This week’s world-famous news haiku competition™ is about how the White House has warned staff not to profit by placing bets on prediction markets about the Iran War. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

And now, news!

Matt Davis — Need2Know Chedditor

News You Need2Know

What’s the stock market up to, eh?*

$SPX ( ▲ 0.8% )   $DJI ( ▼ 0.15% )   $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$BCS ( ▼ 0.04% )   $WFC ( ▼ 1.73% )   $CJ_F ( ▼ 2.25% )  

Investors see end of Iran war as a foregone conclusion

Wall Street has a funny way of dealing with global conflicts. While the rest of the world nervously refreshes the news, investors are apparently treating the end of the U.S.-Israeli war with Iran as a foregone conclusion.

Despite the crucial Strait of Hormuz remaining stubbornly throttled and the IMF warning about global inflation and a potential recession, the S&P 500 is gleefully approaching a fresh record high. Why let a geopolitical crisis ruin a perfectly good stock rally?

As Christine Lagarde, the president of the European Central Bank, politely noted, “What is a little strange is that there is a tendency by some to assume that it’s business as usual”.

A little strange, Christine? Mais, oui! C’est un peu étrange!

Hardika Singh, a strategist at Fundstrat, rationalized the exuberance, telling the New York Times that “this level of steadfast earnings growth is an incredibly positive sign given that the market has been hammered in the first quarter by the effective closure of the Strait of Hormuz”.

Barclays $BCS ( ▼ 0.04% ) equity analyst Stefano Pascale summed up Wall Street's current naive optimism: “The market is trading assuming we have seen the worst of the conflict. The obvious risk is that we have not seen the worst of the conflict.”

Give that man a raise.

Quote of the Day

Trump threatens to fire Powell (again)

President Donald Trump has once again threatened to fire Federal Reserve Chair Jerome Powell — whose term as chair officially ends on May 15 — despite the fact that Trump has no legal authority to do so.

Thanks to the fine print of federal law, he can actually stick around on the board as a Fed governor until 2028. Naturally, Trump isn't thrilled about this, especially since Powell hasn't bowed to his relentless demands for substantially lower interest rates.

Trump also launched a Justice Department investigation into the Fed's $2.5 billion headquarters renovation. Trump claims the probe is about Powell's "incompetence," while Powell says it's just a flimsy pretext to bully the central bank.

Enter Trump ally and U.S. attorney Jeanine Pirro, who recently led a rogue, unannounced tour of the construction site. Defending the stunt, Pirro said: “Any construction project that has cost overruns of almost 80% over the original construction budget deserves some serious review. And these people are in charge of monetary policy in the United States?”.

The courts, however, aren't buying the drama. A federal judge completely swatted down the DOJ's subpoenas, noting hilariously that “the government has offered no evidence whatsoever that Powell committed any crime other than displeasing the president.”

Unfazed, Powell is digging his heels in, declaring he has “no intention of leaving the board until the investigation is well and truly over, with transparency and finality” and will do what is “best for the institution and for the people we serve.” 

Trump’s nuanced diplomatic response? “I’ll have to fire him.” 

New York governor wants to tax second homes

Got a spare $5 million apartment in Manhattan that you only visit for the holidays?

Have you considered giving it to me? Because New York Governor Kathy Hochul has a message for you: time to pay up.

Faced with a $12 billion budget deficit over the next two years, New York is finally looking to fill the gap by taxing the ultimate luxury item: The vacant pied-à-terre. Hochul's new proposal specifically targets wealthy non-residents whose multi-million-dollar vacation pads sit empty most of the year.

As Hochul politely reminded the absent elite, “New York City is the greatest city in the world, and the people who call it home should not be left carrying the burden alone”. She added, “If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”

Mayor Zohran Mamdani is thrilled with the pivot. “Thanks to the support of Governor Hochul, we are one step closer to balancing our budget by taxing the ultra-wealthy and global elites,” he said.

Naturally, the real estate industry is having a meltdown over the estimated 102,900 units that sit largely vacant. Jim Whelan, president of the Real Estate Board of New York, claimed the tax “will weaken the city’s broader economy” and “eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers”.

I would love to see lower property values for empty $5 million homes, personally.

Song of the Day: Ella Langley, ‘Bottom of Your Boots.’

Here’s a catchy song blending Alabama twang and modern country production.

Hotels slash summer room rates as World Cup demand falls short

Remember when FIFA promised the 2026 World Cup would bring an unstoppable tidal wave of tourists to the U.S.? Yeah, about that.

Back in 2024, FIFA head Gianni Infantino assured host cities they would see “hundreds of thousands” of fans, including “many, many more who will just come to…be part of something special.” 

It turns out that “something special” apparently involves a lot of empty hotel beds. The hospitality industry is facing a harsh reality check, with match-day room rates in major host cities dropping by a third from their peak. As Scott Yesner, founder of Bespoke Stay, bluntly told the Financial Times, “I’m seeing a lot of people start to panic and lower their rates.”

Why isn't the world flocking to America?

Well. I can think of a few reasons. Turns out, astronomical $6,900 ticket costs and a, let’s say, turbulent geopolitical landscape, are massive buzzkills. Lior Sekler of HRI Hospitality summed it up: “Obviously, people’s desire to come to the United States right now is down,” he told the Financial Times.

Vijay Dandapani of the Hotel Association of New York City admitted the event “certainly will not be the cornucopia that FIFA was promising.”