Fed's Jefferson Says Monetary Policy Is Well Positioned to Respond, Not Prejudge June Meet
Federal Reserve Vice Chair Philip Jefferson told a Tokyo conference that the current federal funds rate range of 3.50%‑3.75% leaves policy well positioned to respond to incoming data. He stopped short of signaling any direction for the June 16‑17 FOMC meeting, keeping options open. Jefferson highlighted upside inflation risks, particularly from oil‑related energy shocks, while expecting tariff‑driven price pressures to fade later in the year. He also noted solid recent activity but warned of downside risks to employment.
Global Trade Linkages and the Cross-Country Distribution of the Gains From AI
A new OECD‑backed study models how artificial‑intelligence (AI) adoption reshapes global welfare through trade. It finds AI use in core business functions averages 4 % across OECD economies, with a ten‑year horizon ranging from 0.2 % in Mexico to 7 % in Ireland....
US Stocks: BoA Warns of Summer Stock Rout as Cash Levels Fall and Bullish Sentiment Peaks
Bank of America’s May Fund Manager Survey shows cash holdings among 170 managers dropped to 3.9%, crossing the historic 4% sell‑signal threshold. Investor sentiment hit a three‑month high on robust earnings, while only 16% anticipate a Fed rate hike despite...
Losing Patience: Markets Reprice Inflation Risk
U.S. Treasury yields have climbed to their highest levels since the war began as inflation data accelerate and the Strait of Hormuz remains closed. Import prices surged at the fastest monthly pace in four years, adding upward pressure on costs....
Bond Yields Are Spiking Higher. Should Stock Investors Worry?
Bond yields have surged, with the 30‑year Treasury hitting a 19‑year high and the 10‑year climbing from 4.03% to 4.69% before easing to around 4.5%. Research from Goldman Sachs shows that sudden half‑percentage‑point spikes in yields tend to push short‑term...
Fed's Cook 'Prepared to Raise Rates' If Inflation Persists
Federal Reserve Governor Lisa Cook warned that the Fed is prepared to raise interest rates if inflation does not ease, citing five years of above‑target price growth and the inflationary impact of the Iran‑related oil price surge. Her remarks underscore...
Recession with Chinese Characteristics
The latest Chinese statistics reveal that the country’s purely domestic economy has been shrinking for at least two years, even as its goods‑export surplus hovered around $1 trillion annually. In 2024 the nominal GDP increment was about $770 billion, while the trade...
Prolonged Strait of Hormuz Closure Could Upend Global Economies, Energy Sector Survey Says
Wood Mackenzie’s May 20 report flags a prolonged Strait of Hormuz shutdown as the greatest single risk to global energy markets, cutting roughly 11 million barrels per day of oil and 20% of LNG supply. The firm outlines three scenarios—from a quick...
Copper’s Giant Tariff Trade Is Back and Squeezing Global Market
Traders are reviving the US‑focused copper tariff trade as the spread between NY Comex and the London Metal Exchange widens, prompting shipments of up to 200,000 tons a month. Front‑month Comex contracts sit more than $500 per ton above LME cash prices,...
US Trade Negotiators to Visit India From June 1-4 for Interim Trade Deal Talks
U.S. trade negotiators led by USTR Jamieson Greer will travel to New Delhi from June 1‑4 to seal an interim trade agreement that builds on the February framework for a broader bilateral trade pact. The talks aim to lock in preferential...
Global Supply Shortages Deepen as War Drags On, Risking Jobs and Growth
Three months after the Strait of Hormuz was sealed off, the resulting disruption is now evident across global markets. The chokepoint previously handled about 25% of seaborne crude oil and 20% of LNG, and its loss has triggered physical shortages,...
China’s Return to the Energy Market Could Become the Next Global Price Shock
China’s sharp cut in oil and LNG imports has acted as a temporary stabiliser for global energy markets, but analysts warn the pause cannot be sustained. Crude imports fell to about 6.6 million bpd in May, the lowest level since 2016, while...
Fed Official Says Global Energy Demand May Need to Fall if Hormuz Stays Shut
Dallas Fed President Lorie Logan warned that a prolonged closure of the Strait of Hormuz could force the world to curtail oil and gas consumption. The strait, which carries about 20% of global oil and LNG shipments, has been throttled...
Treasuries Rise as Oil Prices Drop on Signs of US-Iran Accord
U.S. Treasury yields fell across the curve as oil prices dropped following reports of a draft U.S.-Iran memorandum that could reopen commercial shipping through the Strait of Hormuz. The 30‑year yield, which had stayed above 5% since mid‑May, slipped toward...
Fed Independence Under Threat, Says Former Central Bank Executive
Former Federal Reserve vice chair Donald Kohn warned that political pressure on central‑bank independence is set to intensify as supply‑driven inflation and soaring public debt create fertile ground for interference. Speaking at a Bank of Japan conference, Kohn argued that...
‘Investment Climate Not in Great Shape’: Former PM Modi Advisor Urges FDI Reforms as Outflows Surge in FY26
Former Economic Advisory Council member Surjit Bhalla warned that India’s investment climate is deteriorating as foreign‑direct investment outflows surged to $27 billion in FY 26. He urged a liberalisation of FDI rules, faster dispute‑resolution, and stronger tax incentives to restore investor confidence....
Japan, South Korea and Taiwan Are Suffering Industrial Rot
Japan, South Korea and Taiwan are posting headline‑grabbing export and profit gains, with Taiwan’s GDP expanding 14% and South Korean conglomerates posting a 159% profit surge. Japan’s post‑pandemic exports have grown four times faster than its overall economy, creating the...
Africa’s Tax Push Is Clashing with the Reality of Its Informal Economies
Africa’s economies are dominated by informality, with roughly 90% of Sub‑Saharan jobs outside the formal sector. Yet tax‑to‑GDP ratios sit at about half the OECD average, prompting governments in Nigeria, Kenya and Senegal to expand domestic tax bases, often targeting...
What’s Making International, Emerging Markets More Attractive Now?
Purpose Investments’ chief strategist Craig Basinger now favors a modest overweight in international equities, especially Japan, and a renewed exposure to emerging markets. He cites fiscal stimulus in Europe, governance reforms in Japan, and disciplined monetary policies in key emerging...
Rupee to Hit 99, Fiscal Deficit at 5%: Rahul Bajoria Sees Deeper Pain Ahead for India
India’s macro outlook is under pressure as BofA Securities’ Rahul Bajoria projects the rupee to slip to around ₹98‑99 within the next year and the FY27 fiscal deficit to widen to 5% of GDP, above the government’s 4.3% target. The...
Trump Risks Triggering Financial Crisis with Iran War, Warns ECB
The European Central Bank warned that a potential war between the United States and Iran, spurred by President Trump’s hard‑line stance, could ignite a global financial crisis. Lagarde highlighted the fragility of oil‑dependent economies and the risk of sudden capital...
India’s External Shock Is an Economic Opportunity
India’s external account is under strain as energy imports rise, shipping routes face geopolitical risk, and capital markets react to global tensions. Prime Minister Narendra Modi has urged citizens to curb gold purchases, limit overseas travel, use public transport and...
Turkey Challenges Ukraine’s 26.9% Tomato and 22.8% Cucumber Duties
Turkey has formally asked Ukraine to suspend or cancel the anti‑dumping duties imposed in July 2025 on Turkish tomatoes (26.9%) and cucumbers (22.8%). The duties, which apply to most Turkish exporters, are slightly lower for Talya Fresh at 25% for...
China Rejects Indian Rice Consignments on Alleged GMO Presence, Again
China has again rejected Indian non‑basmati rice consignments, alleging GMO contamination, despite India’s official stance that no GM rice is cultivated. About 70 shipments have been turned away since March, prompting Indian exporters to hold back roughly 200 containers and...
Ida Wolden Bache: Research-Based Models in Monetary Policy Decision-Making
Ida Wolden Bache outlined how Norges Bank relies on a suite of macro‑economic models, anchored by the NEMO general‑equilibrium framework, to guide monetary‑policy decisions. The bank continuously updates its modelling system with high‑frequency data, micro‑level household transaction records, and now...
Aino Bunge: How Can AI Influence the Economy and Monetary Policy?
AI has moved from niche research to a pervasive force reshaping markets and society, spurred by generative models like ChatGPT. Recent headlines range from AI‑generated music topping charts to record‑breaking stock rallies for AI firms, while legacy sectors see sharp...
Speed up Plans to Close Import Tax Loophole on Small Parcels, British Firms Say
Britain’s leading retailers, including ASOS, Marks & Spencer and NEXT, have urged the government to accelerate a plan to tax low‑value imports, proposing a £2.60 (≈$3.30) charge per small parcel. They argue the current £135 (≈$170) de‑minimis exemption gives overseas...
EU-China Trade Tensions Spiral, Stocks Rally on AI Boom, More
Bloomberg reported that escalating trade tensions between the European Union and China have intensified, with the EU announcing provisional anti‑dumping duties on Chinese solar panels and automotive parts. The dispute has prompted a short‑term slowdown in EU‑China supply‑chain activity, while...
Developing Economies Squeezed by Rising Trade Compliance Costs
The United Nations Conference on Trade and Development reports that non‑tariff measures—such as certification rules and technical standards—now generate higher trade costs than traditional tariffs for most nations. Developing economies are feeling the squeeze as compliance expenses rise, eroding profit...
Australia Consumer Inflation Slows in April, Core Creeps Higher
Australian consumer prices rose 0.4% in April, easing the annual CPI to 4.2% from 4.6% and beating median forecasts. The slowdown was largely driven by a temporary fuel tax rebate, which softened headline inflation. Meanwhile, the trimmed‑mean core inflation measure...
Luis De Guindos: Financial Stability Review - May 2026
ECB’s May 2026 Financial Stability Review warns that the closure of the Strait of Hormuz and attacks on energy infrastructure have triggered a severe geoeconomic shock, raising energy prices and stoking inflation across the euro‑area. While banks have bolstered capital and...
ASX Climbs After Inflation Data Sparks Hopes for Rate Reprieve
Australian shares rebounded on May 27 as the April CPI slipped to 4.2%, below forecasts, reviving expectations that the Reserve Bank of Australia will pause its tightening cycle. The S&P/ASX200 gained 0.7% to 8,717.70, with all sectors in the green,...
Q3 2026 Investment Outlook – Where Capital Meets the Future
HSBC Private Bank’s Q3 2026 Investment Outlook highlights AI, energy independence and security as the primary catalysts for the next wave of capital allocation. The bank projects a stable U.S. Federal Reserve rate path through 2026 and stresses the role...
IPES-Food Report Warns Trade Wars and Supply Chain Fragility Are Driving Global Food Insecurity
The International Panel of Experts on Sustainable Food Systems released a May 2026 report warning that trade wars and fragile supply chains have pushed global food prices 35% above 2019 levels and driven the food import bill to a record $2.2 trillion...
America Built the Last Financial Architecture. Will It Build the Next One?
The United States built the post‑war financial architecture that underpins global capital markets, but digital assets and tokenization are now reshaping payments, issuance, and cross‑border flows. Private‑sector leaders such as JPMorgan’s Kinexys platform and tokenized funds from BlackRock and Franklin...
Indonesia’s Dive Into Economic Nationalism
Indonesia President Prabowo Subianto announced that all exports of selected raw materials will be funneled through a new state‑owned enterprise under the Danantara holding. The move is pitched as a way to combat under‑invoicing, which the government estimates cost $6.5 billion...
France Signals Volte-Face on ‘Made in Europe’ Subsidies for UK Car Industry
France announced it will reverse its earlier stance and allow UK car manufacturers to qualify for the EU’s “Made in Europe” subsidy programme. The change opens up to €2.5 billion in support over the next five years, aimed at preserving jobs...
A Warning to Critical Minerals Buyers: Avoid Butter Mountains, Aluminium Floods
Western governments are pouring tens of billions of dollars into critical minerals to curb China’s dominance, with the U.S. earmarking over $20 bn and Australia $9.4 bn. Analysts warn that uncoordinated subsidies could create a new “butter mountain” or “aluminium flood” scenario,...
Chinese Refiners Are Absorbing Much of the Hit From Hormuz Shutdown
The Hormuz crisis knocked out 12‑15 million barrels per day of Middle Eastern crude, yet Brent prices have lingered between $95‑110 per barrel. China slashed seaborne crude imports to 6.6 million barrels per day in May—about a third of its normal volume—absorbing...
Industrial Policy, Tariffs, and the Return of Global Imbalances
Global imbalances have resurfaced as current‑account surpluses and deficits widen post‑pandemic, driven largely by the United States and China. Recent research distinguishes between micro‑industrial policies, which target specific sectors, and macro‑industrial policies that influence economy‑wide saving. The authors argue that...
Strait of Hormuz Delays Are Translating Into Downstream Production Losses
The Strait of Hormuz is no longer a closed waterway but a timing bottleneck, with vessels facing detention and extended transits. These delays ripple through global supply chains, forcing chemicals, fertilizer, aluminum and industrial‑gas plants to halt or run below...
Nepal, India, and the Paradox of Hydro-Hegemony
Nepal aims to become South Asia’s “hydropower battery,” targeting 28.5 GW of capacity by 2035—13.5 GW for domestic use and 15 GW for export, chiefly to India and Bangladesh. The country’s export‑oriented model hinges on India as both the largest buyer and the...
Rising Geoplitical Tensions Show Why Canada’s Agri-Food Trade Strategy Needs to Change
Canada’s agri‑food sector, worth $149.2 billion in 2024, faces mounting trade disputes with the United States, China, India and Saudi Arabia. Over‑reliance on the U.S.—which absorbs about 62% of exports—creates vulnerability, as illustrated by volatile canola shipments. Recent diplomatic breakthroughs in...
The Guardian View on Britain’s Economy: To Profit Politically a Recovery Must Be Felt in People’s Pockets | Editorial
The Guardian editorial warns that political claims of a British economic recovery are outpacing the lived experience of households. Recent data shows unemployment unexpectedly rising to 5% and vacancies hitting their lowest level since early 2021, while real disposable income...
Oil Back at $100 as US Strikes Douse Iran War Hopes
Oil prices rebounded above $100 on Tuesday after U.S. military strikes on Iran disrupted expectations of a swift deal to reopen the Strait of Hormuz. Brent crude jumped 4.4% to $100.41 a barrel, while equity markets showed mixed reactions: the...
Middle East War Adds $5.5 Billion to Ocean Carriers' Bunker Costs: Sea-Intelligence
Since the Feb. 28 outbreak of the Middle East war, bunker fuel prices have surged, adding roughly $5.5 billion to container carriers’ operating costs. Hapag‑Lloyd alone estimates a $50 million weekly hit. To recoup the expense, ocean carriers have rolled out emergency fuel...
A Tale of Two Consumer Sentiment Gauges
Consumer confidence slipped in early May, with the Conference Board’s index dropping 0.7 points to 93.1, while the University of Michigan’s survey plunged to new historic lows. Both gauges signal that households are feeling the pinch of a war‑driven energy...
The Gangster Logic of Trump’s Tariff Wars
President Donald Trump has escalated tariffs into tools of extortion, demanding investment commitments from trading partners that serve his political agenda. In his second term, the administration pairs tariffs with sanctions to pressure both allies and adversaries. This shift from...
Toyota's U.K. GR Corolla Production Plan Could Increase Tariffs on All British-Made Cars in the U.S.
Toyota is relocating production of its performance‑oriented GR Corolla from Japan to its Burnaston plant in the United Kingdom, adding up to 10,000 units a year. The move trims the model’s import tariff from 15% to 10% under the current...
Gas Is up 51% Since February. Americans Just Started Buying Less of Everything Else
U.S. gas prices have jumped 51% since February, reaching an average $4.49 per gallon, while consumer confidence slipped to 93.1 in May—the first decline after three months of gains. Inflation accelerated to 3.8% in April, well above the Federal Reserve’s...