US Macro Policy Watch

PCE Inflation Surge & Fed Outlook

• 🔥 May PCE Hits 4.1%: May PCE rose 4.1% YoY and core 3.4% YoY (3-year high), with consumer spending up 0.7%,...

• Headline PCE rose to 4.1% YoY in May from 3.8% in April; core PCE hit 3.4%
• Consumer spending surged 0.7% MoM even as prices climbed, aided by tax refunds
• Core momentum and broad price pressures keep at least one Fed rate hike likely this year

AI infrastructure spending is embedding structural cost pressures in chips and power that outlast oil or tariff effects.

• Data center demand is...

The Kansas City Fed's Composite Manufacturing Index climbed to 11 in June from 8 in May, reflecting moderate gains across production, new orders, and employment. This regional uptick stands as a data point amid the district's latest survey release.

Warsh is under mounting pressure as 4.1% PCE inflation clashes with White House rate-cut preferences, boosting September hike odds and lifting...

Treasury Secretary Bessent warned that tariffs could revert to prior levels if Section 301 probes succeed, replacing the interim 10% global tariff...

Fed Policy Shift

• 🔥 Forward Guidance Ended: New Chair Kevin Warsh led the Fed to drop forward guidance at the June FOMC meeting, holding rates...

New Chair Kevin Warsh ditched forward guidance at the June 17 FOMC meeting, scrapping the post-2008 playbook and leaving markets without a policy...

• DXY climbs to one-year high near 101.60 ahead of PCE, showing broad USD strength.
• USD/CAD drops to 1.4230 as CAD gains from collapsing oil prices...

US oil executives expect only slight domestic production growth of 2-3% at current ~$70 WTI prices, citing geopolitical uncertainties around the Iran...

Fed Policy Update

• 🔥 Rates Held Steady: FOMC voted unanimously to keep the federal funds rate at 3.5%-3.75% in Warsh's first meeting as chair,...

New Fed Chair Warsh struck a hawkish tone on 4% inflation in his first press conference, reversing initial market gains from the Iran MOU.

• Markets...

The US-Iran MoU signed June 15 reopens the Strait of Hormuz and lifts the naval blockade, sending oil prices to three-month lows.

• This directly...

Economists' Fed outlooks have swung to extremes amid oil volatility, AI investment, and uneven consumer strength.

• Dovish camp: Natixis and Citi see...

New Fed Chair Kevin Warsh's first meeting kept rates unchanged but delivered the shortest statement since 2007, with a hawkish dot plot showing 9 of...

New Fed Chair Kevin Warsh signaled a new era at his debut press conference, holding rates at 3.50%-3.75% while nine officials now project at least one...

• Mortgage applications dropped 3.8% for the week ending June 12 after CPI data weighed on demand
• 30-year fixed rates stayed unchanged at 6.60%, yet...

New Fed Chair Kevin Warsh held the policy rate at 3.5-3.75% in his first FOMC meeting, yet nearly half of policymakers signaled support for a hike...

New Fed Chair Kevin Warsh's first FOMC meeting kept rates unchanged at 3.5%-3.75%.

• Policy statement removed language signaling future rate cuts.
  -...

Markets have now priced in two Fed rate hikes, with 2-year yields surging over 13 bps to 4.19% and March 2027 futures at 4.08%. The dollar tests 100.40 resistance while the policy shift signals a hands-off Fed approach.