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5 days ago | 
think.ing.com | Carsten Brzeski |Warren Patterson |Francesco Pesole |James Knightley
On Sunday morning, the conflict in the Middle East escalated further with the US bombing three nuclear facilities in Iran. US President Donald Trump called the strikes “very successful” and US Defence Secretary Pete Hegseth claimed that the US had “obliterated” the facilities, while Iran reported only limited damage. This leaves us with the all-too-familiar sense that we understand far less than we thought we did this morning.
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1 week ago | 
think.ing.com | James Knightley |Bert Colijn |David Havrlant
THINK Ahead in developed markets United States Powell's testimony (Tues): The main event will be Federal Reserve Chair Jerome Powell’s semi-annual Monetary Policy testimony to Congress. In a highly partisan environment, he will face criticism from certain members of the Republican Party for not cutting interest rates, aligning with the views of President Trump.
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1 week ago | 
think.ing.com | James Knightley |Padhraic Garvey |Francesco Pesole
Fed still projecting rate cuts this year Unsurprisingly there was no policy rate change from the Federal Reserve at today’s FOMC meeting. This leaves the Fed funds target rate range at 4.25-4.5%. The accompanying statement adds little, repeating that activity is expanding at a "solid pace" while inflation "remains somewhat elevated". It was a unanimous decision.
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1 week ago | 
think.ing.com | James Knightley
United States US retail sales have fallen for two consecutive months, unwinding most of the the pre-tariff spending splurge. Households are worried about what tariffs may mean for spending power and are increasingly cautious on the jobs market outlook.
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2 weeks ago | 
think.ing.com | Warren Patterson |James Smith |James Knightley |Peter Vanden Houte
What’s happened Israel has launched coordinated strikes on Iran’s primary nuclear and ballistic missile facilities, as well as targeting senior IRGC commanders and nuclear scientists. In response, Iran has retaliated with approximately 100 drones aimed at Israeli territory and marking a major escalation in regional hostilities. Israel has declared a state of emergency, framing the strikes as pre-emptive and warning of further operations.
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2 weeks ago | 
think.ing.com | James Smith |James Knightley |Charlotte de Montpellier |Francesco Pesole
Good cuts, bad cuts Alright, kids, what meme best describes how markets are thinking about central banks right now? How about Gru from Despicable Me? If you’ve not heard of him – and I’ll confess I hadn’t - it’s a scene where he’s explaining his faultless plan to steal the moon, only for it to take an unexpected turn mid-way through. Bear with me and let me explain my thinking. That's if it's not already clear from my work of art above... Rate cuts come in two forms.
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2 weeks ago | 
think.ing.com | James Knightley |Padhraic Garvey
Updated Fed forecasts could suggest just one cut in 2024 The Federal Reserve is widely expected to leave monetary policy unchanged on 18 June. Central Bank officials have suggested they will be patient in assessing the impact of the President’s tariff policy on growth and inflation, implying little prospect of a rate change before September. The key thing to watch will be updated Fed forecasts and whether they continue to point to 50bp of rate cuts both this year and next.
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2 weeks ago | 
think.ing.com | James Knightley
Consumer spending and investment held up pretty well in the first quarter, but the steep falls in consumer sentiment seen so far this year suggest we should expect to see a cooling over subsequent quarters. While inflation has been surprisingly benign so far, households are anxious about tariff-induced price hikes that will squeeze their spending power over the summer.
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2 weeks ago | 
think.ing.com | James Knightley
0.1% MoM Lower than expected Subdued inflation shows no signs of pre-emptive price hikes We’ve had a very comforting set of US inflation numbers for May with both headline and core CPI rising 0.1% month-on-month versus market expectations of 0.2% for headline and 0.3% for core.
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3 weeks ago | 
think.ing.com | James Knightley
139K US nonfarm payrolls Respectable jobs data for May The May US jobs report shows nonfarm payrolls rising 139k versus the 126k consensus and April's print of 147k. April was initially reported as 177k, and together with adjustments to March's numbers, we get a net 95k of downward revisions to the previous two months of jobs data.
