US–Iranian talks were thrown into doubt after President Donald Trump threatened to take control of the Strait of Hormuz and launch fresh strikes against Iran over Hezbollah’s actions in Lebanon. The Iranian delegation left the negotiation venue in protest against Trump’s threats, according to reports from Fars News Agency and Tasnim News Agency. However, Bloomberg reported that talks were still ongoing in Switzerland, citing people familiar with the matter who stated negotiators remained engaged.

Trump warned Iran on Sunday that the US might start collecting tolls if there is no deal, stating the country would seize control of the vital shipping route. "We may take over the strait, if we have to," Trump told Fox News. "If they don’t make a deal, we’ll collect tolls." In response, the Iranian delegation lodged a protest with the US delegation, and Press TV reported that Iran would weigh options for an appropriate response.

Vice President JD Vance and Iranian Foreign Minister Abbas Araghchi participated in the first high-level meetings of US, Iranian, Qatari and Pakistani representatives. Vance stated the goal of the ongoing diplomacy is to "transform the Middle East" and create "a future where everybody can work together to promote peace and prosperity for everyone." The two countries are negotiating a peace agreement that includes a permanent end to hostilities, the reopening of the Strait within 30 days, and a 60-day nuclear negotiating window extendable by mutual consent.

Negotiations began with a focus on the conflict in Lebanon, the opening of the Strait of Hormuz and Iran’s nuclear program, CNN reported, citing an unidentified diplomat. A resolution to the fighting in Lebanon will be decisive for the success of the US-Iran talks, Bloomberg reported, citing an official familiar with the discussions. Iran had delayed negotiations that were meant to begin because of the ongoing fighting, according to Press TV, which cited Iranian Foreign Ministry spokesman Esmaeil Baghaei.

Baghaei stated that Israeli attacks in southern Lebanon have violated the interim peace deal. Iran has insisted that an interim peace deal include an end to Israeli military action in Lebanon, which has reportedly killed thousands and displaced more than one million Lebanese. Under the terms of the agreement being discussed, the war on all fronts, including in Lebanon, should immediately end, Baghaei said.

US household financial anxiety has reached its highest point since 2022, with the Federal Reserve’s latest Survey of Consumer Expectations revealing a significant deterioration in consumer sentiment. The share of households reporting their financial situation is “much worse” than a year ago climbed to 13.3% in May, a peak not seen since July 2022. This shift reflects growing unease about personal finances despite stable inflation expectations, as consumers react to the cumulative effect of elevated prices and higher borrowing costs.

Survey of Consumer Expectations Data

The survey highlights a broad-based decline in financial confidence across various demographics. The data indicates a sharp rise in negative sentiment compared to previous years.

The gap between optimism and pessimism regarding future financial prospects is now the widest it has been since 2022. While inflation expectations have remained stable, the cumulative impact of several years of elevated prices and ongoing economic uncertainty appears to be driving the negative sentiment. Households feel they are falling behind even if inflation is no longer accelerating.

Behavioral Implications

Financial stress is influencing consumer behavior, leading to more conservative spending habits and delays in major purchases. These shifts are occurring despite strong employment numbers and recovered investment portfolios. Younger households face high housing costs, while retirees are sensitive to rising everyday expenses. In both cases, perception is influencing decision-making as much as financial reality.

The broader pattern across multiple studies shows elevated affordability concerns, declining financial literacy, and more retirees returning to the workforce. These trends suggest that many individuals may be carrying more financial stress than their balance sheets indicate.