Key insights
- Trump anticipates a deal with Iran but threatens further military action if an agreement isn't reached. He expressed surprise at the stock market's resilience during the conflict. Trump also stated his preference for Kevin Warsh to aggressively cut interest rates if appointed Fed Chair, raising concerns about Fed independence. Geopolitical tensions and potential Fed policy shifts create uncertainty for US equities.
Investing.com - President Donald Trump said Tuesday he anticipates reaching an agreement with Iran to conclude the ongoing conflict between the two nations, but flagged in a wide ranging interview with CNBC that he wants to be sure the threat from Iran is eradicated even if the war does not end quickly.
Speaking on CNBC’s "Squawk Box" program, Trump stated he believes the U.S. is "going to end up with a great deal" with Iran.
"I think they have no choice," Trump said during the interview, although he stressed that he would not be rushed to forge a permanent agreement by Congressional members calling for a swift resolution to a campaign which began in late February. .
The president outlined military actions taken against Iran, saying the U.S. has eliminated the country’s Navy, Air Force, and leadership. He threatened to resume carrying out strikes on Iran if a deal is not reached, saying the U.S. military is "raring to go."
Uncertainty surrounded the potential for more talks between the U.S. and Iran on Tuesday, with a two-week ceasefire due to expire later this week.
Trump said he was surprised by the resiliency of the stock market amid the Iran conflict and assumed the financial damage would be worse. The president said he anticipated the Dow Jones Industrial Average and S&P 500 would have fallen by 20%, the benchmark for a bear market, and oil would be as high as $200 a barrel.
Separately, Trump said he would be disappointed if Kevin Warsh, his nominee to become the next Chair of the Federal Reserve, does not advocate and push through aggressive interest rate reductions. Warsh is set to appear before a Senate confirmation hearing on Tuesday morning, with questions surrounding the Fed’s independence following months of a high-profile spat between Trump and current Fed Chair Jerome Powell.
Trump also told CNBC that it is possible a deal will be made to allow Anthropic’s artificial intelligence models to be used within the Department of Defense, saying the Claude creator is "shaping up" in the eyes of the White House.
He added that he will remember U.S. companies that do not seek refunds for the tariffs he imposed, which have been ruled illegal by the Supreme Court. He argued that tariffs would end up leading to "bigger numbers" for the U.S. interms of money, even though he acknowledged that the system would be "a little more unwieldy."
Elsewhere, Trump said that he would not like to see a merger between United Airlines and American Airlines, but would "love" for budget carrier Spirit Airlines to be purchased. Shares of American Airlines were lower in premarket U.S. trading following the comments.
(Scott Kanowsky contributed reporting)