Section
Economy
U.S. factory output rises 0.6% as autos, AI lift production
U.S. manufacturing output rose 0.6 per cent in April as motor vehicles and AI-linked demand drove production higher, but New York Fed data showed delivery times lengthening and price pressures accelerating.
U.S. inflation forecast jumps to 6% as traders harden Fed bets
Economists now see U.S. inflation near 6 per cent in the second quarter, pushing Treasury yields higher and lifting bets on a tougher Fed path.
Fed transition uncertainty deepens as Trump nominees resist Powell stopgap role
Resistance to Jerome Powell serving briefly as chair pro tempore leaves investors weighing a messy handoff to Kevin Warsh just as futures markets start to price a fresh Fed hike.
Markets price Fed hike by January after hot inflation
Traders shifted from betting on Fed cuts to pricing a 60 per cent chance of a 25-basis-point hike by January after hotter inflation forecasts and rising Treasury yields.
The ECB and BoE Are Unlikely to Rush With Rate Hikes
Europe's two largest central banks kept borrowing costs on hold at their April meetings, but the direction of the next move is no longer ambiguous. Rising energy prices and sticky services inflation are forcing Frankfurt and Threadneedle Street to confront a question neither wants to answer: how much growth are they willing to sacrifice to keep inflation expectations anchored?
Warsh confirmed: 12 Fed voters gather as Powell's final meeting looms
Kevin Warsh joins the FOMC this week after a 51-45 Senate confirmation, taking a seat at the table just three days before Jerome Powell's term as chair expires. With April inflation at 3.8% and Iran-driven energy costs still climbing, the 12 voting members are almost certain to hold rates steady.
Warsh Confirmation Meets 3.8% CPI as Rate-Hike Bets Eclipse Cuts
The April consumer price index rose 3.8 per cent year-over-year, beating every Wall Street estimate as Kevin Warsh's Senate confirmation vote approaches. Markets now price a greater than 50 per cent chance of a rate increase by January 2027, upending the rate-cut mandate that defined his nomination.
Student loan defaults 2026: 3.6M borrowers enter default
Student loan defaults: 3.6M federal borrowers entered default as pandemic protections unwind. Credit scores dropped 91 points, NY Fed data show.
The ECB held rates in April. A June hike now looks like the baseline.
Eurozone inflation jumped to 3.0 percent in April, driven by an Iran-conflict energy shock, and ECB policymakers are signaling the first rate hike since the easing cycle is coming in June.
BoE rate-hike bets leap to 68 bps, approaching three quarter-point moves
Investors pushed Bank of England rate-hike wagers sharply higher on Tuesday, piling 12 basis points of additional tightening into futures contracts in a single session as global geopolitical tensions and domestic political uncertainty converged to darken the UK inflation outlook.
ECB's Nagel: Two More Rate Hikes Are the Baseline
Bundesbank President Joachim Nagel said the ECB's baseline scenario now includes two additional rate increases this year as the Iran war fuels inflation, hardening the case for a June move.
Senate advances Warsh Fed nomination as inflation pressures mount
The Senate voted 49-44 on Monday to advance Kevin Warsh's nomination as Federal Reserve chair, setting up a May 15 confirmation vote that would hand him a central bank grappling with 3.3% inflation and an impatient White House.
April CPI seen at 3.7%, highest since 2023, on Iran oil spike
The April consumer price index is expected to show US inflation accelerating to 3.7% year-on-year, the fastest pace since September 2023, as the oil shock from military strikes on Iran feeds through to gasoline and grocery prices.
BofA rules out rate cuts before second half of 2027 on sticky inflation
Bank of America Global Research has scrapped its forecast for Federal Reserve rate cuts in 2026, pushing the first reduction to the second half of 2027 as core inflation holds at 3.3 per cent and an Iran-driven energy shock keeps the central bank on the sidelines.
Fed is running out of reasons to cut rates
A stable labour market, sticky inflation above 3 per cent, and a rapid sell-side pivot away from rate-cut forecasts have eroded the Federal Reserve's case for easing. The debate on the FOMC has shifted from how fast to cut to whether the next move is a hike.
China April exports jump 14.1%, smash forecasts as factories front-run tariffs
China's exports surged 14.1 per cent in April from a year earlier, more than quintupling the 2.5 per cent gain posted in March and handily beating economist forecasts of 7.9 per cent, as factories raced to ship orders ahead of potential tariff escalations and Middle East supply disruptions.
Lagarde rejects euro stablecoins, warns $300bn market threatens ECB policy transmission
European Central Bank President Christine Lagarde rejected calls for the euro area to promote euro-denominated stablecoins, warning that the $300 billion market risks financial stability and would narrow the channel through which ECB rate decisions reach the real economy.
Boston Fed's Collins warns Iran conflict will keep rates elevated into 2027
Boston Federal Reserve Bank President Susan Collins backed the FOMC's hawkish dissenters on Wednesday, warning that the Iran conflict is fuelling persistent inflation through energy-price shocks and that interest rates should stay on hold for an extended period.
Goldman delays Fed rate cut path to December as Iran shock persists
Goldman Sachs has pushed back its forecast for the Federal Reserve's 2026 rate cuts to September and December, citing oil-driven inflation from the US-Iran war. The shift aligns the bank with the Fed's own dot plot and the Wall Street consensus that easing will arrive late.
Powell holds rates 3.5-3.75%, ties inflation to Trump tariffs in farewell
Federal Reserve Chair Jerome Powell held rates steady at 3.5 to 3.75 per cent on April 29 and pinned elevated inflation on Donald Trump's tariffs. He told reporters he will stay on as governor through January 2028.
ECB heads into June split as Villeroy pushes back on Frankfurt hawks
Banque de France governor François Villeroy de Galhau told an audience in Paris that the next ECB move should track the data, not the calendar, in a public pushback at Bundesbank president Joachim Nagel and Austria's Martin Kocher, who had effectively lined the Council up for a 25 basis point hike on 5 June.
Bank of America sees no Fed rate cuts until second half of 2027
Bank of America Global Research no longer expects the Federal Reserve to cut interest rates this year, pushing its forecast for the next reduction to the second half of 2027. Sticky inflation at 3.3 per cent and April's stronger-than-expected jobs report have shifted the outlook.
Oil jumps above $102 after US-Iran fire exchange in Strait of Hormuz
Oil prices surged above $102 a barrel after Iran and the United States exchanged fire in the Strait of Hormuz, threatening the fragile month-old ceasefire and adding a fresh risk premium to crude markets.
Fed flags oil shock, geopolitical risks as top stability threats in semi-annual report
The Federal Reserve's semi-annual Financial Stability Report found geopolitical risks and the oil shock from the Iran war were the top concerns of survey respondents, with AI and private credit rising as prominent worries.
Banxico cuts rate to 6.50% in split vote, signals end of easing cycle
The Bank of Mexico cut its benchmark rate to 6.50 per cent in a 3-2 split vote and signaled that the two-year easing cycle is over, even as inflation remains above target and the board is divided on whether the hold will stick.
