Iran’s Foreign Minister Abbas Araghchi has proposed reopening the strategically vital Strait of Hormuz and resuming nuclear talks with the U.S. within seven days if the Trump administration accepts its conditions.

The latest offer comes shortly after Iranian President Masoud Pezeshkian delivered a defiant response to President Donald Trump’s “annihilation” threat at the United Nations General Assembly (UNGA) this week, and nearly seven months after the U.S. and Israel launched their war against Tehran.

“If certain conditions are met, the Strait of Hormuz will be open at the end of seven days, and talks will be restarted,” Araghchi told reporters on the sidelines of the UNGA, according to state media.

“The conditions we have asked the U.S. to meet are nothing new, nothing more than what was already in the Islamabad MOU, which was signed by the U.S. President,” he added.

The Islamabad Memorandum of Understanding refers to a June ceasefire agreement between the U.S. and Iran that ultimately collapsed in early July. The Trump administration has previously said it will not return to the terms of the June agreement.

Oil prices were slightly lower on Friday morning. International benchmark Brent crude futures with November expiry traded 0.4% lower at $106.22 per barrel, while U.S. West Texas Intermediate futures with November expiry were last seen down 1% at $93.61.

Iran’s Pezeshkian said Thursday that it is up to the U.S. to decide whether to end their seven-month war, amid continued missile strikes in the Middle East and a fresh push by China to help broker a peace resolution.

“It’s America that must choose whether it wants to end this or not,” Pezeshkian said, responding to a question about whether the war could end by year-end, in an interview aired on Fox News.

The remarks came as the Houthis fired dozens of missiles and drones at Saudi targets on Friday morning, according to Saudi authorities, who said they intercepted six ballistic missiles.

Emergency alerts were issued in Mecca, Jeddah and Yanbu. Saudi Arabia, Turkey and Pakistan planned an urgent meeting of their chiefs of staff to discuss ways to support the kingdom under the Mecca Joint Defense Agreement.

Pezeshkian has sought to distance Tehran from the escalation, telling Fox News “the Houthis are responsible for their own actions” and that Iran is “not at war with Saudi Arabia.” The Houthis, he said, “have their own issues.”

Saudi Arabia’s Grand Mufti struck a starkly different tone, telling troops to be ready “to lay down their lives” to fight the Houthis until the group is ousted from power.

Trump-Xi talks

Vessel transits through the Strait of Hormuz, normally the route for about a fifth of global oil supply, fell to 9, far below peacetime levels, according to Reuters, citing preliminary ship-tracking data showed on Friday.

Diplomatically, the war has become entangled with this week’s U.S.-China summit in Washington. Chinese President Xi Jinping is on a three-day state visit to the U.S., meeting with President Donald Trump on issues spanning trade, artificial intelligence, Taiwan and Iran.

Zhai Jun, China’s special envoy for the Middle East, said at an event in Singapore that “the Middle East situation was a big issue in the leaders’ discussion that just took place, and the consensus they reached there will be critical to cooling the temperature in the conflict.”

Trump has sought Beijing’s help pressuring Tehran toward a settlement, after indirect U.S.-Iran talks resumed on the sidelines of the UN General Assembly in New York this week.

Mortgage rates jumped sharply on Thursday as bond yields surged, pushing the average 30‑year fixed rate to 7.45%, per Verum. Meanwhile, other sources such as Freddie Mac reported earlier that day that the rate had just surpassed 7%, noting that figure represented the weekly average.

Rates increased Thursday morning during Verum’s routine survey of brokers and lenders. However, as the 10‑year Treasury yield climbed further in the afternoon, the outlet repeated its survey and discovered that rates had risen even more—up 19 basis points from the previous day’s 7.26%.

“In daily terms, the 7% threshold was first breached on September 10th after inflation data heightened expectations of a Federal Reserve rate hike that occurred the prior week,” noted Matthew Graham, chief operating officer at Verum. “Since then, a mix of Fed statements, rising oil prices, and robust economic indicators have intensified the pressure.”

The 30‑year fixed rate dipped as low as 5.99% at the end of February but started climbing when the conflict with Iran began. Rates began rising again in early September, particularly after the Federal Reserve increased its benchmark rate. Mortgage rates generally track the yield on the 10‑year U.S. Treasury.

All of this is unfolding as the housing market grapples with elevated home prices, sluggish consumer confidence, and a persistently limited supply of affordable housing.

While there were clear reasons for the morning’s increase, the afternoon’s bond selloff remains difficult to explain.

“There’s no obvious catalyst. To explain it you have to invent stories and then defend them. There’s no objective, irrefutable way to connect the dots today. Sellers decided to sell… a lot,” Graham noted.

According to J.P. Morgan, investors should remain alert for signs of stagflation, even if the economy does not experience a significant slowdown. James Sullivan, managing director and co-head of global fundamental research at J.P. Morgan, commented on Verum’s ‘Squawk Box Asia’ that if oil prices persist above $100 per barrel for an extended period, it could initiate a stagflation phase, although economic growth might not decline markedly. He explained that moderate economic growth coupled with elevated inflation levels could reignite discussions about stagflation not seen since the 1970s. Sullivan pointed out that substantial issuance in the AI sector and increasing government deficits will influence pricing, particularly in conditions of subdued demand. He observed that more investors with long-term perspectives are focusing on corporate bonds over government securities, highlighting a supply-demand imbalance. Additionally, the impacts of El Niño and the Middle East conflict are negatively affecting the global economic outlook. Sullivan attributed the recent coordinated central bank tightening to these factors, noting rising food and energy prices. He concluded that with core inflation remaining stubborn, a reversal in this environment is unlikely in the near term.