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The "Hot Rate-Cut Summer" is officially dead. May's Personal Consumption Expenditures index — the Fed's preferred inflation gauge — hit 4.1%, the highest annual reading in over three years, with core PCE holding at 3.4%. Economists have stopped asking when the Fed will cut and started asking how soon it will hike. Markets broadly expect the Fed to hold steady at the July 16-17 meeting, but September is very much in play for a rate increase, according to pricing in...
IMF chief economist Pierre-Olivier Gourinchas, in his parting interview before leaving next week, warned that "tit-for-tat" trade warfare is "self-defeating." The timing was deliberate — he spoke hours after Donald Trump threatened a 100% tariff on any country that taxes American tech giants. The trade war isn't broadening; it's mutating into a new dimension.
4.1% — That's where the US Personal Consumption Expenditures (PCE) Price Index landed in May, the Fed's preferred inflation gauge hitting its highest mark in three years. Core PCE, which strips out food and energy, rose to 3.4%, up from 3.3% in April. Both numbers sit at more than double the Fed's 2% target, and markets took the hint: the probability of a September rate hike now sits around 80%, according to CME Fed funds futures, even as July looks like a...
4.1% — the Fed's preferred inflation gauge hit a three-year high in May, matching forecasts. The good news? Monthly PCE came in at 0.4%, a tick below the 0.5% Wall Street feared. Core PCE ran 3.4% annually and 0.3% month-over-month, both as expected. Here's the scorecard:
| Indicator | Actual | Forecast | Prior |
|---|---|---|---|
| PCE YoY | 4.1% | 4.1% | 3.8% |
| PCE MoM | 0.4% | 0.5% | 0.4% |
| Core PCE YoY | ... |
The world's three largest central banks are pulling in opposite directions — with the Federal Reserve positioning for rate hikes, the Bank of Japan signaling gradual tightening, and the European Central Bank flirting with cuts — unleashing a dollar rally that's reshaping global trade flows and currency markets overnight.
The Federal Reserve's hawkish pivot is reshaping global markets this week, and Bank of America threw gasoline on the fire. BofA flipped its 2026 outlook entirely, now forecasting three rate hikes this year — targeting a fed funds rate of 4.25% to 4.5% that would erase all of 2025's cuts. The Bloomberg Dollar Spot Index hit a seven-month high, touching levels not seen since last November, as traders price in nearly two quarter-point increases by early 2027.
Trade Routes -...
Central banks are sprinting in opposite directions,...
Wall Street's favorite parlor game — "How many rate hikes this year?" — just...
Kevin Warsh was supposed to be Trump's rate-cutter. Instead, the new Fed Chair has shocked markets with a hawkish inflation-first stance, sending the dollar to 13-month highs near 101 on the DXY and forcing Asian central banks into damage-control mode. The 10-year yield holds at 4.51%, and the gap between Wall Street rate forecasts has become a chasm.
Alan Greenspan, the 13th chairman of the Federal Reserve who served under four presidents and defined modern American monetary policy, died Monday morning at his home at age 100 from complications of Parkinson's disease, his wife Andrea Mitchell announced. The Fed issued an official statement noting with "deep sadness" that Greenspan's contributions "left a lasting mark on this...
| Indicator | Status | Key Data |
|---|---|---|
| Inflation | Sticky | CPI at 4.2% (highest since April 2023); PCE data due this week expected to show acceleration |
| Jobs | Solid | +172K jobs added in May; unemployment near historic lows |
| Consumer Spending | Mixed | Retail sales rose 0.9% in May, beating expectations — but shoppers are getting picky |
| Consumer Sentiment | Brutal | U. Michigan index at 48.9 — slightly up... |
The era of waiting for rate cuts is over. Central banks across the world's major economies — from Washington to Frankfurt to Moscow — are signaling that elevated borrowing costs are here to stay, as inflation proves stickier than markets hoped.
New Fed Chair Kevin Warsh has made his first big mark — and it's a loud silence. Warsh slashed the Fed's post-meeting statement from 341 words to 132, formally ending decades of forward guidance. The...