Macro

May inflation hit a three-year high, driven mainly by rising energy prices, pushing Fed rate cuts further out.

May’s jobs report showed a surprisingly strong labor market on the surface, but underlying weakness and persistent inflation may keep the Fed from cutting rates anytime soon.

A stronger-than-expected jobs report reduced expectations for Fed rate cuts, highlighting a slowing but still resilient U.S. economy.

The biggest...

For most of the past year, it seemed like the US economy was finally recovering from the extreme inflation that followed the pandemic. Inflation had fallen significantly from its 2022 peak, and many investors believed the Fed would begin cutting interest rates this year. That all changed in February, when the US and Israel launched attacks on Iran, disrupting energy markets and causing oil prices to soar.

The UAE’s exit from OPEC, driven by frustration with production quotas, threatens the oil cartel’s cohesion, offering clues to long-term crude prices as the Strait of Hormuz opens.