💡Quote of the week
“When I was a kid, a skunk infiltrated my family’s basement and discharged its vile-smelling spray, briefly making the property unlivable. Once we called animal control and conducted a deep clean, the situation quickly transitioned from acute crisis to nuisance: The home was livable again, but the smell proved difficult to fully eradicate from carpeting and furniture. That’s roughly where Federal Reserve policymakers find themselves in the fight against inflation.” - Jonathan Levin, Bloomberg journalist
Investment news
🇺🇸 📉 U.S. inflation slows again. The inflation rate rose at a 4% annual rate in May, the lowest in more than two years. (CNBC)
The consumer price index rose just 0.1% for the month, bringing the annual level down to 4% from 4.9% in April. That 12-month increase was the smallest since March 2021.
🏦 Let’s pause. After a series of significant interest rate hikes, the Fed is expected to take its first break from this interest rate-hiking campaign. However, they are also likely to indicate that another hike may be on the horizon this year due to persistently high inflation and robust job growth. (Bloomberg)
The Federal Open Market Committee is expected to keep its benchmark lending rate at the 5%-5.25% range, marking the first skip after 10 consecutive increases going back to March of last year.
⭐ Gold goes up. Gold prices ticked up on Wednesday, helped by a weaker dollar as slowing U.S. inflation cemented bets that the Fed would keep interest rates unchanged.
Spot gold increased by 0.2% to $1,946.29 per ounce, while the U.S. gold futures price was almost unchanged at $1,959.20.
📈 Stocks rise after inflation report. Stocks went up Tuesday after new inflation data showed price pressures slowed again in May, adding to investor optimism that the Fed could skip a rate hike. (CNBC)
The Dow Jones Industrial Average traded 145.79 points higher, or 0.43%, to close at 34,212.12. The S&P 500 added 0.69% to close at 4,369.01, and the Nasdaq Composite ticked up 0.83% to 13,573.32.
🛢️ Brent outlook. Goldman Sachs analysts cut their oil price forecast by almost 10% as Russian supply recovers and demand for crude slows. (CNBC)
According to a report released late Sunday, Goldman lowered its Brent outlook for December to $86 a barrel, down from $95 a barrel.
📸 Image of the week
Opinion
🤔 Sticky inflation. “There’s a persistent and slightly foul whiff of inflation in America, and they can metaphorically open a few more windows and buy more scented candles or, alternatively, they can cave into the hawks, raze the house (in this case the US economy) and rebuild from scratch. Personally, I’d vote for the candles.” (Bloomberg Opinion)
“The pessimistic view is that we’ve been making excuses like that (“it’s just energy”; “it’s just automobiles”; “it’s just housing”) for what seems like the duration of this two-and-a-half-year inflationary episode. But inflation just keeps bounding from one category to the next and then coming back around again,” Bloomberg’s Jonathan Levin writes.
What else is happening
⚫ Silvio Berlusconi dies aged 86. Berlusconi, the billionaire media mogul and former Italian prime minister had suffered from leukaemia and recently developed a lung infection. (Reuters)
He passed away at the San Raffaele hospital in Milan where he had been admitted on Friday. His five children, partner Marta Fascina, and younger brother Paolo were by his side during this time, according to a hospital spokesperson.
🇷🇺 Putin: Russia may ditch Ukraine grain deal. Using the word "war" several times, Russian President Vladimir Putin offered a barrage of warnings to the West, saying Moscow was considering ditching the Black Sea grain deal and adding that he faced a question only he could answer - should Russia try to take Kyiv again? (Reuters)
"Should we return there or not? Why am I asking such a rhetorical question? Only I can answer this myself," Putin said.
🙅♂️ Not guilty. Donald Trump pleaded not guilty Tuesday to the first federal charges ever filed against a U.S. president, planning to attend big money fundraiser at his New Jersey golf club after his arraignment. (CNBC)
Trump returned to his golf course later on Tuesday for a 2024 campaign fundraiser that calls on donors to raise or give $100,000 for the Trump Save America Joint Fundraising Committee.
And finally…
🪨 Molecular fossils open window on “lost world” of primordial life. Ancient rock samples, dating back approximately 1.6 billion years, have revealed the fossilized remains of a crucial cell membrane ingredient. This exciting discovery unveils a glimpse into a captivating "lost world" of microorganisms that paved the way for Earth's diverse life forms, from fungi and algae to plants and animals — yes, even humans! (Reuters)
Researchers revealed that these remnants belong to the Proterozoic Eon, a critical era in the development of complex life. This period has long been veiled in mystery due to the incomplete fossil record of the minute organisms that thrived in Earth's marine environment.
See you next week!
