The Trump administration's sustained diplomatic engagement with Iranian officials through May 2026, including ongoing nuclear negotiations and ceasefire talks, has reinforced trader expectations against formal U.S. recognition of Reza Pahlavi. President Trump has publicly downplayed Pahlavi's prospects as a potential leader, stating in March that an internal Iranian successor would be more appropriate despite describing the exiled opposition figure as a "very nice person." Pahlavi's recent advocacy at CPAC in March and the Politico Security Summit in May, where he urged full U.S. support for regime change while criticizing mixed signals from Washington, has not prompted any State Department announcements, executive actions, or policy shifts favoring his recognition. With no official endorsements or diplomatic steps materialized by mid-2026, market pricing reflects the absence of conditions that would trigger such an outcome before year-end.