Macro & Markets Daily — Apr 21, 2026

Two clocks are ticking in the same room, and the market finally noticed. The U.S.-Iran ceasefire expires Wednesday, Jerome Powell's term expires May 15, and neither deadline has a clean exit. The S&P 500 closed down 0.63% on the session at 7,064.01, the Nasdaq closed down 0.59% on the session at 24,259.96, the Dow closed down 0.59% on the session at 49,149.38, and the Russell 2000 closed down 1.00% on the session — a tell that domestic-sensitive names were being quietly sold under the headline. The VIX jumped 3.3% on the session to 19.50, the 10-year Treasury yield climbed to 4.29% on the session after a hot retail sales print, and Brent crude settled down 2.03% on the session at $93.54 after a whippy session in which diplomatic hopes briefly outran the supply reality. Gold, the supposed fear trade, fell 1.54% on the session to $4,732.80 — amid rising real yields.

The 14-day truce between the U.S. and Iran runs out Wednesday, and today the market got exactly the headline it didn't want: Pakistani Information Minister Attaullah Tarar confirmed mid-session that Iran had not committed to attending the Islamabad negotiations. That statement flipped a morning rally into an afternoon slide. The U.S. vice president's planned trip to Pakistan was suspended after Tehran failed to respond to U.S. positions, according to Yahoo Finance's live coverage, and per Chinese financial outlet Wallstreet CN, about 800 vessels were reported waiting to transit the Strait of Hormuz as of April 21, 2026 while the International Maritime Organization drafts an emergency evacuation plan that only activates once the shooting stops. [Source: 华尔街见闻 — Chinese]

What changes if talks hold: WTI drifts back toward the $80s, equity breadth recovers, and the Fed gets room to breathe. What failure looks like: Citigroup's triple-digit-crude scenario becomes the base case, insurance premiums at Lloyd's of London spike, and the shipping gridlock becomes a self-fulfilling inflation engine through rerouting costs. The signal to watch is whether Tehran publicly names a delegation before Wednesday evening local time — silence is its own answer.

Kevin Warsh sat for his confirmation hearing before the Senate Committee on Banking, Housing, and Urban Affairs on April 21, 2026, and the performance was more consequential than the soundbites suggested. Asked by Sen. John Kennedy whether he'd be the president's "human sock puppet," Warsh answered "absolutely not" and added that Trump had never asked him to pre-commit on a rate decision. Markets opened higher. Then, partway through the hearing, traders caught a quieter line — Warsh said he intended to implement "a different, new inflation framework" if confirmed — and stocks slid into the red. Per CNBC's analysis, Warsh's broader "regime change" plan for the Fed emerged from the hearing intact, covering everything from how inflation is defined to whether post-meeting press conferences continue.

Here's the part almost no one is pricing: Sen. Thom Tillis has vowed to block the nomination until the Justice Department drops its criminal investigation into Powell over Fed headquarters renovation cost overruns, and Republicans hold a 12-10 edge on the committee. One defection stops a committee vote. Powell's term ends May 15; Polymarket put the odds of Warsh being confirmed by then at 34% as of April 21, 2026, and Kalshi put the odds at 30% as of April 21, 2026. The scenario the market hasn't priced is an acting Fed chair running monetary policy through a live energy shock. Watch for any White House move on the DOJ probe — that's the unlock.

March retail sales jumped 1.7% in March, more than double the 0.8% consensus — the strongest print in three years, and on the surface a victory lap for consumer resilience. Under the hood, it was an energy bill. Gas station receipts surged roughly 15.5% in March as the Strait closure pushed pump prices higher; strip fuel out and core retail sales grew a much more ordinary ~0.6% in March. The 10-year yield climbed 4.2 basis points on the session to 4.29% after the print, as traders priced out near-term rate cuts on the headline number and ignored the composition.

This is the dynamic that makes Warsh's "new inflation framework" more than an academic flex. Households are spending more dollars to consume the same amount of energy — nominal strength masking a real-income squeeze. If the Fed reads the headline and the market reads the headline, policy could tighten into a supply shock. The signal to watch is whether core retail softens in April as the energy pass-through stabilizes, or whether the squeeze starts showing up in discretionary categories.

Eight hundred ships idling in the Hormuz backlog, a Fed nominee promising "regime change" while insisting he's no puppet, and gold falling on a war — today was a masterclass in how markets can look almost sane while the narrative underneath quietly rearranges itself. Somewhere in Washington, one senator is holding the American monetary transition hostage over a renovation budget, and the White House is pretending not to have the key in its pocket.

Onward.

If you know someone trying to make sense of this week — forward it.