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Vice President JD Vance is in Islamabad this morning for what may be the most consequential American diplomatic encounter with Iran since the 1979 Islamic revolution. He'll be flanked by Jared Kushner and special envoy Steve Witkoff, facing two seasoned Iranian diplomats: parliamentary speaker Mohammad Bagher Ghalibaf and foreign minister Abbas Araghchi, who published a book vowing Iran would never surrender its nuclear capacity. The talks arrive three days into a fragile cease-fire, with President Trump increasingly impatient and the Strait of Hormuz still largely closed. Only two ships cleared the strait on Friday, based on Tehran's geopolitical friends list and willingness to pay tolls that can reach $2 million. About 230 tankers remain bottled up in the Gulf, and some 20,000 sailors have spent what amounts to 41 days effectively held hostage at sea.
Iran enters these talks in a triumphant mood, state media hailing the country as a fourth global superpower. But the bravado papers over a battered military and industrial base. U.S. intelligence assessments tell a more complicated story than Defense Secretary Pete Hegseth's claim that Iran's missile program is "functionally destroyed": Iran still retains thousands of medium- and short-range ballistic missiles and could retrieve launchers from underground storage areas, though it cannot currently manufacture more. The question looming over Islamabad is whether Tehran will overplay the Hormuz card — insisting on maximalist demands while its leverage, though potent in the short term, may not last. Saudi Arabia and the U.A.E. can still export oil via pipelines that bypass the strait, and China, Iran's key partner, trades far more with the rich Gulf monarchies than with Tehran.
The strategic implications extend well beyond the Middle East. In just six weeks, the war has shattered a system of free navigation that has underpinned global trade for more than a century. Iran is collecting tolls in Chinese yuan or cryptocurrency, ranking ships by how friendly their nations are. Vessels are changing flags to countries friendlier to Tehran or taking on the identities of scrapped ships — "zombie ships" — in violation of international maritime law. The precedent worries American allies: if the world accepts a toll booth in open waters, how does it handle China's claim over the South China Sea, a passageway for more than one-fourth of global trade?
Back home, the economic pain is now showing up in the data. Consumer prices rose 3.3% in March from a year earlier, with energy costs up 12.5% and gasoline prices surging 18.9% — the first inflation reading to fully capture the war's impact on prices. The University of Michigan's consumer sentiment index fell to its lowest level on record. Average U.S. gas prices reached $4.17 a gallon Thursday, up from $2.98 the day before the conflict began, and analysts say prices will be slow to recede even if the strait reopens, because gas-station operators tend to lower prices gradually after a shock. JP Morgan analysts estimate the cumulative cost to Americans could reach $100 billion if recent gas-price hikes hold through year's end. For investors looking for shelter, Treasury inflation-protected securities are offering real yields at or above 2% on longer-term maturities — close to the most generous in two decades.
Vance's assignment carries acute personal risk. A self-described anti-interventionist who privately cautioned against striking the Houthis in Yemen and has expressed doubt about regime change in Iran, Vance is now inextricably linked to a war he didn't want. Old allies like Tucker Carlson and Megyn Kelly have turned into critics; Trump has lashed out at those MAGA skeptics, calling them "losers" and "stupid people." A close friend says Vance described sometimes feeling like he was walking on eggshells around Trump because of his antiwar views, though a Vance spokesman disputed that he had said that.
Meanwhile, in another corner of geopolitics, Hungarians vote Sunday in an election that could end Viktor Orban's two decades in power. A young challenger, Peter Magyar and his Tisza Party, has surged ahead in polls by nearly 15 percentage points. Orban's loss would reshape the EU, where his vetoes have stymied a 90 billion euro loan to Ukraine and a raft of sanctions against Russia. Trump on Friday pledged to use America's "full economic might" to help Hungary, and Vance visited Budapest earlier this week to support Orban's campaign — before heading to what is now the more urgent mission in Pakistan.
On a brighter trajectory — literally — NASA's Artemis II crew splashed down Friday evening off the coast of San Diego at 8:07 p.m. ET, completing a historic lunar flyby. The Orion capsule screamed through Earth's atmosphere at more than 24,000 miles an hour before parachutes slowed it to about 20. It was a near-flawless return — and a significant relief, given that the heat shield had charred unexpectedly during the uncrewed Artemis I mission in 2022, chipping off in more than 100 locations. NASA opted for a steeper re-entry angle this time to mitigate the risk. "We are back in the business of sending astronauts to the moon," NASA Administrator Jared Isaacman said from the deck of a Navy recovery ship. Among the mission's unlikely stars: a jar of Nutella that floated through the cabin on NASA's livestream, hurtling at exactly the right angle for its label to spin into focus. Ferrero executives found out about the cameo in a Microsoft Teams chat during an operations committee meeting. They called their response team "Nutella Mission Control."
In Washington, President Trump has repeatedly promised his top officials mass pardons before leaving office, telling aides in one meeting, "I'll pardon everyone who has come within 200 feet of the Oval." The frequent references — particularly when staff suggest they could face prosecution or congressional investigations — have led some aides to believe he is serious, even as others laugh it off. Trump aides have worried about losing the House to Democrats in November, and the president has discussed how to thwart potential inquiries. White House press secretary Karoline Leavitt responded: "The Wall Street Journal should learn to take a joke, however, the President's pardon power is absolute."
The financial world has its own anxieties. A.M. Best published a report finding that annuity insurers hold riskier debt than they did in 2007, with a slightly smaller financial cushion, raising questions about the industry's resilience in a downturn. Meanwhile, the turbulence in private credit — where funds have been swamped by redemption requests, forcing managers like Blue Owl Capital to lock up investors — is drawing attention to even squishier valuations in private equity, where funds can manufacture home-run performance on paper through subjective markups.
And in the cultural stream: the Justice Department has opened an investigation into the NFL over whether its proliferating broadcast deals amount to anticompetitive tactics that harm consumers. Nike's chief innovation officer is leaving after less than a year, the third to depart the role in under three years, as the sneaker giant's turnaround sputters. And at Augusta National, Rory McIlroy heads into the Masters weekend with a six-stroke lead at 12-under — the largest 36-hole advantage in Masters history — just as temperatures forecast to reach 87 degrees threaten to turn the greens into something approaching cruelty.
It is a Saturday defined by heat — atmospheric and geopolitical — with outcomes that may not become clear for days or weeks. By the time the sun sets in Islamabad, we may know whether Vance's talks have opened a path to something durable or merely extended the uncertainty. The rest — the inflation shock, the closed strait, the toll-booth precedent, the pardons, the markets — waits on the answer.
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