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Joe Weisenthal
Joe and I of course, are tracking the developments when it comes to the war with Iran, which is still still continuing on day 26. Israel and the US continuing to strike targets in and around Iran. Iran continuing its retaliatory strikes really all throughout the Gulf, despite the fact that the President is pushing for a deal, says Iran wants the same that there may be a diplomatic off ramp that is being pursued here by the US at least, though Iran right now is rejecting the US's 15 point plan that it initially put forward. And of course the President still maintains that even as he looks for a deal to end this war, the war itself is already won. This is what he said yesterday.
Rick Davis
We've won this. This war has been won.
Narrator/Host
They have no navy left, they have
Rick Davis
no air force left, they have no
Kelly Evans
anti aircraft equipment left, no radar left, no leaders left.
Rick Davis
The leaders are all gone.
Kelly Evans
Nobody knows who to talk to. But we're actually talking to the right
Narrator/Host
people and they want to make a deal so badly.
Kelly Evans
That has been challenged by the rhetoric that we've been hearing from Iran pushing back on the 15 point plan and in fact suggesting conditions of its own, including the closure of all American bases in the Gulf, the payment of reparations for missile attacks against Iran and the lifting of all existing sanctions. It does not sound like we're getting closer to a deal, but that's why we have Adam Farah to talk to a true expert here, Bloomberg Economics Senior Geo Economics Analyst Adam, it's great to see you back. The last 24 hours have been very confusing for a lot of people. Should the markets be optimistic the way they appear to be feeling today?
Adam Farah
So it certainly seems that the markets are moving on the vibes of the President and the President alone, notwithstanding the fact that it is probably unfair to judge exclusively on how the Iranians are responding publicly to these Conversations tell us why? Because when we the reality is the Iranians have a lot of constituencies they have to handle and particularly with a hard line leadership that is taking control, they have to be very careful as to how they articulate the next steps in this conflict. On one hand, we're absolutely right. And this narrative we've talked about here at Bloomberg a lot is that the Iranians feel more empowered now than they have at any point during the war. They feel like the pressure is building on the United States, not on them. They're still taking a lot of hits, but that the energy consequences of the Strait of Hormuz remaining closed will hurt the United States and our partners globally more than Iran. That said, they are taking a lot of hits. Right. Iran is getting battered by an ongoing air campaign that has not let up, as you said in the intro. And so there are reasons for them to want to bring this to a close on their own timeline. And even though they, you know, over the last 48 hours we had them saying we're not talking, we're not even engaging, there are now indications that someone's talking. Right. And it does look like there's there was some element of showing they were, they were talking to the right people with the administration by allowing one at one vessel through the Strait of Hormuz yesterday, again, trying to start this conversation. But the proof will be if substantive conversations really move forward in this conversation now about maybe J.D. vance leading a U.S. delegation to Pakistan. I guess, yeah.
Joe Weisenthal
The president suggesting advance, Witkoff, Kushner, Rubio, they were all be involved in these conversations if the conversations ultimately direct ones even happen. I also wonder, Adam, about the increased buildup in assets we are seeing once again while this diplomatic path apparently is being pursued. This is what happened before the initial strikes. We saw an amassing forces in the Middle East. The second aircraft strike group, carrier strike group was on the way as they were talking in Geneva. Now you have thousands more troops headed to the region as they're supposedly looking at talking or at least pushing for talks. Why would Iran buy that a second time?
Adam Farah
So I think there's no doubt that they view it the way you just described. And the, the reality is that the war has not stopped, as we've said, and that the United States now has the better part of 8,000 plus ground troops that are moving into the region with the announcement of elements of the 82nd Airborne that's going to, that could be arriving in the coming and weeks. But the question here that is a little different is that the risks of implementing a ground invasion are so much higher, both militarily and politically for the administration that it probably is in a different category than what we saw with the buildup of aviation assets and naval assets in the lead up to the initial engagement. That doesn't mean it's off the table. Right. I think the president is willing to escalate to theoretically force the Iranians to de escalate, but the choice there is much more stark than dropping bombs from afar.
Kelly Evans
Interesting. We've set ourselves up then for, I guess, at a pretty important deadline after the closing bell on Friday. Should the market be holding its breath at that point?
Adam Farah
Well, certainly not sure if the five days are the deadline we really need to be looking at. Within that timeline, we do get theoretically the arrival of that first Marine contingent from Japan, but the remainder of that force, both the 82nd Airborne and the other Marines, won't arrive for, for a much longer period of time, maybe several weeks. So it's certainly possible the administration could some sort of limited ground incursion, as you said, in Cargill island or another
Narrator/Host
part of the Gulf.
Adam Farah
But in and of itself, I am not sure the five days is make or break. I think more importantly, the president will probably be hoping that it moves away from a conversation of the United States bombing energy infrastructure, which he seems to have decided not to do, at least for now.
Joe Weisenthal
Adam Fair, thank you so much for joining us. Bloomberg Economics senior Geo Geo Economics analyst here with us in our Washington, D.C. studio. But we go now to Capitol Hill, where we're joined by Republican Congressman Marlon Stutzman of Indiana's Third District. Welcome back to Bloomberg TV and Radio. Congressman, appreciate you joining us. I'm sure you heard part of our conversation there with Adam. Despite the president's pursuit of a deal, this war is still ongoing. And that means that we are still spending money in the Middle east, which raises the specter once again of a potential supplemental funding request. I know that that has not yet been received, but considering you sit on the Budget Committee, I'm wondering if it is your expectation, your base case, that it will just be a simple, simple supplemental or ultimately if this is going to be folded into a wider budget reconciliation process.
Adam Farah
Yeah. Kelly, great to be with you. And Joe, thanks for having me. But yeah, great question. As we've been talking here on the Hill, it looks like the number is going to be around that $200 billion number and there's, there's the ability to offset that. More than likely, it probably is done through a reconciliation package. That's that's what I'm pushing for. That's what I'm, you know, working with colleagues on the Budget Committee. To do that would require only 51 votes in the Senate under a reconciliation process. That way we don't have to worry about what we're seeing right now with DHS not being funded because of the filibuster rule. But this is, you know, obviously a critical moment as assessments are being done. Of course, the, the work that our men and women did with, through the air and from our ships in the region did a remarkable job. And, but, but knowing now what's happening next with a transition and who is going to transition to, does make a big difference to all of us. And so we're really watching and waiting to see how President Trump and the team is a team handle the negotiations going forward.
Kelly Evans
What are you hearing from voters in your state, Congressman? I'm looking at Triple A here, $3.98 a gallon. Nationally, you're above $4 on average in the state of Indiana. How many weeks can people take of this?
Adam Farah
Yeah, I mean, you know, it obviously affects people immediately. I mean, you know, we all kind of gauge our economic attitude by, by the gas pump. You know, my boys are calling me up and saying, dad, gas is up because of this. But I think, you know, as I explained to people, and most people understand the threat that Iran has been for four decades, that this is hopefully the, the beginning of the end of, of their proxies in the Middle east and the disruptions that they cause. Of course, their ability. They have a lot of money. I mean, the oil and gas that comes out of Iran is substantial. I mean, it, this regime has their hands on, you know, billions and billions of dollars that they can sustain this for, for some time. But I think that, you know, as I was talking to a friend whose family is still in Iran, she said that, you know, many of the people that are there are hesitant to go out in the streets because of what they saw a couple of months ago with the protests where the IRGC just simply went out and killed, you know, anywhere between 30 and 50,000 people. So they're really hopeful that something comes, somebody comes in with some sort of ability to defend them and themselves, to take out the IRGC and the regime that's there. So there's obviously still a lot of hope on both sides that the IRGC's days are numbered, that the ayatollah, of course, the senior ayatollah is dead, but who's in charge now still remains to be seen.
Joe Weisenthal
Well, as your boys call you about gas prices, I also what you're hearing, wonder what you're hearing, Congressman, from other constituents like those that may be in the agricultural sector as we consider also fertilizer, the wider economic impacts of how high diesel prices specifically are. When we think about goods being moved throughout the country, whose voices on that are the loudest right now?
Adam Farah
Yeah, well, agriculture, I mean it has been difficult for several years now. And you know, this does cause of course disruption. Most fertilizers would have been pre purchased or they would have had those prices locked in. Diesel prices. Some may, some may not depending on their financial situation. But you know, a lot of the larger operations would have a lot of that already placed for pricing. But it does have an effect. There's no doubt about it. And that's why, you know, I know President Trump is very aware of that. We have of course shared our concerns about a long term conflict that would cause prices to stay up. But I think at the same time, and you know, the ag community has been so supportive of President Trump, but this does cause issues, especially coming off of a couple of tough years. So, you know, I know that President Trump is aware, he's already made, is having conversations with China. They're obviously the biggest beneficiary of the oil and gas that comes out of that particular region along with other countries. His conversations with India are really critically important. And so I think, you know, a month from now a lot is going to change. As you stated earlier that the, the markets seem to be reacting more positively. And I think that's just simply the, the instability is starting to move out of the market and some sort of end is hopefully in sight. Obviously, if things change, the markets will go the other direction quickly and they
Kelly Evans
will tell us loudly, I'm sure. Congressman, I have to ask you about the Department of Homeland Security. I believe we are now on day 39 of the DHS shutdown and there was a lot of optimism yesterday about a deal that seems to have come crashing down with Senate Democrats saying that they just haven't seen the reforms at ICE that they need to see to vote. Yes. This idea of siphoning off ICE funding is apparently not going to going to be happening and funding the rest of dhs. We talked to your colleague from Massachusetts, the Democrat Jake Auchincloss, about the offers that have been on the table. Gave us a sense of how far apart everyone is. Congressman, here's what he said.
Adam Farah
It is totally unacceptable for our TSA agents to be working on aid and Democrats are ready to fund TSA today. Number two, the claim from the Senate Majority Leader that somehow ICE is unfunded. Just as not true. Last year they put through on a party line vote $75 billion of funding for ICE over four years. Finally, the impediment is absolutely not Democrats willingness to look at this deal. The impediment is that the President said that he's only willing to look at a deal if it's paired with the SAVE act, which is a voter suppression measure.
Kelly Evans
I realize that that SAVE act might be moving to reconciliation, but so too might ICE funding. Congressman, would you support knowing that ICE is funded, funding the rest of DHS and getting TSA workers paid?
Adam Farah
Absolutely. And I think that, you know, there's a, there's obviously the debate with the Save America act in the Senate right now, but that does not have to be paired with funding dhs. The House of Representatives, Republican controlled and led by Speaker Mike Johnson. We send over funding for DHS alone separate from the Save America Act. So these two could be handled separately. By conflating the conversation is what's confusing to people. And so I think that we have to be, you know, straight up with the American people that these can be handled separately. And you know, we're already starting to see that the President had some success by using ICE agents out at the airports that helped get those lines through. And my suspicion is, is that he'll continue to do so. He's just not going to bend on some of the reforms, the so called reforms that the Democrats want the ICE agents to be held by. And I think that the Democrats, the sooner we get just an agreement made on funding dhs, then we can go back and continue to talk about the way ICE is behaving much better and much differently than what it was about three months ago. So I would hope that they would realize that the administration made some really critical changes to be sure that we didn't see more problems like we saw up in Minnesota.
Joe Weisenthal
And finally, Congressman, as the President of course initially wanted the Save America act included in this push, now there's talk of getting some of those components into future budget reconciliation. I know you're not the Senate parliamentarian, but how do you make that budgetary? What, what could that actually look like?
Adam Farah
Well, with the Save America act job, you have the policy language, but then there would also be funding pieces that would go along with that. And so, you know, I'm hopeful there's some smart attorneys over on the Senate side working for Senate Republicans that would put those pieces together. And that's oftentimes what happens is that there's maybe enforcement dollars that is assigned to a particular policy. Maybe the policy language isn't clear, but the the money would follow those particular actions if the states decided to do so. So I think there's a way to do, you know, at least the funding portion. If the parliamentarian didn't like the policy language, I think we could still get there. But you know, the Senate, again, you know, moving around the filibuster rule, could pass the Save America act as it stands by itself, as well as the DHS funding. So that's something that Senate leadership needs to realize that that's how they're going to have to get some of these things done.
Kelly Evans
Well, interesting. Speaking to us from his perch on the Financial Services and Budget committees in the House of Representatives, Congressman Marlon Stutzman, Republican from Indiana's 3rd we thank you for the insights. We'll assemble our panel for their take on all of this. Stay with us On Balance of Power. We'll have much more coming up after this.
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Joe Weisenthal
markets are in the green today and oil prices are lower.
Kelly Evans
Yeah, seeing oil prices drop seems to be kind of the underpinning here of seeing interest rates come back a little bit as well with news that Iran is allowing some, I guess, quote, unquote friendly vessels through, as they've been calling this. They actually have developed some sort of controlling mechanism to get an isolated number of ships through the Strait of Hormuz that does not include those with Western interests. But just seeing that movement in the global market seems to be making the energy market feel a bit better. When you combine that with a 15 point plan, realizing it's been rejected at first, Kelly, I guess they see some path to progress here and it's what we want to get into with our political panel. Joining us today, Bloomberg Politics contributor and Republican strategist Rick Davis. He's our partner at Stone Court Capital, and Democratic strategist Arshi Siddiqui Bellwether, Government Affairs. It's great to see you both. Rick, do you share the optimism of the markets here? There's a lot of noise right now and of course what Iran is saying publicly, as Adam Farrell remind us, is not likely. What is being said to the White House. What should we be focused on?
Rick Davis
Yeah, look, I mean, I think the number one thing is off ramp, right. This administration is clearly looking for an off ramp from the current status of the war. And, and that means that this could lead to a process and a process could lead to a cease fire or even a cessation of hostilities and that would all be good for the markets. I and even this move by Iran to show some willingness to take the pressure off of oil shipments out of the Gulf of Hormuz, probably mostly benefiting China. But the reality is it's a move in the right direction to loosen up the control, open up the strait and allow some traffic means a step in the right direction. And even though there's a lot of confusion out there about who's talking to who, the Pakistanis, the Egyptians, you know, Steve Witkoff, Jared Kirschner, which Iranian official are they talking to who's still alive today? I think it all portends a change in this war. I would say the wild card is whether or not we see the president and Bibi Netanyahu basically escalate to de escalate the president calling up ground troops into the region. That's an escalatory event. Bibi Netanyahu telling his military, we got two days, let's destroy everything we can get our hands on. That's escalatory. So right now you don't see a lull in the war fighting, but you clearly see a strategy developing amongst Israel
Joe Weisenthal
and the US well, on the notion of ground troops, Arshi, what would that optic optically the perception around this war, how would that change things ultimately if we suddenly are seeing images of paratroopers or literal boots on the ground on Iranian soil?
Arshi Siddiqui
The challenge for Democrats is that even though there was clearly no contingency planning, there was no consultation with our allies there, no consultation with Congress, is that they are also in the same boat in terms of wanting to maximize outcomes. And the stakes just keep on getting higher. I mean, as Rick was talking, I mean, this war has taken on a life of its own. So when you get to the billions of dollars being spent and now American lives at stake, I think this goes on, on hyperdrive. And the challenge is, is, is there a clear off ramp and any deal or negotiation that needs to be based on facts, not any sort of face saving exercise.
Kelly Evans
Rick, a lot of folks have wondered if the President would bring ground troops into theater if he didn't plan to use them. And the idea of seizing Carg island, for instance, as leverage to open the strait is something that he has apparently been considering and something he could do as soon as this weekend when that original batch of marines arrive from Japan. Is that what you see playing out here? The diplomacy backed by a show of military force?
Rick Davis
I think that's the key thing, Joe. It's, it's, it's, you're only credible in your threats to invade if you have an invasion force. And the President's threats about a bombing campaign in Iran were backed up by a mass massive armada and shift of weaponry, jets and other things into the region. So if he wanted to use them, they were there. And I'd say the same goes for the boots on the ground. I got to believe it's the last option. It's not a negotiating strategy. You put boots on the ground, you're going to have body bags coming back. President is highly sensitive to public reaction to this. It's, there's not a lot of public support for this war as it is now. You start seeing body bags come through Dover in, in a scale that we haven't seen, you're going to see a deterioration in that public support, what's left of it. So it is, it is something I think the President considers and I think as a negotiating tactic, you're only as good as the bargaining chips you have on the table. And right now if he wants to claim that he's going to go in and get, you know, Carg island or secure the the uranium, then he's got to have the troops to do it. And I think that's that that, if anything, is an important mobilization strategy.
Joe Weisenthal
It's a fair point. And obviously none of us want to see more American casualties. ARSHI if there is a diplomatic off ramp to avoid that. I also want to talk about the kind of cast of characters that is going to be pursuing it, because it is, yes, the envoys, Steve Witkoff and Jared Kushner, who seem to be involved in any kind of negotiation. We have also the Secretary of State Marco Rubio and Vice President J.D. vance, who we understand is one of the more skeptical voices around this, even though he is supporting what the president is pursuing here, historically, he has been very against the US Getting more involved in the Middle East. I wonder what you make of him having now potentially an outsized role in the way that this moves forward.
Arshi Siddiqui
Archie well, it's particularly interesting because he's been a bit MIA recently, right? I mean, we haven't seen a lot of him since this started. And the president also made some comments about who was his clear successor, which I think suddenly the vice president actually did reappear and reemerge. But it does, it does add, it does show the complexity of this debate within the Republican Party in terms of what this means. So I think we will see. But this is very fluid, as you well know, and it's not clear who's quite negotiating. And there's a lot of, there's a lot of different layers to this in terms of who will be out front and who will be. But ultimately it all goes back to Trump.
Kelly Evans
Well, if that's the case, President Trump has a lot more to be messaging here when it comes to the future of this conflict. RICK Caroline Levitt decided to add a news briefing that hasn't started, has it yet. James we're still waiting, waiting for the White House briefing to begin. How important is it for the White House to start taking questions from the media in parsing some of the words that the president has brought we've heard everything from this operation is winding down to we've already won it to there will be no cease fire in just the space of a couple of days?
Rick Davis
Yeah, it's a little bit head spinning, but it is standard Donald Trump confusion strategy. I don't think it's accidental. I think he throws out a lot of different issues, keeps the press chasing them, and at the same Time confuses his enemies in Tehran. So this is, this is a classic Trump move. I don't think anybody in the administration wants to get out there and have to reflect these things because any given minute he's going to reverse his own messaging around this. So kudos to Caroline Levin to being willing to go out and face the press. That being said, it's a pretty, it's a pretty tame press corps at this point in the sense that you can't get ahead of this news cycle. Things are happening so rapidly this week. You think about it, I mean, the massive bombing campaigns, the movement of troops, the negotiations in foreign countries, you know, with an unknown set of leaders in Iran. It's enough to keep your head spinning. And so the fact that the White House wants to start to frame some of this in the most positive fashion shouldn't surprise anybody.
Joe Weisenthal
Well, I guess to Rick's point, with all that noise out there, Arshi, I do wonder while we are looking at every single headline and tracking developments as they come for the American electorate, if they just are aware that a war is still ongoing at this point and their prices at the pump or higher. And that is basically the gist of it.
Arshi Siddiqui
No, I think that juxtaposition is very stark. And when you look at it, Iran has taken over the entire, entire news coverage and in daily lives, Americans are dealing. And I think that's why we've seen some of these things. Special elections go this way because you look at the economic challenges and this administration, their economic policies have made things worse, not better. Whether you look at tariffs, whether you look at now this war and gas prices, whether you look at the subsidies on the Affordable Care act, those not being the enhanced subsidies not being extended. So all of these things are working together to make things more challenging for American families, not better.
Joe Weisenthal
All right, Arshi Siddiqui and Rick Davis, our political panel today. Thank you so much.
Kelly Evans
Stay with us on Balance of Power. We'll have much more coming up after this.
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Kelly Evans
With the market clearly focused on geopolitics today and for the better, there does seem to be a string of optimism as we prepare to Spent some time with Christina Kino on that. I just want to mention a couple of headlines that have just crossed from the White House. Caroline Levitt just stepped up to the podium in the White House briefing room and we do have a meeting back on the calendar with President Xi. Trump will travel to China May 14th and 15th. According to Caroline Levitt and Kaylee, it looks like President Xi is going to be coming here. President Trump will be hosting xi in Washington D.C. at some point later on this year. We've got another redhead on the terminal.
Joe Weisenthal
Yeah, no specifics for that visit yet, but it is striking to see that this has now been scheduled, knowing the reason that it was delayed from the end of this month in the first place was because of the ongoing war in Iran. President Trump said he felt like he needed to be here as that was ongoing. That would signal a certain degree of optimism that the President that this will be wrapped up in time for this visit mid May.
Kelly Evans
You wonder if the market interprets it like this as well because there's already been a pretty positive vibe going on on the street and we are right near our highs of the session. Christine Aquino is watching all of this with us as Bloomberg's Managing Editor for Markets Live. If you check out our Markets Live blog, Christine is the force behind it and it looks like it's getting better all the time here. Christine, I'm just wondering what is in traders minds? Is it simply the fact that energy prices are lower or is there a real optimism that this war is about to end.
Podcast Announcer
Yeah, Joe. I mean, I think a lot of the headlines initially sounded positive and that's what markets were really trading off of heading into the US Session this morning. But of course, we did get a flurry of pushback from Iran, not necessarily indicating that they are open at this point to a cease fire. And so, yeah, what we're really seeing in markets is a lot of headline based trading. The underlying optimism for a cease fire is of course, still there. We have markets, prediction markets in particular, betting on something happening by the end of this month, potentially at the earliest. But in the absence of kind of clear terms, I think we are stuck in this sort of very much a headline driven sort of environment, even though at the moment, today, anyway, based on the green on the screen, that mood is optimistic, but we'll see how long that lasts.
Joe Weisenthal
So a headline driven environment. Christine, does that mean pay no mind to the fundamentals rentals? How are they looking?
Podcast Announcer
Yeah, well, Kelly, very interesting. I mean, we saw, of course, data earlier today, just a first look at those import prices and export prices for February before the bulk of the energy price increase. Right. And that is already indicating an inflationary sort of environment. So very interesting because, you know, we are seeing, of course, an oil shock at the moment, even though some of the energy prices, of course, are receding a little bit. But the underlying fundamentals actually also pointing to an inflationary environment. So we'll see whether that comes to pass and whether markets are in fact kind of waking up to this idea that beyond oil prices, there are very real underlying drivers of inflation at the moment.
Joe Weisenthal
All right, Christina Kino, managing editor of our Markets Live blog. Thank you for joining us from New York. Meantime here in Washington, the briefing is underway at the White House. The the White House press secretary Caroline Levitt speaking to reporters now specifically on negotiations with Iran, which she says have been in productive talks for the last three days, that Iran wants to talk and that President Trump is willing to listen, that he does not bluff and Iran should not miscalculate, as in her words, Trump will unleash hell if Iran does not accept defeat. We want to get into this now with Mona Yakubian, director and senior adviser of the Middle East Program at the center for Strategic, Strategic and International Studies. Mona, welcome back to Bloomberg TV and Radio. The White House press secretary also contended just moments ago that the Iranian regime is looking for an exit ramp. And I wonder if you see Iran right now as properly incentivized to deal with President Trump.
Mona Yakubian
I Don't think yet. I think Iran senses that it has quite a lot of leverage with its control over the Strait of Hormuz. And I think Iran is going to look to use that leverage and extract as much as it can, even though it has been subject to these very, very significant bombing campaigns. Nonetheless, I think Iran still believes that it is in a position in which it holds some important cards and it's going to want to play them.
Kelly Evans
Caroline Levitt saying just now that we are very close to so meeting the objectives of the Iran operation. Mona, there's been some confusion about what those objectives are. And if it's eliminating Iran's nuclear capacity, wouldn't that have to include the seizing of the highly enriched uranium that is still on the loose?
Mona Yakubian
Absolutely. There are several questions around Iran's nuclear capabilities and in particular the disposition of that highly enriched uranium. Now, there's some speculation that the latest deployments, the new deployments coming in a Marine Expeditionary Unit, as well as the 82nd Air Force Brigade, that they could be involved in some effort to take control of that uranium on the ground. But again, that is a highly risky proposition. Hard to know if that's actually what the administration is, is thinking.
Joe Weisenthal
Well, and so when we consider the deployment of more troops this time around, we keep recalling that several weeks ago, when there were, before these strikes were launched on February 28, there were talks underway between US and Iranian officials and mediators, even as the US was amassing massive military force in, in theater. Now we're seeing a buildup of troops again. And I wonder how you believe Iran is interpreting that, if that actually makes them less likely to be negotiating with the President, because there may have been an erosion of trust, given how this went the first time around.
Mona Yakubian
Absolutely. It's happened twice, actually. And Iran is very well aware of Night Hammer, too. Yeah, exactly. And so from Iran's perspective, like as they say, they've been tricked twice and they will not be tricked again. And they've actually noted this build up in their statements, saying, we are watching, we are seeing your movements, and we will defend our territory at any price. I don't think you can overestimate just how deep this distrust is between the United States and Iran, and Iran in particular, for example, reportedly refusing to engage with Steve Witkoff or Jared Kushner, and so instead seemingly having a preference for J.D. vance. Of course, we don't know if these details are correct, but what we do know is that there is deep, deep distrust that Iran has, and that is an obstacle to any sort of successful negotiation.
Kelly Evans
We know the troops are on the way, mona, Marines from two separate expeditionary units and members of the 82nd Airborne, who will be arriving starting as soon as this Friday. And over the next couple of weeks. We talked about what this means with Democratic Congressman Jake Auchincloss, a combat Marine Corps veteran of Massachusetts. He told us this on the late edition of Balance of Power yesterday.
Adam Farah
Listen, what the president is doing right now is he's calling 911, he's sending the 82nd Airborne, and he's sending two Marine Expeditionary Units to the Strait of Hormuz. And the reason he's dialing 911 so frantically is because thus far this war has been a strategic failure. We have sacrificed a significant strategic card to Iran, which is now they have sea denial. They have demonstrated to the world that they can selectively allow transit through the Strait of Hormuz through missiles and mines and drones.
Kelly Evans
Not to be confused with a tactical failure. Mona, if The President's calling 91 1, are these the forces that can reopen the strait?
Mona Yakubian
I'm not sure these are the forces that can reopen the strait. My understanding is these forces may be used to again, either attempt to take control of that highly enriched uranium, assuming we know where it is, possibly seize Harg island, which is, of course offshore, or undertake some operations along Iran's coastline. But I think the understanding is reopening the strait is a very, very complex endeavor. And that's why, as we recall, the president, in fact, was calling at one point on NATO allies to assist, precisely because this is not something that the United States could do on its own.
Joe Weisenthal
Well, and of course, while he's called on NATO allies, he actually has said that it's Gulf allies that have been more helpful so far. And I wonder, Mona, how you're thinking about the other Gulf states and what they would like to see here in terms of outcomes, as I'm sure you saw reporting in recent days that the Saudi Prince Mohammed bin Salman is actually pushing the president to continue these operations to make sure that the Iranian government is fully eradicated, essentially as it stands now. Can you just walk us through what the other Arab nations are likely to want to see here and push for?
Mona Yakubian
Well, Gulf countries, all because they, of course, they are Iran's direct neighbors. They've borne an enormous cost because of these strikes. They're all looking for an end state that will not allow Iran to again threaten the region. I think the question, though, comes as to how exactly that happens. And while it's maybe correct that they want to ensure that the United States, quote, unquote, finishes the job and they don't want to be left holding the bag. They're also, I think, quite wary of being drawn into, for example, offensive operations against Iran, which has at times been speculated in the press. They're in an extraordinarily difficult position,
Narrator/Host
very delicate.
Mona Yakubian
And I think at this point they're quite wary of, of how this could go down and in particular, as I said, most focused on how does this conflict end and what does Iran look like at the end of this conflict.
Kelly Evans
We're just hearing from Caroline Levitt again in the briefing room, Mona. She says about the prospect of Iran rejecting this peace proposal from the administration. They have not, she says they have continued referring to negotiations. They are productive, as the president said Monday, and they continue to be. She's in fact questioning, reporting now about this 15 point plan, cautioning reporters from reporting about speculative points or speculative plans. How should we read into that answer?
Mona Yakubian
Well, again, I think, you know, the history of negotiations between the United States and Iran is one that is very much often deliberated in back channels and so forth. That being said, you know, it is curious about the leaking of those 15 points. Did they just come out of thin air? Hard to, hard to believe that would be the case. I think what is clear is there is significant daylight right now between the United States and Iran with the US Looking for maybe a one month cease fire, Iran demanding a full cessation of hostilities and Iran demanding per its own press that they retain sovereignty over the Strait of Hormuz. And I think that's going to be an enormous sticking point, not to mention the long standing demands that the United States have had of Iran, whether it's its nuclear capabilities, its ballistic missile capabilities or its support for proxies. And here too, I think we can expect that Iran is going to push back on those demands. We've already seen indicators of that.
Kelly Evans
Hey, Mona, she's with the Middle East Program at the center for Strategic and International Studies. Mona Ekubian, thank you so much for the insights. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already, at Apple, Spotify or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime eastern@bloomberg.com
Narrator/Host
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Date: March 25, 2026
Hosts: Joe Weisenthal, Kelly Evans
This episode covers the rapidly evolving US-Iran conflict in its 26th day, examining both the military and diplomatic fronts. The discussion navigates White House claims of war “victory” amid ongoing exchanges, Iran’s resistance to a US-proposed peace plan, and the complicated prospects for a diplomatic off-ramp. The episode features insights from experts, lawmakers, and strategists, providing both market perspectives and in-depth political analysis at a time of heightened uncertainty.
The hosts and guests balance a clear-eyed, sober assessment of military and diplomatic churn with a market-savvy outlook, maintaining Bloomberg’s trademark analytical approach. Despite “victory” talk from the White House, all parties agree that the situation is volatile, negotiation channels are fraught, and the US public is feeling direct financial side effects. Uncertainty dominates, with talk of ground escalation weighed against fears of American casualties and eroding public support.
The episode ultimately paints a picture of high-stakes chess—with major moves still in play, deep distrust on all sides, and palpable political and economic anxiety resonating far beyond Washington.