US-Iran Nuclear Deal Near as Debt Hits 100% of GDP

At the centre of the day was a US-Iran agreement that two US officials and a Pakistani mediator told Axios and Reuters was "very close." The one-page, 14-point memorandum being negotiated by Trump envoys Steve Witkoff and Jared Kushner would declare an end to the war, open a 30-day window of detailed talks in Islamabad or Geneva on Iran's nuclear programme, sanctions and the Strait of Hormuz, and contain a uranium enrichment moratorium of at least 12 years — Iran initially proposed five and Washington 20. President Trump suspended Project Freedom escort operations in Hormuz "for a short time" to give negotiators room, citing "great progress." Secretary of State Marco Rubio said the deal "need not be written in a day," called some of Iran's top leaders "insane in the brain" and said it was unclear whether they would close. White House officials cautioned that the Iranian leadership appeared divided.

Treasury figures pushed the US national debt past 100 percent of GDP for the first time since 1946: $31.265 trillion as of March 31, or 100.2 percent of GDP. Net interest payments on the debt overtook defense spending for the first time in 2024 and, according to Congressional Budget Office projections, will nearly double the defense line by 2036. The milestone divided economists between those warning of shrinking fiscal room for the next downturn and those who argue the dollar's reserve-currency status absorbs the cost.

Aviation continued to take the war's hit. Global airlines have cut 9.3 million seats for June through September, according to Cirium, as jet fuel prices have risen more than 80 percent since the US and Israel launched their war on Iran in late February. Spirit Airlines ceased operations permanently on Saturday, a closure widely blamed on those costs. International Air Transport Association director general Willie Walsh warned that parts of Europe and Asia could see jet-fuel shortages in the coming weeks.

The State Department on May 1 approved an emergency foreign military sale of 10,000 Advanced Precision Kill Weapon System rounds to Israel valued at $992.4 million, invoking the emergency waiver under the Arms Export Control Act to bypass the standard 30-day congressional review; BAE Systems of Nashua, New Hampshire, is the prime contractor.

Tehran's posture across the day cut against the optimistic memo framing. Iranian President Masoud Pezeshkian rejected concessions, said "no one can make us surrender" and urged the US to remove its forces from the Middle East; the Islamic Revolutionary Guard Corps unveiled a new Hormuz security plan aimed at preventing weapons from reaching US bases. An analysis circulated by Matthew Levitt observed that two months into the war no Iranian-linked terrorist plots had surfaced inside the US homeland despite IRGC threats — possibly because of fear of escalation, or because Israeli airstrikes have degraded Iran's external operations commanders — even as Iranian "terror-for-hire" attacks have hit Europe.

Trump-backed candidates won five of seven contested Indiana Senate primaries, extending the president's grip on Republican selections. US forces killed three alleged drug smugglers in the Pacific and two in the Caribbean under Trump's expanded anti-drug operations. A federal grand jury added a charge of assaulting a federal officer with a deadly weapon to the indictment of Cole Tomas Allen over the attack at the White House Correspondents' Dinner. Rubio denied a US oil blockade of Cuba; Havana accused him of lying.

Disney reported a drop in visitors to its US theme parks, blaming reduced travel during the wars. Separately, the US ambassador to Belgium and Israel's foreign minister publicly condemned Belgian judicial proceedings against two mohalim accused of performing ritual circumcisions in violation of medical licensing laws; Belgium's foreign minister called the criticism inappropriate interference.