New developments have emerged regarding the situation in Iran. According to a report from CCTV News, a spokesperson for the Iranian armed forces stated on the 27th local time that Iran is currently formulating the conditions for ending the war. The spokesperson warned the United States and Israel that Iran possesses significant strength and a superior position on the battlefield, enabling it to dictate the final outcome of the conflict, a reality that the US and Israel will be "compelled" to accept.
Separately, informed officials from the United States and Saudi Arabia disclosed that an Iranian attack on the Prince Sultan Air Base in Saudi Arabia, which hosts US troops, on the 27th resulted in injuries to 10 US military personnel and damage to several US aerial refueling aircraft.
US media reported on the 27th local time that the USS George H.W. Bush aircraft carrier is expected to be deployed to the Middle East or nearby regions. On the same day, US Secretary of State Marco Rubio indicated that US and Israeli military operations against Iran are expected to continue for several more weeks.
German Chancellor Friedrich Merz stated on the 27th local time that the current US actions are not aimed at de-escalating the situation or seeking a peaceful resolution, but rather represent a significant escalation of the conflict, the consequences of which are unpredictable.
Notably, on Friday, the US bond market also experienced selling pressure, indicating investor expectations that the Federal Reserve may adopt a more hawkish stance on interest rates. Bettors on the Polymarket platform assign a 25% probability to an interest rate hike by the Fed later this year and a 40% chance of no rate cuts occurring in 2026.
The Iranian armed forces spokesperson reiterated on the 27th that Iran is establishing the terms for war termination. The spokesperson warned that the US and Israel have fully recognized the strength of Iran's armed forces and its people in practical struggles, advising them to face reality and return to rationality promptly.
According to the CCTV News report, based on revelations from US officials on March 27 local time, Iran launched missiles at the Prince Sultan Air Base in Saudi Arabia, causing injuries to multiple US military personnel. Two US officials confirmed the attack resulted in several injuries, though all are currently in non-life-threatening condition. Additionally, at least one US aircraft was damaged. This attack is cited as one of Iran's latest responses to military actions by the US and its allies. With the ongoing escalation, US personnel and facilities in the Middle East face heightened risks. To date, at least 303 US military personnel have been injured in operations against Iran, with 10 in serious condition.
On the 27th local time, Amir Ali Hajizadeh, commander of the Aerospace Force of the Islamic Revolutionary Guard Corps, stated that attacks by US and Israeli forces on multiple Iranian infrastructure sites that day constituted "provocative and fire-playing actions." Hajizadeh indicated that Iran's response "will no longer be limited to tit-for-tat measures," though specific details were not disclosed. He simultaneously warned that employees of industrial enterprises in the region associated with the US and Israel should immediately vacate their workplaces to avoid endangering their lives in subsequent operations.
Later on the 27th local time, Iranian Foreign Minister Hossein Amir-Abdollahian responded on social media to Israeli attacks on Iranian infrastructure, including power plants and steel factories, emphasizing that Israel will "pay a heavy price for its crimes." Abdollahian pointed out that Israel targeted two of Iran's largest steel plants, a power plant, and civilian nuclear facilities, actions which he stated were coordinated with the US according to Israeli claims. He noted that these attacks contradict US President Donald Trump's earlier statement about "pausing strikes on Iranian energy facilities" and reaffirmed Iran's firm stance on safeguarding its national security and interests.
According to a Xinhua News Agency report, US Secretary of State Marco Rubio, speaking after a G7 foreign ministers' meeting in France on the 27th, stated that US and Israeli military operations against Iran would continue for several more weeks, adding that the US currently has no meetings scheduled regarding the Russia-Ukraine conflict. Rubio told media before departing that the military operation against Iran is expected to conclude in due time, specifying "we are talking about weeks, not months." A report from Axios, shared by a reporter on social media, indicated Rubio told G7 counterparts the conflict would last "2 to 4 weeks."
Rubio claimed the US could achieve its military objectives against Iran, including destroying its missile and drone capabilities, without deploying ground forces. He also mentioned the recent deployment of thousands of additional US troops to the Middle East was intended to provide President Trump with options for contingencies, without elaborating further.
A CNN report on the 27th stated the USS George H.W. Bush aircraft carrier is anticipated to deploy to the Middle East or adjacent areas. The report, citing sources, said the carrier would head to the US Central Command area of responsibility, which includes the Middle East. It remains unclear if the USS Bush will join or replace naval forces already participating in operations against Iran in the region. The report added that despite President Trump's claims of engaging in negotiations with Iran, he has also been considering various military options that could lead to escalated conflict.
German Chancellor Friedrich Merz, in a speech on the 27th local time, stated that current US actions constitute a large-scale escalation of the conflict rather than efforts to ease tensions or seek peace, with unpredictable outcomes. Merz said these escalations pose a threat not only to those directly affected but to everyone, including German citizens. He also questioned US and Israeli war aims in Iran, expressing doubt that their alleged objective of regime change is achievable. Merz asked, "Is regime change really their goal?" and added, "If so, I don't believe they can achieve it. Such endeavors usually end in failure." Merz also stated Germany's willingness to deploy armed forces for mine-clearing operations in the Strait of Hormuz after the war concludes.
Data from CME Group shows investors currently assign approximately a 20% probability to a Federal Reserve rate hike before the September meeting and see zero chance of a rate cut within the next six months. A month prior, market expectations for at least one rate cut by September exceeded 90%. Bettors on Polymarket see a 25% chance of a Fed rate hike later this year and a 40% probability of no rate cuts in 2026.
On Friday, ongoing attacks in the Middle East heightened concerns that the Iran conflict could persist into April or longer, pushing oil prices higher. Brent crude futures traded above $106 per barrel, while West Texas Intermediate crude futures surpassed $100, gaining over 7%. Investors are closely monitoring the growing economic impact of shipping disruptions in the Strait of Hormuz.
That day, not only did US stock markets decline, but the bond market also saw selling, signaling investor anticipation of a more hawkish Fed stance on interest rates due to worries that surging oil prices could fuel inflation. According to Yahoo Finance, President Trump's postponement of strikes on Iranian energy facilities failed to alleviate investor anxiety. The yield on the 10-year US Treasury note, which moves inversely to price, jumped to 4.46%, reaching its highest level since July.
Mike Dixon, Head of Research and Quantitative Strategy at Horizon, noted, "After months of expecting Fed rate cuts this year, investors have returned to the old adage: 'higher for longer'." The two-year US Treasury yield climbing to 4% on Friday also signaled a similar outlook. Aditya Bhave, US Economist at Bank of America, pointed out a divergence between this yield and oil price movements. Bhave stated that Fed Chair Jerome Powell's comments following the Fed meeting earlier this month were hawkish, and Fed Governor Christopher Waller appeared "very concerned about the oil price spike" in a March 20 interview. Bhave wrote that given the post-meeting divergence between short-term rates and oil prices, "we believe the market is now anticipating a more hawkish reaction function from the Fed and potentially pricing in a broader commodity shock."
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