Trump Rejects Iran Truce Offer, Oil Prices Soar Above $106
Oil prices surged on Monday after US President Donald Trump rejected Iran's proposal for a seven-day truce, reigniting concerns about global inflation. Tehran had offered to halt hostilities and reopen the Strait of Hormuz in exchange for the release of frozen assets, the lifting of sanctions on its oil, and an end to the US naval blockade.
However, Trump told reporters outside the White House that he rejects this proposal, stating 'I reject their proposal'. He added that indirect talks between Washington and Tehran could take place as early as Monday. The Strait of Hormuz is a critical waterway for global energy supply, and its closure has driven up oil prices.
The rejection of Iran's offer sent shockwaves through the markets, with Brent crude prices jumping above $106 per barrel and West Texas Intermediate rising 1% to $93.34. Asian equities were also affected, with Tokyo's Nikkei 225 down 0.3%, while Hong Kong's Hang Seng Index rose 0.7%. Bond yields climbed, reaching a four-year high of over 4%.
Analysts predict that the Federal Reserve may raise interest rates for a second consecutive time at its next policy meeting in October, citing inflation concerns. The US jobs report and inflation data this week will be closely watched by policymakers and investors alike.