Global Macro Digest

Key UK macro tensions:

• Q1 GDP beat shows economic resilience, but forward indicators signal slowdown from energy shocks and geopolitical risks.
  -...

Key inflation surprise: US PPI jumped 1.4% MoM—biggest since 2022—and 6% YoY, highest in >3 years, driven by energy +8% and gasoline +15%.
-...

• US: 30Y Treasury sold above 5% yield, first since 2007, amid mounting investor unease
• UK: 30Y gilt yields reach 5.807%, highest since 1998, due to...

US Producer Inflation Surge

• 🔥 April PPI +1.4% MoM: Producer Price Index surged 1.4% in April, the largest monthly gain in four years, exceeding...

Higher debt levels cause sticky inflation by dragging inflation expectations, leading to higher inflation unlike canonical New Keynesian models—complicating central bank normalization.

• Futures pricing hikes: Market now sees 59.1% odds of fed funds rate above current 3.63% by end-2027, making hikes more likely than cuts.
• Taylor...

June SEP rate projections could expose whether Warsh is as dovish on rates as Trump hopes—critical signal for Fed policy expectations and macro positioning.

US federal deficit projected to hit $2 trillion in FY2026, doubling the bipartisan 3% GDP target. Escalation heightens fiscal dominance risks, pressuring Treasury issuance and yields for global macro positioning.

Tom Hoenig warns of inevitable dollar purchasing power decline amid exploding national debt & deficits.

• Warsh Fed faces oil shock inflation from...

April PPI shocks at 1.4% MoM (vs 0.5% exp.), largest in 4 years, with YoY at 6.0% (vs 4.9%). Core up 1.0% MoM (vs 0.4%) signals broad pressures.

-...

Inflation timeline tests Fed pivot:

• CPI hit fastest pace in 3 years at 3.8% Tuesday, driven by Middle East oil disruptions.
• PPI biggest gain since...

Fiscal dominance intensifies: US national debt crosses $36 trillion, with interest payments nearing $1T in 2026 amid high rates.

• New Fed chair...

Key macro signals from Japan:

• BOJ board considers June 2026 rate hike from 0.75%, citing Middle East tensions (Iran-Israel) driving energy costs and...

• Monetary paradigm shift: Middle East escalation and Hormuz risks end 2026 rate cut hopes; Fed holds rates high longer, ECB faces multiple hikes from...

US April CPI Upside Surprise

• 🔥 Headline CPI at 3.8% YoY: US CPI rose 3.8% YoY in April, the fastest pace since 2023, and 0.6% MoM, driven by...

Key April CPI highlights:

• Headline rose 3.8% YoY, fastest since 2023
• Core up 0.4% MoM, 2.8% YoY
• Driven by gasoline climb and grocery costs
  -...

Rising yields underscore fiscal dominance amid inflation and deficits, eroding Fed cut expectations:

• 30-year yield at 5.03%, highest since May 2025...

Markets repricing aggressively post-hot CPI and US-Iran oil disruptions:

• No cuts dominant: 98% hold June 2026, 92% July; 61.9% no 2026 cuts (up from...

Upside CPI surprise hits 3.8% YoY (vs 3.7% exp, 3.3% prior), +0.6% MoM, driven by energy +3.8% from Iran war supply choke and food +0.5%.

• Real wage...

Global liquidity is rising, driven by Fed & Treasury actions. This weekly update signals improved financial conditions, supporting risk sentiment and policy expectations in macro investing.