Brent Crude Down 20% from 2026 Highs to ~$91–92 on Iran MOU Progress; June FOMC Hold ~99% Priced; US Tariff Uncertainty Remains — Section 122 Cliff 54 Days

As of May 29, 2026, crude oil has declined approximately **20% from its 2026 intraday high** of ~$115 reached during the most acute phase of the Iran-Hormuz crisis in early May — with Brent settling in the $91–92/bbl range as Iran MOU negotiations continue, despite the deal not yet being formally signed by President Trump or Supreme Leader Khamenei. **Oil Market — Down 20% from 2026 Peak:** - **Brent crude May 29 range**: approximately $91.00–92.50/bbl - From the 2026 high of ~$115/bbl (early May IRGC seizures peak) to the current ~$91–92 level = a **~20% decline** as reported by CNBC (May 29) - The decline is faster than IEA projected even in a 'signed deal' scenario, suggesting markets are pricing a deal as a done deal - However, the 60-day MOU framework has NOT been signed — Iran parliament hardliners remain the key domestic obstacle; the uranium enrichment stockpile disposition remains unresolved - **WTI crude**: approximately $86–88/bbl range - Goldman Sachs oil desk: if MOU signed within 5 days, Brent targets $88/bbl within 2 weeks; structural IEA supply deficit means Brent floor is approximately $80–82 even with full Hormuz reopening **US Policy Calendar — The Critical Three Weeks:** - **June 5 (7 days)**: BLS May Employment Situation (jobs report) — the last major labor market data before the June 16-17 FOMC - **June 16-17 (18 days)**: Warsh's first FOMC meeting (new Summary of Economic Projections + dot plot + press conference); BOJ June 16 meeting (65–77% hike probability to 1.00%) — the simultaneous hawkish policy signal tail risk remains the highest-stakes single-day event in global markets - **July 23 (54 days)**: Section 122 tariff cliff — Congressional action required or Bessent/Greer pivot to Section 301; bipartisan deal remains elusive **PCE April Aftermath — The 'Less Bad Than Feared' Narrative:** The May 28 PCE release (3.3% core / 3.8% headline YoY; but MoM core +0.2% softer than the +0.3% feared) produced an interesting market dynamic: - The softer monthly prints allowed traders to reduce rate-hike bets; 2Y Treasury fell to ~3.99–4.00% - June FOMC hold probability is approximately **99%** (CME FedWatch) - The rate hike scenario — which had been priced at ~30% by year-end 2026 — is fading if the Iran MOU closes and oil continues declining - Warsh's preference for trimmed-mean PCE gauges means the 'supercore' deceleration (+0.1% vs prior +0.3%) is the data point his team will emphasize **The Updated Macro Scorecard (May 29):** - Inflation: CPI 3.8%, PPI 6.0%, PCE headline 3.8%, PCE core 3.3% — all above target but oil relief path credible - Growth: Q1 GDP revised to +1.6%; Q2 GDPNow flash trajectory ~0.8–1.0% (near stall speed) - Labor: April payrolls +115K; unemployment 4.3%; May jobs report June 5 - Sentiment: Michigan 44.8 (record low); CB Expectations Index 74.4 (16th month below recession threshold) - Oil: Brent ~$92 (down 20% from high); deal unsigned - Tariffs: Section 122 cliff 54 days; Section 301 investigations (16 countries) ongoing - Yields: 10Y ~4.47%; 30Y ~5.00–5.10%; 30Y mortgage ~7.3–7.4% - Recession probabilities: Goldman ~30%, JPMorgan ~35%, Moody's Analytics ~49% (all pre-PCE figures; updates expected) **Recession Scenario Update — May 29:** - If Iran MOU signed by June 5 + May jobs report confirms labor market stability + PCE softens in May: Goldman recession probability could fall toward 20% - If MOU collapses + Section 122 expires without Congressional action + June 16 BOJ + Warsh hawkish: recession probability surpasses 60% - The S&P 500 continuing to set records (ATH ~7,557 on May 28) reflects the market's current assessment that the soft landing base case (Goldman 70% no-recession) remains intact, even as consumer sentiment hits 70-year lows