the administration's room to use IEEPA as a tariff mechanism going forward, potentially shifting leverage in ongoing trade negotiations. Currency and bond markets will be watching whether the refund disbursements affect Treasury issuance planning in the weeks ahead.