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Friday morning, and the ceasefire is two weeks old — or rather, the two-week ceasefire is at its end. Talks opened today in Islamabad, and the question the entire structure was built to defer has arrived: does this become something, or does everything restart?
The administration spent Thursday insisting it holds the upper hand. Karoline Leavitt called the five-week air campaign a "military triumph." Pete Hegseth said every objective was achieved "on plan, on schedule." Several senior aides don't share that confidence. More than half of Iran's missile launchers have been destroyed, but a substantial number remain buried deep underground. The IRGC retains dozens of small boats capable of threatening ships in the strait. Iran's navy is largely sunk, but the navy was never the point — asymmetric capability was, and enough of it survives to keep the strait functionally closed. "Iran has certainly been defanged," one analyst at the Foundation for Defense of Democracies said. "But there's a smaller group of things that have been fully destroyed." The distance between "military triumph" and that sentence is where the negotiation lives.
Iran, meanwhile, is treating the ceasefire as vindication. The regime survived. Its primary strategic gain — control of the strait — remains intact. Its foreign minister is promising "safe passage" only "in coordination" with Iranian armed forces. Ships at anchor are still being told they need Tehran's permission to transit. The toll operation continues, with fees running $1 million or more per vessel. James Mackintosh, in a mordantly funny exercise, drafted a mock IPO prospectus for the "Tehran Toll Booth," estimating that at $2 million per ship and 36,000 annual large-vessel transits, the addressable revenue could approach $72 billion a year. The joke lands because the underlying math is real.
The Gulf states are watching all of this with something beyond anxiety. In Dubai, Doha, and Kuwait, the fear is not that the ceasefire will collapse but that it will hold — on Iran's terms. "We woke up to a deal that doesn't reduce the risk, but instead replaces it with a bigger risk," said the director-general of a Dubai think tank. The speed of Trump's reversal — from civilizational threats to accepting Iran's ten-point list as a negotiating basis — has left America's regional partners recalculating what Washington's commitments are actually worth. That recalculation now extends to NATO. The White House is exploring plans to punish alliance members deemed unhelpful during the war by repositioning U.S. troops away from their countries — Spain, Germany, and Italy are all in the crosshairs. Trump wrote on Truth Social Wednesday that "NATO wasn't there when we needed them, and they won't be there if we need them again." NATO Secretary-General Rutte traveled to Washington to try to keep the relationship from fraying further.
Back home, the ceasefire has not translated into relief at the pump. Average U.S. gasoline hit $4.17 a gallon Thursday, up from $2.98 the day before the conflict began. Spot crude cargoes — the physical oil refiners actually buy — were bid as high as $145 a barrel Wednesday, even as futures settled near $98. That gap explains why the futures selloff on ceasefire day didn't reach consumers: refiners pay spot prices, and spot prices reflect a strait that remains closed. Analysts say pump prices could fall a few cents a day if tanker traffic resumes in earnest, but gas stations that absorbed wholesale spikes tend to lower retail prices more slowly, expanding margins on the way down. California diesel hit $7.75. Delta, alone among major airlines, has a partial hedge: the Pennsylvania refinery it bought in 2012 for $150 million, an investment that energy experts mocked at the time, is now expected to boost second-quarter earnings by $300 million.
The private-credit story that's been building for weeks found its clearest distillation yet. A.M. Best plans to publish a report Friday showing that annuity portfolios at insurers now hold riskier debt than they did in 2007, with a slightly thinner financial cushion. "The chance of not being able to pay your claims is just higher," said a senior director at the ratings firm. The trillion dollars in private credit sitting on insurer balance sheets — the same exposure that drew Treasury's attention last week — is not an abstraction. It backs annuities held by roughly 10% of older Americans. BlackRock, meanwhile, is outperforming its private-market-focused peers precisely because most of its revenue still comes from boring public funds. The stocks of Blackstone, KKR, Apollo, Ares, and Blue Owl have fallen an average of 31% this year. BlackRock is down 6.4%. The lesson is the oldest one in finance: diversification protects you from the thing you didn't see coming, which is always the thing that arrives.
A few things from the texture of the week: U.S. fertility rates hit a new record low in 2025 — 1.57 births per woman, well below replacement. For the first time, birthrates among women in their late 30s exceeded those for women in their early 20s. Disney is preparing to cut roughly 1,000 jobs under new CEO Josh D'Amaro, mostly in marketing. The Justice Department has opened an investigation into the NFL over whether its increasingly fragmented broadcast deals constitute anticompetitive behavior. Britain's military exposed a monthlong Russian submarine operation targeting undersea cables and pipelines in the North Atlantic — three submarines, one used as a decoy while the other two lurked over critical infrastructure. Moscow, the defense secretary said, was trying to exploit the Middle East turmoil to catch the U.K. off guard. And small private colleges are dying at a rate that's reshaping American higher education: 442 of the nation's 1,700 private nonprofits are at significant risk of closing or merging in the next decade. At St. Michael's College in Vermont, enrollment is down 45% in ten years, tenured biology professors are doubling as groundskeepers, and dorms that once overflowed with students now house Afghan refugee families.
The Artemis II crew, meanwhile, faces [re-entry tonight
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