Risk trades are diving on a report from N12 about Ghalibaf leaving the negotiating team. N12 is the digital news brand of Keshet 12, an Israeli free-to-air television channel
If anyone in the market was still holding out hope for a diplomatic off-ramp in the Middle East, it might be time to worry.
We just got a pair of headlines out of Iran that paint a very stark picture of where things are heading, and it’s not toward de-escalation.
First, Iranian President Pezeshkian took to X to completely torpedo the idea that there are any reformist voices left in the room. Remember, Pezeshkian was billed as the “moderate” when he took office. Today? He’s explicitly saying there are no moderates or radicals left—just “complete obedience to the Supreme Leader.”
He was thought to be a pragmatist but that doesn’t seem to be the thinking now. He wrote:
In Iran, there are no radicals or moderates;
we are all “Iranian” and “revolutionary,” and with the iron unity of the nation and government, with complete obedience to the Supreme Leader of the Revolution, we will make the aggressor criminal regret his actions.
One God, one nation, one leader, and one path; that path being the path to the victory of our dear Iran, more precious than life.
The real kicker is the second headline.
Parliament Speaker Ghalibaf is reportedly resigning from the negotiating team after the Islamic Revolutionary Guard Corps (IRGC) intervened.
Now, I’d wait for confirmation from Iran or US media before diving full into this headline but taken together these two reports indicate:
-
The pragmatists have left the building. Ghalibaf is a conservative, but he’s a pragmatic one who understands the domestic economic toll of endless conflict. If he’s getting pushed out of negotiations by the IRGC, it means the hardliners and the military wing are now driving the bus.
-
You don’t hand the keys to the Revolutionary Guards if you’re looking to cut a deal. You do it when you are bracing for impact and consolidating power.
-
They are closing ranks, demanding absolute ideological unity, and sidelining politicians in favor of generals. That means war is more likely.
Expect crude to catch a bid on this as the market digests the reality that the IRGC is now fully dictating terms. The S&P 500 is quickly down 0.7%. Yesterday I wrote: The foundations of this stock market rally are iffy.
