Japan’s economy shrank for 1st time in a year, highlighting how fragile it is—even before feeling full effects of Trump’s tariffs.
Japan’s inflation-adj GDP fell by 0.7% in Q1 annually. That’s worse than economists expected—they had predicted a smaller decline of 0.3%. Source: Bloomberg, HolgerZ
In case you missed it
US Core PPI fell to 2.4%, lower than expectations 👀It is the lowest MoM print since April 2020 lockdowns Here are the PPI details 🥶🥶🥶 PPI MoM: -0.5% vs 0.2% exp. PPI YoY: 2.4% vs 2.5% exp. PPI Core YoY: 3.1% vs 3.1% exp. Source: Mike Zaccardi, CFA, CMT 🍖
In the US, Shelter CPI has now moved down from a peak of 8.2% in March 2023 (highest since 1982) to 4.0% today (lowest since November 2021).
Given its long lag vs. real-time rental data, a continued move lower is expected which should lead to a continued decline in core inflation. Source: Charlie Bilello @charliebilello
Recession Cancelled?
McDonald's $MCD to hire 375,000 workers this summer 🚨🚨🚨 Source: Barchart, CNBC
House tax proposal is out.
$4T in Tax Cuts $1.5T in Spending Cuts 👉 Another $2.5T added to the deficit. 🟢 Amazing for stocks, gold, and bitcoin. 🔴 Terrible for bonds Same old story as always. Source: Spencer Hakimian on X, Bloomberg
The largest trade deficits and surpluses with the US
Source: Markets & Mayhem @Mayhem4Markets
As expected, BoE cut rates by 25bps! (5-4 vote).
It came as Donald Trump hinted a UK-US trade pact was imminent. Some MIXED SIGNALS - Two members (Swati Dhingra and Alan Taylor) preferred to reduce Bank Rate by 0.5 percentage points, to 4%. Two members (Catherine L Mann and Huw Pill) preferred to leave Bank Rate unchanged, at 4.5%.
Fed leaves rates unchanged, as expected
“The committee … judges that the risks of higher unemployment and higher inflation have risen.” Powell is facing the worst outcome for a Fed President... The Federal Reserve's dual mandate is to promote two main economic goals: maximum employment and price stability... and uncertainty is on both sides How will President Trump react to this? ECB is cutting rates. PBOC as well as they see a disinflationary shock coming. Meanwhile, the Fed stays put. He is not going to like this...
