When you thought things couldn’t possibly get any weirder… (“Have a nice day, DJT!”)
“Uncertainty” is the word of the year, for an environment dominating by a unique array of uncertainties – policy, market, economic, geopolitical… There are tariff and trade war uncertainties, highlighted by the President’s uniquely whimsical approach. With a third of the 90-day pause period remaining, it’s unclear how many trade deals can be squeezed into such a short negotiations window – and how much hardball the administration is willing to play as the deadline approaches. More specifically, complex trade agreements with the EU and China will require extensive, and likely protracted, talks.
While markets are said to abhor uncertainty, stocks these days seem to eat it up. It’s basically uncertainty on top of uncertainty. The world has never been so awash in speculative finance, ensuring aberrant market behavior. Never has the global leveraged speculating community been as colossal and powerful. Egregious Treasury “basis trade” leveraging drives unprecedented overall hedge fund leverage. Household (loving dip buying) market participation is unparalleled, with the proliferation of online accounts, options trading, and herd-like speculation creating extraordinary market-moving power.
Importantly, the current remarkable backdrop creates a uniquely potent “risk on/risk off” market dynamic. Case in point: From April 25th ‘24 lows to July 10th 24’ highs, the Bloomberg MAG7 Index surged 38%. From July 10th highs to August 5th ’24 lows, MAG7 dropped 22%. Then, from August 5th lows to December 18th highs, the index surged 51%. From December 18th highs to April 7th ’25 lows, MAG7 sank 33%. And from April 7th lows to Friday’s (June 6th) close, the index has rallied 35%.
One upshot is the incredible variability in perceived wealth (and “wealth effects”) for an index with $14.7 TN of market capitalization – a welcome tailwind during “risk on” and unnerving headwinds when “risk off” strikes.
There are also consequential market liquidity impacts. For an index of companies at the epicenter of retail and institutional speculation, MAG7-related margin debt, options, and other related derivatives produce extraordinary liquidity effects (money market fund assets up another $67bn last week!). Rising stock prices stoke self-reinforcing liquidity creation, while sell-offs heighten risks of illiquidity, deleveraging, and market dislocation. Loose conditions certainly reinforce the bullish notion of unlimited “money” available for massive AI investment needs. These days, it’s one extraordinarily fine line between boom and bust.
The Goldman Sachs Short Index surged 10.8% this week, having now rallied 40% off April 7th trading lows. The equities “squeeze” has corresponded with dramatically lower CDS prices, narrower Credit spreads, and sharply reduced risk premiums.
Unique uncertainty and myriad clear and present risks beckon for market risk hedging. But massive hedging and speculating only compound marketplace uncertainty and instability. As we witnessed in April and last August, “risk off” now tends to quickly spiral into deleveraging, illiquidity, and dislocation. Meanwhile, acute Bubble fragilities ensure swift policy responses (i.e., Trump’s tariff pause) that trigger destabilizing unwinds of hedges and bearish bets – along with “buy the dip” FOMO madness. Orderly market adjustment no longer appears possible.
A speculative marketplace of such extremes creates an extraordinarily unstable liquidity backdrop. Risk embracement (with leverage and derivatives) promotes liquidity excess, while bouts of risk aversion trigger deleveraging and resulting tighter financial conditions. Loose financial conditions underpin economy activity, while “risk off” comes with a destabilizing tightening of corporate lending and debt issuance. April’s major tightening saw a temporary halt to high-risk debt issuance (i.e., junk bonds and leveraged loans).
There are today two notably powerful countervailing forces. The “risk on” squeeze dynamic is spurring speculative leveraging and the perception of abundant liquidity. Meanwhile, global bond markets signal waning demand and fledgling liquidity issues. Strong risk market gains, the perception of liquidity abundance, and attendant complacency work to mask mounting risks to Treasury and global bond market (i.e., Japan and UK) stability.
June 4 – Bloomberg (Alice Gledhill and Ruth Carson): “A spate of poorly-received longer-dated sovereign bond auctions worldwide has raised questions about the willingness of investors to fund the spending plans of governments from the US to Japan. Japan’s 30-year bond sale Thursday was the third in as many weeks to show signs of a cold shoulder from buyers, with one measure of demand the weakest since 2023. Attention now turns to US Treasury auctions of 10- and 30-year debt next week, a test of appetite after recent similar issuance from other sovereigns failed to ignite. Tuesday’s auction of 12-year Australian government debt saw the weakest demand in about six years and Wednesday’s post-election South Korean 30-year sale saw the lowest investor appetite since 2022.”
June 5 – Financial Times (Ian Smith): “Auctions of government bonds are usually so routine that they generate little attention. But Japan’s sale of 20-year debt last month was an exception. As financial newswires flashed the dismal results around the world, the prices of the longest dated Japanese sovereign bonds dropped sharply… An auction of US 20-year bonds the following day also attracted a lukewarm response. Close attention to the finer details of government bond auctions and higher yields on longer-dated debt are symptoms of the same thing: wobbling investor appetite for such instruments just at the moment when many finance ministries are planning record levels of issuance, and as the world economy enters a new and uncertain era. For the first time in almost a generation, governments are starting to face resistance from the market when they try to sell long-term debt. ‘It’s a classic supply-and-demand mismatch problem, but on a global scale,’ says Amanda Stitt, a fixed-income specialist at… T Rowe Price. ‘The era of cheap, long-term funding is over, and now governments are jostling in a crowded room of sellers.’”
More from Jamie Dimon…
June 2 – Reuters (Suzanne McGee and Nupur Anand): “JPMorgan… CEO Jamie Dimon said… the rising U.S. national debt is a ‘big deal’ that could create a ‘tough time’ for the bond market that causes spreads to widen, he told Fox Business… ‘If people decide that the U.S. dollar isn’t the place to be, you could see credit spreads gap out; that would be quite a problem… It hurts the people raising money. That includes small businesses, that includes loans to small businesses, includes high yield debt, includes leveraged lending, includes real estate loans. That’s why you should worry about volatility in the bond market.’”
When Citadel is on edge…
June 5 – Reuters (Carolina Mandl and Davide Barbuscia): “Citadel’s… CEO Ken Griffin said… it is ‘unfathomable’ that a financial instrument to protect against an eventual U.S. default is being priced at levels close to some European countries. ‘I never thought in my life I would see the U.S. priced higher in risk cost than a number of countries like Spain, Germany or France,’ he said… ‘You gotta be kidding me.’ Griffin said the credit default swap (CDS) market has some issues with liquidity which impact prices, but still he considered that conversations around how close the swaps are trading are ‘unfathomable’… ‘The United States’ fiscal house is not in order. You cannot run deficits of six or 7% at full employment after years of growth. That’s just fiscally irresponsible,’ he said.”
June 6 – Bloomberg (Katherine Doherty and Bernard Goyder): “Citadel Securities President Jim Esposito said the US deficit and mounting government debt levels are a ‘ticking time bomb,’ adding his voice to the chorus of financial executives soundings warnings about America’s deteriorating fiscal outlook. Esposito… said how President Donald Trump’s administration responds to the situation will be ‘super important.’ ‘I do think the stock of debt and the budget deficit is a ticking time bomb,” Esposito said… at a Piper Sandler conference. ‘No one is smart enough to predict when exactly it will rear its ugly head.’”
When Goldman and BlackRock turn more cautious…
June 5 – Financial Times (Martin Arnold and Brooke Masters): “Goldman Sachs has reined in risk-taking due to market volatility triggered by Donald Trump’s trade war and fears that rising US debt will erode investor appetite for dollar-denominated assets, a senior bank executive has said. John Waldron, president and chief operating officer…, told a Goldman podcast… the investment bank had ‘moderated our risk positioning’ since the US president announced an across-the-board tariff increase on its trading partners on April 2, adding, ‘that’s a sensible thing for us to do’. The reduction in risk-taking by one of the world’s most influential financial institutions underlines how Wall Street traders have been unnerved by the shockwaves that ripped through markets after Trump unleashed his trade war.”
June 5 – Financial Times (Peter Eavis): “BlackRock chief executive Larry Fink said the US was ‘going to hit the wall’ unless the economy grows quickly enough to manage higher deficits from government spending, as a growing chorus of financiers warn about the country’s mounting debt. Fink… characterised the deficit as one of the ‘two most consequential issues’ US politicians are ignoring, as President Donald Trump looks to pass tax cuts that will add $2.4tn to the national debt over the next decade. ‘We have a pending tax bill that’s going to add $2.3tn, $2.4tn on the back of that,’ Fink said, pointing to the $36tn in existing US debt. ‘If we don’t find a way to grow at 3% a year… we’re going to hit the wall.’ ‘If we cannot unlock the growth and if we’re going to continue to stumble along at a 2% economy, the deficits are going to overwhelm this country,’ Fink said…”
Ten-year Treasury yields jumped 12 bps Friday to 4.51%, following stronger-than-expected May non-farm payrolls data. At 4.12%, five-year Treasury yields surged 16 bps this week to 4.12%, within five bps of the highest yield since February.
Until Friday, the Treasury market had for the most part disregarded rallying stocks and loosening conditions. The preponderance of recent data has indicated a weakening of economic momentum. ISM Manufacturing (48.5), factory orders, durable goods orders, vehicle sales, and the ADP employment gain (lowest in two years) were all reported weaker-than-expected. ISM Services in May posted the weakest reading (49.9) since last June, with a notable drop in New Orders.
But Friday’s stronger-than-expected jobs data struck a bond market nerve. Labor markets don’t appear to be weakening sufficiently to restrain elevated wage growth – or to engender Fed concern. Average Hourly Earnings rose 0.4%, with y-o-y gains of 3.9%. This followed Tuesday’s JOLTS data, which had job openings rising almost 200,000 in April to 7.391 million (almost 300k above forecast). While disappointing on job growth (37k), ADP’s report confirmed sticky wage inflation (“stayers” 4.5% y-o-y, “changers” 7.0%). The ISM Services Employment component rose 1.7 points to an expanding (3-month high) 50.7.
Tariff price inflation is looming. Garnering less attention, dollar weakness is also conducive to rising import prices. Meanwhile, inflation fears have been held in check by expectations of a weakening economy. Fragile bond market sentiment has also been underpinned by the view that the full-employment mandate would become the Fed’s primary focus. Such support is in jeopardy.
The rapid return of market wealth effects and significant loosening of financial conditions increase the likelihood of near-term upside economic surprises. What’s more, the administration’s more aggressive approach with apprehensions and deportations has potential to reinforce labor market tightness and wage inflation.
And so much uncertainty with that “one big, beautiful bill”…
June 6 – Bloomberg (Erik Wasson): “Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud. Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk… has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival. ‘The tax bill is not in jeopardy. We are going to deliver on that,’ House Speaker Mike Johnson told reporters… ‘I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,’ he added. ‘He is the leader of the party. He’s the most consequential political figure of our time.’”
“The most consequential political figure” has his hands full.
June 6 – Bloomberg: “In the early hours of Wednesday, Donald Trump declared that Xi Jinping was ‘VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!’ Some 36 hours later, the US leader said he got what he wanted: A commitment to restore the flow of rare earth magnets. It’s less clear what Xi got in return, apart from putting a lid on further punitive US measures… ‘This call provides tactical de-escalation for US-China relations,’ said Sun Chenghao, a fellow at the Center for International Security and Strategy at Tsinghua University in Beijing. ‘However, China’s core demands — equal sanction relief, reciprocal enforcement mechanisms, and an end to tech containment — remain critical for sustainable agreements… Without substantive US adjustments in follow-up talks and policies, the consensus may not translate into long-term stability’.”
At this point, there’s ample confirmation that the Geneva trade agreement and “total reset” were less than advertised. The Chinese have not wavered, and it has become clear that they have executed a thoughtfully crafted strategy to use rare earth minerals and magnets for trade war leverage. President Trump has been fond of claiming that trade wars are “easy to win.” He and his administration taunted the Chinese for having such a weak hand to play. But a country that processes 90% of elements critical for producing automobiles, aircraft, military armaments, high tech components, clean energy, and such – has cards strong enough to make competitors sweat.
June 6 – Reuters (Laurie Chen): “China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths, capped by Thursday’s telephone call between U.S. and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war. Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system. Modelled on the United States’ own, Beijing’s export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles. ‘China originally took inspiration for these export control methods from the comprehensive U.S. sanctions regime,’ said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank…”
June 6 – New York Times (Daisuke Wakabayashi and Berry Wang): “During his phone call with President Trump, Xi Jinping leaned on a maritime analogy to try to salvage the fragile trade truce that seemed to be fracturing from a series of escalating punitive economic measures. The Chinese leader compared the relationship between the United States and China to a large ship, with the two men serving as powerful captains holding the rudder firmly to maintain the proper course. The analogy also came with a warning. Do not let others steer the ship off course and jeopardize the relationship… In a readout from the Chinese government, Mr. Xi emphasized on the 90-minute call that the two leaders needed to ‘steer clear of various disturbances or even sabotage’… Yun Sun, director of the China program at the Stimson Center…, said China saw an opportunity to use ‘top leader diplomacy’ to send this message to Mr. Trump directly: ‘Hold off your hawks. The responsibility is on the top leaders. If you want a good relationship, don’t let your cabinet members or team run freely with their crazy ideas.’”
Thursday’s Trump/Xi call was a positive development. It makes sense that Beijing believed it was time for President Trump to hear China’s perspective directly from the horse’s mouth. Chinese officials have criticized the administration’s “two-faced” approach. So, with President Trump so eager to chum with Xi Jinping, why not use the opportunity to pry some distance between the President and his more hawkish advisors?
“If you want a good relationship, don’t let your cabinet members or team run freely with their crazy ideas.” What if “crazy” radiates from the top? The President and his administration are determined to thwart China’s global superpower ambitions. They’ll continue to approach this objective on multiple fronts (tariffs, export controls, sanctions, military power, etc.). Beijing will view these as unacceptable efforts to contain China’s rising power.
Both sides will see it to their advantage to make marginal concessions in pursuit of domestic priorities. Meanwhile, the U.S. and China will continue to move aggressively to decouple. A pair of Friday headlines: “China Allows Limited Exports of Rare Earths as Shortages Continue.” “China issues rare earth licenses to suppliers of top 3 US automakers, sources say.”
In the case of the three auto manufacturers, the granted export licenses were “temporary.” Beijing will likely use rare earths and magnets to extract concessions on U.S. semiconductor and high-tech export controls. And we’ll wait to see if President Trump plays tough or retreats again. I just have a difficult time envisaging the two nations mending relations. There will be ebbs and flows, but the rival superpowers face years of antipathy and escalating conflict.
Returning to the markets, it’s an interesting juncture for “risk on” and loose financial conditions. Might TACO (“Trump Always Chickens Out”) be more of a market “risk off” phenomenon? An emboldened (resolved to display fortitude) President may welcome testing China’s resolve – of which they have plenty. On the subject of tests, it would not be surprising to see the bond market vigilantes make their presence known as budget reconciliation negotiations reach the final stretch. And the more that surging stocks foster complacency (on inflation, the budget, tariffs, China, trade wars…), the greater the pressure that befalls vulnerable Treasury and global bond markets.
Stocks can celebrate having arrived at the summer doldrums in one piece. But there’s an awful lot that could go wrong.
For the Week:
The S&P500 gained 1.5% (up 2.0% y-t-d), and the Dow rose 1.2% (up 0.5%). The Utilities declined 1.2% (up 6.9%). The Banks jumped 2.5% (up 2.5%), and the Broker/Dealers added 2.1% (up 16.3%). The Transports increased 1.3% (down 6.4%). The S&P 400 Midcaps jumped 1.7% (down 2.2%), and the small cap Russell 2000 surged 3.2% (down 4.4%). The Nasdaq100 advanced 2.0% (up 3.6%). The Semiconductors surged 5.9% (up 1.2%). The Biotechs rose 2.4% (down 0.5%). With bullion rallying $21, the HUI gold index jumped 5.3% (up 52.1%).
Three-month Treasury bill rates ended the week at 4.2325%. Two-year government yields jumped 14 bps to 4.04% (down 21bps y-t-d). Five-year T-note yields surged 16 bps to 4.12% (down 26bps). Ten-year Treasury yields rose 11 bps to 4.51% (down 6bps). Long bond yields increased four bps to 4.97% (up 19bps). Benchmark Fannie Mae MBS yields jumped 10 bps to 5.83% (down 1bp).
Italian 10-year yields increased two bps to 3.50% (down 2bps y-t-d). Greek 10-year yields rose three bps to 3.27% (up 5bps). Spain’s 10-year yields gained six bps to 3.15% (up 9bps). German bund yields jumped eight bps to 2.58% (up 21bps). French yields rose nine bps to 3.25% (up 5bps). The French to German 10-year bond spread widened one to 67 bps. U.K. 10-year gilt yields were unchanged at 4.64% (up 8bps). U.K.’s FTSE equities index added 0.7% (up 8.1% y-t-d).
Japan’s Nikkei 225 Equities Index slipped 0.6% (down 5.4% y-t-d). Japanese 10-year “JGB” yields fell five bps to 1.46% (up 35bps y-t-d). France’s CAC40 increased 0.7% (up 5.7%). The German DAX equities index added 1.3% (up 22.1%). Spain’s IBEX 35 equities index increased 0.7% (up 22.9%). Italy’s FTSE MIB index gained 1.3% (up 18.8%). EM equities were mostly higher. Brazil’s Bovespa index slipped 0.7% (up 13.2%), while Mexico’s Bolsa index added 0.4% (up 17.3%). South Korea’s Kospi surged 4.2% (up 17.2%). India’s Sensex equities index gained 0.9% (up 4.7%). China’s Shanghai Exchange Index increased 1.1% (up 1.0%). Turkey’s Borsa Istanbul National 100 index jumped 5.2% (down 3.5%).
Federal Reserve Credit declined $11.1 billion last week to $6.626 TN. Fed Credit was down $2.263 TN from the June 22, 2022, peak. Over the past 299 weeks, Fed Credit expanded $2.900 TN, or 78%. Fed Credit inflated $3.826 TN, or 136%, over the past 656 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt dropped $9.7 billion last week to a 20-week low of $3.250 TN. “Custody holdings” were down $74 billion y-o-y, or 2.2%.
Total money market fund assets surged $67 billion to $7.16 TN. Money funds were up $946 billion, or 15.6%, y-o-y.
Total Commercial Paper rose another $21 billion to a new 16-year high $1.470 TN. CP has expanded $382 billion y-t-d and $202 billion, or 16.0%, y-o-y.
Freddie Mac 30-year fixed mortgage rates declined four bps 6.85% (down 14bps y-o-y). Fifteen-year rates fell four bps to 5.99% (down 30bps). Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down six bps to 6.96% (down 36bps).
Currency Watch:
For the week, the U.S. Dollar Index was little changed at 99.19 (down 8.6% y-t-d). For the week on the upside, the Brazilian real increased 2.9%, the South Korean won 2.0%, the Mexican peso 1.7%, the South African rand 1.3%, the Norwegian krone 1.0%, the Australian dollar 0.9%, the New Zealand dollar 0.8%, the British pound 0.5%, the euro 0.4%, the Canadian dollar 0.3%, and the Singapore dollar 0.1%. On the downside, the Japanese yen declined 0.6%, and the Swedish krona dipped 0.4%. The Chinese (onshore) renminbi increased 0.09% versus the dollar (up 1.48% y-t-d).
Commodities Watch:
June 3 – Bloomberg: “Central banks have emerged as a driving force behind the record-breaking bull market for gold, and while the true scale of their buying is shrouded in mystery, nobody expects them to stop. Globally, they are accumulating roughly 80 metric tons of gold a month, worth about $8.5 billion at current prices, analysts at Goldman Sachs estimate. Most of the buying is secret, although trade data indicates China accounts for a lot of the purchases… Taken together, central banks and sovereign wealth funds have been mopping up 1,000 tons a year, at least a quarter of annual mined production, according the World Gold Council. In an HSBC survey of 72 central banks in January, more than a third planned to buy more in 2025. None intended to sell.”
June 4 – Financial Times (Najmeh Bozorgmehr): “One morning in a labyrinthine Tehran bazaar, a salesman was pitching a hot investment to shoppers. ‘Your money is dead,’ he said of the country’s beleaguered currency, the rial. ‘Buy gold.’ Local prices for gold in Iran have outpaced a worldwide surge over the past year, as businesses buy the metal to skirt sanctions and ordinary Iranians invest to protect their savings amid the threat of military confrontation with the US and Israel. The price of gold coins in the country has risen more than 80% over the past 12 months in rial terms…”
The Bloomberg Commodities Index rallied 3.3% (up 4.6% y-t-d). Spot Gold recovered 0.6% to $3,310 (up 26.1%). Silver surged 9.1% to $35.9778 (up 24.5%). WTI crude jumped $3.79, or 6.2%, to $64.58 (down 10%). Gasoline rallied 1.9% (up 3%), and Natural Gas jumped 9.8% to $3.784 (up 5%). Copper rose 3.6% (up 20%). Wheat jumped 3.9% (up 1%), while Corn slipped 0.3% (down 4%). Bitcoin gained $1,250, or 1.2%, to $105,250 (up 12.3%).
Market Instability Watch:
June 3 – Wall Street Journal (Spencer Jakab): “‘Is the U.S. Going Broke?’ Featuring an illustrated Uncle Sam with pockets turned inside out, that was the cover story of America’s most influential news magazine…in March 1972. Sounding the alarm about a debt crisis has been great for companies shilling gold coins and fishy financial products but has made smart, sincere people look silly when nothing happened—financial markets’ equivalent of Y2K. So why are several suddenly worried? Because the math is getting daunting with interest on the debt blowing past $1 trillion annually and Washington acting recklessly. Even people who have issued past warnings deserve a second (or third, or fourth) hearing.”
June 4 – Financial Times (Harriet Agnew, Mary McDougall, Harriet Clarfelt, Kate Duguid, Alexandra Heal and Ivan Levingston): “Big institutional investors are shifting away from US markets as Donald Trump’s trade wars and the country’s escalating debt fuel fears about the dominance of American assets in global portfolios. The US president’s erratic trade policy has shaken global markets in recent months… Trump’s landmark tax bill, which is forecast to add $2.4tn to Washington’s debt over the next decade, has also increased pressure on US Treasuries.”
June 5 – Bloomberg (Toru Fujioka): “The US Treasury called on the Bank of Japan to raise interest rates to strengthen the yen, stepping much deeper into policy recommendations for Tokyo than before in its semiannual currency report. ‘BOJ policy tightening should continue to proceed in response to domestic economic fundamentals including growth and inflation, supporting a normalization of the yen’s weakness against the dollar and a much-needed structural rebalancing of bilateral trade,’ the Treasury Department said…”
June 4 – Financial Times (Henry Foy): “Quant group AQR Capital Management is embracing artificial intelligence and machine learning techniques for trading decisions, ending years of reticence from one of the sector’s historic holdouts. The… hedge fund that has $136bn under management, has ‘surrendered more to the machines’ after years of experiments, its co-founder Cliff Asness told the Financial Times. ‘When you turn yourself over to the machine you obviously let data speak more,’ he said. All quantitative hedge funds — including Two Sigma, Man Group’s AHL division and Sir David Harding’s Winton — use computing power and algorithms to filter vast amounts of data and then employ sophisticated models to make investing decisions.”
Global Credit and Financial Bubble Watch:
June 2 – Financial Times (Sujeet Indap and Eric Platt): “Private credit is now so intertwined with big banks and insurers that it could become a ‘locus of contagion’ in the next financial crisis, a group of economists, bankers and US officials has warned. Researchers from Moody’s Analytics, the Securities and Exchange Commission and a former top adviser to the Treasury department found private credit funds have become enmeshed with the banking system, creating ‘new linkages [that] introduce new modes of systemic stress’. ‘Their opaqueness and role in making the financial network more densely interconnected mean they could disproportionately amplify a future [financial] crisis,’ the group said…”
June 2 – Reuters (Matt Tracy): “U.S. life insurers moved nearly $800 billion in reserves to offshore affiliates between 2019 and 2024, as the growth of private credit has transformed the sector and presented several risks along with it, according to… Moody’s… As interest rates fell to near-zero between 2015 and early 2020, public life insurers took multiple approaches to maximize returns and stay competitive with their growing private credit counterparts, Moody’s analysts said… These included partnering and merging with private equity firms, or alternative asset managers… Roughly $75 billion worth of life insurer-private equity M&A deals took place between 2019 and 2024… These included Allstate’s 2021 sale of its life and annuity businesses, known now as Everlake, to entities managed by Blackstone…, and Brookfield Reinsurance’s acquisition of American National in 2022… The trend has led life insurers and alternative asset managers to move billions of dollars from their U.S. businesses into offshore accounts in Bermuda or the Cayman Islands at a record-setting pace.”
June 1 – Bloomberg (Silas Brown, Alexandre Rajbhandari, and Laura Benitez): “Nothing about the old house on Haverford Station Road, just outside of Philadelphia, hints at the new fortunes that have run through it. But in 2024, the business then based in this quaint four-bedroom colonial graded more than 3,000 investments that were all destined for the same place: the fast-growing market in private credit. Each was assigned a credit rating to gauge the risks for investors. What makes this figure more remarkable — and raises concern among financial experts — is that this business, Egan-Jones Ratings Co., did it all with about 20 analysts. How little Egan-Jones became an outsize player in the multitrillion-dollar private credit market is a story for these financial times.”
June 5 – Bloomberg (Olivia Fishlow, Kat Hidalgo, Francesca Veronesi and Ellen Schneider): “Private credit firms are flooding the market with continuation funds, as a lack of mergers and acquisitions, a fundraising drought and US tariff-induced volatility force them to find other ways to return cash to investors. These vehicles are a type of secondary transaction, once reserved for private equity firms that needed to hold on to their investments longer. Managers can roll over an existing portfolio of assets into a new fund with new investors. Existing limited partners can cash out without waiting for loans to be paid off or refinanced.”
June 3 – Bloomberg (Shannon D. Harrington): “While tariff-induced stress has eased across most of corporate credit, warning signs continue to proliferate in one corner: direct loans to middle-market companies. Such issuers are struggling to withstand high interest rates…, according to Fitch… These companies ‘have limited ability to withstand prolonged high base rates and economic pressures due to their smaller scale and lack of diversification,’ Fitch said… Within a portfolio of private middle-market issuers monitored by Fitch, 17% of them as of last month expected their 2024 interest coverage ratio to be at or below 1 times Ebitda… That figure has grown from 7% of issuers during the first quarter of 2024…”
June 5 – Bloomberg (Josyana Joshua): “Funds that invest in US high-grade bonds had their biggest weekly inflow this year as investors rush to lock in attractive yields. Investors injected over $4 billion into investment-grade bond funds for the week ending June 4, according to LSEG Lipper. That’s the most added to short-and intermediate-term notes funds on a weekly basis for the year…”
Trump Administration Watch:
June 3 – Bloomberg (Annmarie Hordern and Jenny Leonard): “Treasury Secretary Scott Bessent said Beijing has a choice on whether or not to be a dependable partner with the rest of the world, reiterating that China needs to shift to a more consumption-led economy to help ease global imbalances. ‘They either want to be a reliable partner to the rest of the world, or they don’t,’ Bessent said… ‘They are in the midst of a large real estate — I won’t be alarmist and say crisis — but a large real estate over-build and the way for them to stabilize their economy is not to export deflation and excess products to the rest of the world… The way to do that is through a level of fiscal stimulus and to stop over-manufacturing, and get on a sound footing for the consumer economy.’”
June 3 – Bloomberg (Alan Wong): “US Secretary of State Marco Rubio praised pro-democracy protesters who were killed in Beijing’s bloody Tiananmen Square crackdown 36 years ago, carrying on Washington’s criticism of China’s human rights record as tariff disputes further test already frayed ties. ‘Today we commemorate the bravery of the Chinese people who were killed as they tried to exercise their fundamental freedoms, as well as those who continue to suffer persecution as they seek accountability and justice for the events of June 4, 1989,’ Rubio said… ‘The CCP actively tries to censor the facts, but the world will never forget,’ he said…”
June 2 – Financial Times (Guy Chazan): “President Donald Trump has said he would insist that Iran completely dismantle its uranium enrichment programme as part of a nuclear deal with the US, appearing to contradict a proposal put forward by his own special envoy… ‘Under our potential Agreement — WE WILL NOT ALLOW ANY ENRICHMENT OF URANIUM!’ Trump wrote on Truth Social on Monday night. His statement is the latest example of the inconsistent messaging that has plagued Washington’s latest talks with Tehran, now in their eighth week.”
June 2 – Financial Times (Amelia Pollard and Antoine Gara): “President Donald Trump’s plans to take public the two finance agencies that buy the majority of mortgages in the US could generate a giant windfall for a handful of hedge funds, including two of the president’s most strident billionaire backers. Trump recently vowed to relist the government’s shares in Fannie Mae and Freddie Mac, federally-backed agencies that purchase the majority of home loans issued in the US and which were taken into conservatorship during the 2008 financial crisis… Hanging in the balance are tens of billions of dollars in potential gains for hedge funds along with the proper functioning of the US mortgage market itself. Trump’s recent comments have invigorated long-running bets made by investors including hedge fund billionaires Bill Ackman and John Paulson.”
June 3 – Bloomberg (Scott Carpenter): “Signs are emerging that the Trump administration may be less willing to give up control of mortgage giants Fannie Mae and Freddie Mac than investors have bargained for… Donald Trump said he’s exploring the sale of new shares in the two companies… — but he also made clear the government will keep a strong oversight role… Federal Housing Finance Agency director William Pulte said the administration is considering a public offering without actually exiting conservatorship, the quasi-government ownership imposed on the two companies since a 2008 bailout. ‘Maybe there’s a way to take these companies public and use these companies for what they are, which are assets for the American people,’ Pulte said…”
June 1 – Financial Times (Myles McCormick): “Treasury secretary Scott Bessent has insisted the US would never default on its debt as he sought to assuage Wall Street concerns over the state of the country’s public finances. ‘The United States of America is never going to default, that is never going to happen… We are on the warning track and we will never hit the wall.’”
May 31 – Politico (Michael Stratford): “The Trump administration is gearing up to deliver a major win to Wall Street banks: Easing rules imposed on megabanks in response to the 2008 financial crisis. Trump-appointed regulators are nearing completion of a proposal that would relax rules on how much of a capital cushion the nation’s largest banks must have to absorb potential losses and remain solvent during periods of economic stress. The plan — being developed jointly by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation — could be released in the coming months…”
June 3 – Wall Street Journal (Scott Patterson and Tarini Parti): “Federal Emergency Management Agency officials are scrapping a hurricane-response plan that its recently appointed leader, David Richardson, had said was close to completion… With hurricane season kicking off this month, Richardson told staff… the agency would be returning to the same guidance for hurricane response as last year. Some were confused how that would be possible, given the agency had already eliminated key programs and sharply cut its workforce.”
May 31 – Wall Street Journal (Chelsey Dulaney and Chao Deng): “The summer vacation season has officially begun. Missing this year: the Canadians, Europeans and other foreign travelers… ‘There used to be thousands of people from Canada. They would give me Canadian dollars and I would change it at the bank,’ said Omar Tallat…, who runs a corn dog stand near Times Square. ‘This year, business is very bad.’ About 1.9 million foreigners arrived at the U.S.’s main airports in the past four weeks, down 6% from the same period last year… Airline bookings data for the summer suggest things won’t be picking up soon. Flight bookings to the U.S. from Europe are down by about 12% through August. San Francisco, Washington, D.C., and Los Angeles are seeing even larger declines…”
June 3 – Bloomberg (Gregory Korte and Erik Wasson): “President Donald Trump asked lawmakers to cut more than $9 billion in funding for the Public Broadcasting Service, National Public Radio and foreign aid from this year’s budget… ‘Now, Congress must act. They have 45 days to codify these massive cuts to woke, wasteful, and weaponized spending via a simple majority vote,’ the White House’s Office of Management and Budget said…”
China Trade War Watch:
June 3 – Bloomberg: “The US and China appear to have different understandings of what was agreed on rare earths at last month’s trade talks in Geneva, according to an expert on critical minerals policy. China’s exports of the materials used in critical technology from fighter jets to smartphones have become a major flashpoint between the world’s top economies, with US officials alleging Beijing hasn’t honored a commitment to resume shipments. A supply shortfall has already affected some American companies. But China has a different interpretation of what was required, and is still subjecting exports to a new approvals process, said Cory Combs, head of critical mineral supply chain research at Trivium China. ‘On the US side, it seems clear now, there was a sense that Beijing would completely remove the requirement of an approval,” Combs said… ‘That was not what Beijing seems to think it agreed to, and it’s also not my reading of the statement.’”
June 2 – Bloomberg: “After the US and China agreed in Geneva to lower tariffs from astronomical heights, tensions are now surging over access to chips and rare earths. And Beijing increasingly appears to have an edge. President Donald Trump on Friday accused China of violating the agreement struck last month… The main sticking point appears to be critical minerals, with US officials complaining Beijing hadn’t sped up exports needed for cutting-edge electronics. The Trump administration has said the decision to reduce tariffs hinged on a Chinese agreement to lift controls on some rare earths. The US is ‘aggressively moving to onshore critical supply chains, including the production of magnets,’ White House Press Secretary Karoline Leavitt said…”
June 2 – New York Times (Daisuke Wakabayashi): “China said… the United States had ‘severely undermined’ the trade truce the two countries reached last month, striking back against President Trump’s accusations that it was violating the terms of their agreement… China’s Ministry of Commerce called Mr. Trump’s attacks on social media last week ‘baseless.’ He had accused Beijing of failing to live up to its end of their trade deal, a 90-day rollback of tariffs and other trade barriers to give the two countries more time to negotiate and prevent an all-out trade war. China’s commerce ministry said it had continued to honor its agreement responsibly and accused the United States of ‘erroneous practices’ by introducing a series of ‘discriminatory restrictive measures.’”
June 5 – Reuters (Laurie Chen and Lewis Jackson): “In a hulking grey building just east of Tiananmen square in Beijing, a small team in China’s Ministry of Commerce is deciding the fate of the global auto industry, one rare earth magnet export permit at a time. China holds a near-monopoly on rare earth magnets… and it added them to an export control list in April as part of its trade war with the United States, forcing all exporters to apply to Beijing for licenses. It falls to the Bureau of Industrial Security and Import and Export Control… to review export permits for the rare earth magnets, which are vital for car motors, wind turbines and even U.S. F-35 fighter jets. While dozens of licences have been issued since late April, executives, lobbyists and diplomats say they are only a small fraction of the applications that have flooded in from automakers, semiconductor companies and aerospace firms around the world…”
June 4 – Reuters (Lewis Jackson and Hyunjoo Jin): “China has introduced a tracking system for its rare earth magnet sector, three sources said, as its export restrictions on them begin to cut off customers around the world. The national tracking system, which went into effect last week, requires producers to submit extra information online including trading volumes and client names… The world’s largest rare earth magnet supplier and exporter, China in early April imposed export restrictions on seven medium to heavy rare earth elements and several magnets, requiring exporters to obtain licences. Delays getting approvals have upended supply chains for automakers, semiconductor companies and others, with global automakers already beginning to stop some production lines as reserves run out.”
June 4 – Wall Street Journal (Sean McLain and Ryan Felton): “Four major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks. Several traditional and electric-vehicle makers—and their suppliers—are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns… Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work… ‘If you want to export a magnet [from China] they won’t let you do that. If you can demonstrate that the magnet is in a motor in China, you can do that,’ said a supply-chain manager at one of the carmakers.”
June 4 – Reuters (Victoria Waldersee and Christoph Steitz): “Some European auto parts plants have suspended output and Mercedes-Benz is considering ways to protect against shortages of rare earths, as concerns about the damage from China’s restrictions on critical mineral exports deepen across the globe. China’s decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world… China produces around 90% of the world’s rare earths, and auto industry representatives have warned of increasing threats to production due to their dependency on it for those parts. ‘It just puts stress on a system that’s highly organised with parts being ordered many weeks in advance,’ said Sherry House, Ford’s finance chief…”
June 5 – Bloomberg (Mackenzie Hawkins and Jenny Leonard): “The Trump administration plans to broaden restrictions on China’s tech sector with new regulations to capture subsidiaries of companies under US curbs. Officials are drafting a rule that would impose US government licensing requirements on transactions with companies that are majority-owned by already-sanctioned firms, according to people familiar…”
June 5 – Bloomberg Alicia Diaz, Catherine Lucey and Debby Wu): “Commerce Secretary Howard Lutnick called for stepped up enforcement of US export controls to prevent China from stealing critical American technologies that could support Beijing’s ambitions in areas like artificial intelligence and aviation. ‘They are trying to copy our technology,’ Lutnick said… during a House Appropriations subcommittee hearing… ‘In the race for AI supremacy, they are behind us, but they are working with the central government to get us, right, to beat us so that they will have intellectual superiority over us.’”
May 30 – Wall Street Journal (Christopher Mims): “The U.S. has tried almost everything to win the tech race against China—across areas as varied as AI, energy, autonomous vehicles, drones and EVs. So far, none of it has worked. China’s EVs are cheaper and by many measures better than America’s. The country dominates in consumer drones. Autonomous vehicles have rolled out on the streets of Wuhan and Beijing at a pace that Waymo and Tesla have yet to match. China produces the lion’s share of the world’s solar panels and batteries. And while the U.S. and its allies maintain a narrow lead in advanced microchips and AI, the gap appears to be closing faster than ever.”
Trade War Watch:
June 3 – Financial Times (Sam Fleming): “The global economy is heading into its weakest growth spell since the Covid-19 slump as President Donald Trump’s trade war saps momentum in leading economies including the US, OECD forecasts showed. The organization… slashed its outlook for global output and the majority of the G20 leading economies as it warned that agreements to ease trade barriers would be ‘instrumental’ in reviving investment and avoiding higher prices. Global growth is expected to be 2.9% in 2025 and 2026… US growth will slow particularly sharply, sliding from 2.8% last year to just 1.6% in 2025 and 1.5% in 2026, while a bout of higher inflation will prevent the Federal Reserve from cutting rates this year, the OECD said.”
June 3 – Bloomberg (Josh Wingrove): “President Donald Trump has raised steel and aluminum tariffs to 50% from 25%, following through on a pledge to boost US import taxes to help domestic manufacturers. Trump cast the move… as necessary to protect national security. An order signed on Tuesday said the previous charge had ‘not yet enabled’ domestic industries ‘to develop and maintain the rates of capacity production utilization that are necessary for the industries’ sustained health and for projected national defense needs.’”
June 4 – Bloomberg (Maya Averbuch, Simone Iglesias and Mariana Durao): “The US’s top steel providers are racing to win exemptions from Donald Trump’s steel tariffs. Canada’s Prime Minister Mark Carney, Mexico’s President Claudia Sheinbaum and Brazil’s President Luiz Inacio Lula da Silva have sought to reach a deal with the White House, arguing that they should be treated differently than other countries… The three are responsible for about half of US steel imports… ‘We don’t think it’s just or sustainable,’ Sheinbaum said… ‘We hope to reach an agreement, but if we don’t manage, we will be announcing measures that are necessary to strengthen and protect our jobs.’”
June 4 – Financial Times (Costas Mourselas and Amelia Pollard): “European governments are braced for high-stakes negotiations with US President Donald Trump that will put the continent’s defence, economy and security on the line. Grand designs to build ‘an independent Europe’ are on hold as officials strain to maintain Trump’s support through five weeks of crunch talks over Ukraine, transatlantic trade and the US commitment to Nato. Europe’s negotiators are increasingly concerned the US president will demand concessions in one area in exchange for support in another, forcing the EU to sacrifice its core values or accept a firm break with Washington. ‘All these crises, all at once: it’s the perfect storm,’ said Josep Borrell, the EU’s former chief diplomat… ‘He may try to squeeze us, and could push us in the corner from all three directions.’”
May 30 – Reuters (Makiko Yamazaki and Nathan Layne): “Japan and the U.S… agreed to hold another round of trade talks ahead of the G7 summit next month, Japan’s top tariff negotiator said, stressing that no deal would be without concessions on all Washington’s tariffs, including on autos. Japan’s Economy Minister Ryosei Akazawa met with U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick… ‘We agreed to accelerate the talks and hold another round ahead of the G7 summit in June, where the leaders from Japan and the United States are set to meet,’ Akazawa told Japanese media…”
Budget Watch:
June 2 – Bloomberg (Erik Wasson): “Senate Republicans will examine the potential impact of a so-called ‘revenge’ tax buried in President Donald Trump’s massive fiscal package before passing the measure, Majority Leader John Thune said… ‘There are several things that are in the bill that our folks are working with the House,’ Thune told reporters… The item, in legislation that passed the House as Section 899, would increase rates for individuals and companies from countries whose tax policies the US deems ‘discriminatory’.”
June 4 – Associated Press (Lisa Mascaro): “President Donald Trump’s big bill in Congress would unleash trillions in tax cuts and slash spending, but also spike deficits by $2.4 trillion over the decade and leave some 10.9 million more people without health insurance, raising the political stakes for the GOP’s signature domestic priority… The House passed the bill last month by a single vote, but it’s now slogging through the Senate, where Republicans want a number of significant changes.”
June 4 – Associated Press (Fatima Hussein): “President Donald Trump’s sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall, according to an analysis… by the Congressional Budget Office… Baked into the CBO analysis is a prediction that households would ultimately buy less from the countries hit with added tariffs. The budget office estimates that the tariffs would increase the average annual rate of inflation by 0.4 percentage points in 2025 and 2026. The budget office’s model also assumes that the tariffs, announced through executive action between January and May, will be in place permanently.”
June 4 – Wall Street Journal (Siobhan Hughes and Jasmine Li): “Former White House cost-cutting czar Elon Musk called President Trump’s ‘big, beautiful’ tax-and-spending package a ‘disgusting abomination,’ stepping up his criticism just as the Senate is trying to quickly pass the measure… Musk’s comments are his latest sharp words about the package… Last month, he gave new fuel to GOP critics of the Republicans’ multitrillion-dollar agenda, saying that the current measure failed to reduce the federal deficit. ‘Shame on those who voted for it: you know you did wrong. You know it,’ said Musk… Musk… called the package a ‘massive, outrageous, pork-filled Congressional spending bill.’ He issued a warning on the midterm elections: ‘In November next year, we fire all politicians who betrayed the American people.’”
Constitution Watch:
May 31 – Wall Street Journal (Xavier Martinez): “Finals are wrapping up on U.S. campuses, but international students are struggling with a bigger test: Stay put during the summer break or travel home and risk not getting back. The Trump administration’s growing crackdown on foreign students—threatening schools’ ability to enroll them, revoking or withholding visas, and signaling tougher re-entry—is forcing students to make high-stakes decisions with little information. ‘There’s sort of a feeling of hopelessness about it,’ said Andrii Torchylo, a Ukrainian who is set to graduate from Stanford University and begin a doctorate program next year at the California Institute of Technology.”
Canada Friend and Ally Watch:
May 31 – Financial Times (Ilya Gridneff): “Canada’s steel industry warned of ‘catastrophic’ job losses, factory slowdowns and supply chain disruption after US President Donald Trump doubled tariffs on imports to 50%. Trump’s latest tariff move sparked anger across the border… Canada is the largest supplier of steel and aluminium to the US, accounting for nearly a quarter of US steel imports in 2023 and about half of aluminium imports last year. ‘A 25% tariff is difficult, but a 50% one is catastrophic,’ said Catherine Cobden, president of the Canadian Steel Producers Association.”
New World Order Watch:
June 4 – Bloomberg (Soo-Hyang Choi): “North Korean leader Kim Jong Un reiterated his pledge to unconditionally support Russian President Vladimir Putin… In a meeting with a top security aide to Putin, Sergei Shoigu, in Pyongyang, Kim said North Korea will ‘unconditionally support’ Russia and ‘its foreign policies in all the crucial international political issues’… The two countries agreed to expand their relations ‘into the powerful and comprehensive relations of strategic partnership,’ KCNA said.”
June 1 – Financial Times (David Sheppard, Charles Clover and George Parker): “Prime Minister Sir Keir Starmer has refused to commit to a date to raise UK defence spending to 3% of GDP, even as the government set out plans to build up to 12 new attack submarines as part of its strategic defence review (SDR)… Starmer said the UK needed to rapidly modernise and strengthen its armed forces to deter conflict, arguing the UK ‘cannot ignore the threat Russia poses’. ‘The world has changed and we’re entering a new era of instability… If you want to deter conflict then the best way is to prepare for conflict.’”
U.S./Russia/China/Europe/Iran Watch:
June 4 – Financial Times (Najmeh Bozorgmehr): “Iran’s supreme leader Ayatollah Ali Khamenei has hit back at a US proposal on Tehran’s nuclear programme, describing the Trump administration as ‘rude’ and ‘thoughtless’… Iran’s ultimate decision maker reiterated that the Islamic republic would not stop enriching uranium. ‘The impolite and rude leaders of the US say this [that Iran should not have a nuclear industry],’ Khamenei said… ‘Our response to the loud and reckless nonsense of a thoughtless US administration is clear,’ he said, in comments also aimed at Israel’s more aggressive line on Iran’s nuclear programme. ‘The current US and Zionist leaders should know they cannot do a damn thing about this.’”
May 31 – Financial Times (Najmeh Bozorgmehr and Andrew England): “Iran has increased its stockpile of highly enriched uranium by 50%, according to the UN’s nuclear watchdog… According to a confidential International Atomic Energy Agency report obtained by the Financial Times, as of May 17, Iran possessed 408.6kg of uranium enriched to 60% purity. This marks a sharp rise of 133.8kg since February. Iran remains the only non-nuclear weapons state known to have uranium enriched to such a high degree…”
May 31 – Wall Street Journal (Nancy A. Youssef and Chun Han Wong): “Defense Secretary Pete Hegseth vowed that there would be ‘devastating consequences’ should China seek to ‘conquer’ Taiwan… In what was his most assertive statement to date on Taiwan, Hegseth issued a stark warning that threats to the island from China ‘could be imminent.’ Hegseth said that the U.S.’s goal is ‘to prevent war’ through deterrence with allies. ‘But if deterrence fails, and if called upon by my commander in chief, we are prepared to do what the Department of Defense does best, to fight and win decisively,’ he said. He also said Asia is the Trump administration’s priority region.”
June 1 – Politico (Victor Jack): “China… accused Pentagon chief Pete Hegseth of attempting to ‘sow division’ in Asia, issuing a fierce rebuke after the U.S. defense secretary said Beijing posed an ‘imminent’ threat to the region and was gearing up to invade Taiwan. Hegseth… said Beijing was ‘credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific.’ Any effort to invade Taiwan would ‘result in devastating consequences,’ he added. ‘There’s no reason to sugar coat it — the threat China poses is real, and it could be imminent,’ Hegseth said at the Shangri-La Dialogue security conference in Singapore. Beijing’s foreign ministry said Hegseth had ‘vilified China with defamatory allegations’ in a statement on Sunday. The U.S. ‘should not play with fire’ on Taiwan…”
June 1 – Reuters (Liz Lee and Shi Bu): “China has protested to the United States against ‘vilifying’ remarks made by Defense Secretary Pete Hegseth, the foreign ministry said… China has objected to Hegseth calling it a threat in the Indo-Pacific… ‘Hegseth deliberately ignored the call for peace and development by countries in the region and instead touted the Cold War mentality for bloc confrontation, vilified China with defamatory allegations, and falsely called China a ‘threat’,’ the ministry said… ‘The United States has deployed offensive weaponry in the South China Sea and kept stoking flames and creating tensions in the Asia-Pacific, which are turning the region into a powder keg,’ it added…”
June 5 – Wall Street Journal (Laurence Norman): “Iran has ordered thousands of tons of ballistic-missile ingredients from China…, seeking to rebuild its military prowess as it discusses the future of its nuclear program with the U.S… Iran wants to bolster regional allies and rebuild its arsenal while it pushes deeper into contentious talks with the Trump administration over its nuclear program.”
June 4 – Bloomberg (Twinnie Siu and Bingyan Wang): “Chinese President Xi Jinping met with Belarusian President Alexander Lukashenko in Beijing… Xi calls for the two countries to jointly oppose hegemony and defend international fairness and justice. China willing to work with Belarus to promote the steady and long-term development of bilateral relations.”
Ukraine War Watch:
June 3 – Financial Times (Anastasia Stognei, Fabrice Deprez and Christopher Miller): “Bombers that Russia may never rebuild. A fleet so mauled it may force Moscow to rethink how it raids Ukraine. Deep strikes on Russian soil that expose the price of a long war — even against a weaker foe. As the toll of Ukraine’s weekend drone raid becomes clear from satellite imagery and expert assessments, so does the scale of the operation. Ukraine’s audacity — plotting for 18 months to hide drones in trucks to hit military airfields thousands of kilometres from Kyiv — has largely been matched by the material damage done to Russia’s bomber force… Perhaps most importantly for Kyiv, Ukraine was able to also show… that it is capable of shifting the dynamics on the battlefield…”
June 2 – Reuters: “Senior Russian security official Dmitry Medvedev said… the point of holding peace talks with Ukraine was to ensure a swift and complete Russian victory. ‘The Istanbul talks are not for striking a compromise peace on someone else’s delusional terms but for ensuring our swift victory and the complete destruction of the neo-Nazi regime,’ the hawkish deputy chairman of Russia’s Security Council said… ‘That’s what the Russian Memorandum published yesterday is about.’ Medvedev was referring to a set of Russian demands presented to Ukraine… in Istanbul… They included handing over more territory, becoming a neutral country, accepting limits on the size of the Ukrainian army and holding new parliamentary and presidential elections.”
June 1 – Associated Press: “Explosions caused two bridges to collapse and derailed two trains in western Russia overnight, officials said… The first bridge, in the Bryansk region on the border with Ukraine, collapsed on top of a passenger train on Saturday, causing the casualties… Hours later, officials said a second train derailed when the bridge beneath it collapsed in the nearby Kursk region, which also borders Ukraine.”
June 2 – Associated Press (Mehmet Guzel): “Representatives of Russia and Ukraine met Monday for their second round of direct peace talks in just over two weeks, but aside from agreeing to swap thousands of their dead and seriously wounded troops, they made no progress toward ending the 3-year-old war, officials said.”
Middle East Watch:
May 31 – Financial Times (Charles Clover): “Iran has been seeking to bolster its air defences as the military prepares for the possibility of an Israeli or US strike against Tehran’s nuclear infrastructure if negotiations over its enrichment programme break down. Many of Iran’s most-advanced surface-to-air missiles and radars… were destroyed or damaged by Israeli air strikes in October and April 2024. This… has led to the perception that Iran is at its most vulnerable to air attack in decades. However, experts say many elements of Iran’s air defences remain intact or appear to have been repaired in recent months.”
June 5 – New York Times (Peter Eavis): “The largest commercial shipping companies continue to avoid the Red Sea and Suez Canal, despite a recent cease-fire agreement between the United States and Houthis intended to make the trade lanes safer. The cease-fire… ended a U.S. campaign that involved over 1,100 strikes against the Houthis in Yemen and became a source of embarrassment for the Trump administration… ‘If the intention was to restore freedom of navigation, which is what they stated it was, then the results speak for themselves: The shipping industry has not gone back,’ said Richard Meade, editor in chief of Lloyd’s List, a shipping publication. Ship traffic through the Red Sea is down by around three-fifths since 2023…”
Taiwan Watch:
June 2 – Bloomberg (Cindy Wang): “Taiwan said China escalated military pressure around the region in May, deploying dozens of warships and government vessels daily in what it described as an extreme pressure campaign. China sent an average of 50 to 70 vessels per day across the first island chain — a key strategic arc stretching from Japan through Taiwan and the Philippines — between May 1 and 27, said a senior Taiwanese security official… The official, who spoke at a briefing on Thursday, called it a record high for May…”
Bubble and Mania Watch:
June 1 – Financial Times (Alexandra Heal and Ivan Levingston): “Donald Trump’s trade war has slammed the brakes on a global dealmaking recovery for the private equity industry… The value of deals for buyout funds to purchase companies in the second quarter is on course to fall by 16% from the first three months of 2025, according to… Bain & Company. The figure for April was down 24% on the monthly average for the first quarter. The private equity industry had hoped for a dealmaking boom under the second Trump administration, with a more business-friendly attitude and regulatory easing expected to put an end to a two-year downturn in the sector.”
May 30 – Financial Times (Daniel Rasmussen): “US equity markets have had a banner run in the years since the Covid-19 market panic. Yet despite the S&P 500 surging nearly 95% over the past five years, US private equity firms are struggling to profitably sell the portfolio companies they have accumulated — nearly 12,000, according to research by Cherry Bekaert. At the current exit pace of 1,500 companies a year, it would take nearly eight years to clear the existing inventory. Investors in private equity have seen distributions of capital collapse from the typical 30% of net asset value down to only about 10% of net asset value, according to Bain. And frustrated investors in funds — most notably Yale and Harvard — are turning to the secondary market to sell stakes…”
June 2 – Bloomberg (Anna J Kaiser): “South Florida’s pandemic-fueled real estate boom is showing more signs that it’s running out of gas. In April, contracts to buy homes in the Miami, West Palm Beach and Fort Lauderdale regions slumped from a year earlier, with the biggest declines in a Redfin Corp. analysis of the 50 most populous metro areas. Pending sales in Miami tumbled 23%, while transactions were down nearly 19% in Fort Lauderdale and about 14% in West Palm Beach… ‘South Florida is the epicenter of housing market weakness in the United States,’ said Chen Zhao, the head of economics research for Redfin. ‘The question for the rest of the country is, will this spread? Florida is uniquely bad right now’.”
June 3 – Fortune (Alicia Adamczyk): “Last year was a banner year for the rich—at least for those based in the U.S. Thanks to a favorable interest rate environment and booming domestic stock market, the population of high-net-worth, or HNW, individuals grew significantly in North America in 2024… That’s according to the Capgemini Research Institute’s World Wealth Report 2025… The global population of HNW individuals—those with at least $1 million in investable assets outside of their primary residences—rose by 2.6% last year, while the number of ultra-high-net-worth, UHNW, individuals—those with at least $30 million liquid—grew by 6.2%. In the U.S., the HNW population rose almost triple that amount, by 7.6%, and 562,000 new millionaires were minted in 2024.”
Inflation Watch:
June 4 – Axios (Emily Peck): “Businesses say they’re raising prices on goods unaffected by tariffs, according to surveys and anecdotes released by the Federal Reserve… This could be a sign that price hikes might be more widespread than expected, with concerns that some companies might use tariffs as cover to unnecessarily raise costs. About 110 manufacturers and more than 200 service firms in the New York and New Jersey area were surveyed during the first week of May. That’s before tariffs on China were reduced from 145% to 30%… 90% of manufacturers, and three-quarters of service firms, said they import some goods, and are exposed to higher tariffs. About three-quarters of firms said the were fully or somewhat passing along tariff increases to customers.”
Federal Reserve Watch:
June 3 – Reuters (Michael S. Derby): “The Federal Reserve saw $1 trillion in unrealized losses on its holdings last year, according to… the Federal Reserve Bank of New York. The bank said in its annual report for the System Open Market Account, the Fed’s massive holdings of cash and securities, that the $1.06 trillion unrealized loss in 2024 was ‘modestly higher’ than the $948.4 billion paper loss seen in 2023. The state of unrealized losses last year was due to ‘higher market interest rates across the yield curve’ while partially offset by reduced Fed holdings of bonds.”
June 3 – Bloomberg (Alex Harris): “Total net income from the Federal Reserve’s System Open Market Account could remain negative on an annual basis in 2025 before returning to positive levels as early as next year, according to new projections from the New York Fed. ‘In this exercise, SOMA net income remains negative through most of 2025 because the interest expenses on reserve balances, certain other deposits’ and reverse repurchase agreements ‘are higher than the income earned’…”
June 4 – Financial Times (James Politi): “Donald Trump has called on Jay Powell… to cut US interest rates, as new data showed weak private sector hiring and a contraction in the services sector, raising fears of an economic slowdown… ‘ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!’ Trump wrote, referring to the private sector payroll numbers provided by Automatic Data Processing, a US company.”
June 4 – CNBC (Jeff Cox): “The U.S. economy has contracted over the past six weeks as hiring has slowed and consumers and businesses worried about tariff-related price increases, according to a Federal Reserve report… In its… ‘Beige Book’ summary of conditions, the central bank noted that ‘economic activity has declined slightly since the previous report’… ‘All Districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions,’ the report added. Hiring was ‘little changed’ across most of the Fed’s 12 districts, with seven describing employment as ‘flat’… ‘All Districts described lower labor demand, citing declining hours worked and overtime, hiring pauses, and staff reduction plans. Some Districts reported layoffs in certain sectors, but these layoffs were not pervasive’… On inflation, the report described prices as rising ‘at a moderate pace.’ ‘There were widespread reports of contacts expecting costs and prices to rise at a faster rate going forward. A few Districts described these expected cost increases as strong, significant, or substantial,’ it said. ‘All District reports indicated that higher tariff rates were putting upward pressure on costs and prices.’”
June 2 – Reuters (Ann Saphir): “With the labor market stable, inflation running somewhat above target, and the outlook uncertain, the Federal Reserve is keeping a watchful eye on a broad range of data to judge what response might be needed, Dallas Federal Reserve Bank President Lorie Logan said… ‘Monetary policy is really well positioned for us to wait and be patient and watch the data, knowing that if the risks are to materially change on either side, we’re well positioned to act… Our job is to ensure that a one-time increase in the price level doesn’t become an ongoing persistent problem of inflation.’”
U.S. Economic Bubble Watch:
June 6 – CNBC (Jeff Cox): “Hiring decreased just slightly in May even as consumers and companies braced against tariffs and a potentially slowing economy… Nonfarm payrolls rose 139,000 for the month, above the… estimate for 125,000 and a bit below the downwardly revised 147,000… added in April. The unemployment rate held steady at 4.2%… Worker pay grew more than expected, with average hourly earnings up 0.4% during the month and 3.9% from a year ago, compared with respective forecasts for 0.3% and 3.7%… Nearly half the job growth came from health care, which added 62,000, even higher than its average gain of 44,000 over the past year. Leisure and hospitality contributed 48,000 while social assistance added 16,000. On the downside, government lost 22,000 jobs…”
June 4 – CNBC (Jeff Cox): “Private sector job creation slowed to a near standstill in May, hitting its lowest level in more than two years as signs emerged of a weakening labor market, payrolls processing firm ADP reported… Payrolls increased just 37,000 for the month, below the downwardly revised 60,000 in April… Goods-producing industries lost a net 2,000 positions for the month, with natural resources and mining off 5,000 and manufacturing down 3,000, offset by a gain of 6,000 in construction. On the services side, leisure and hospitality (38,000) and financial activities (20,000) provided some signs of strength. However, declines of 17,000 in professional and business services, 13,000 in education and health services, and 4,000 in trade, transportation and utilities weighed on the total… Regarding wages, annual pay grew at a 4.5% rate for those remaining in their positions and 7% for job changers, both little changed from April and still ‘robust’ levels…”
June 5 – Associated Press (Matt Ott): “Filings for U.S. unemployment benefits rose to their highest level in eight months last week… New applications for jobless benefits rose by 8,000 to 247,000 for the week ending May 31… That’s the most since early October. Analysts had forecast 237,000 new applications… The total number of Americans receiving unemployment benefits for the week of May 24 inched down by 3,000 to 1.9 million.”
May 31 – Wall Street Journal (Paul Kiernan): “The Supreme Court’s decision allowing the Trump administration to revoke temporary protections for half a million migrants brings the U.S. economy closer to labor shortages in industries and regions that rely on foreign workers. The impact will take time to unfold, but could be far-reaching. The potential departure of hundreds of thousands of people from the labor force is creating anxiety for employers and adding a fresh dose of uncertainty for an economy already grappling with the administration’s tariff policies.”
June 4 – Bloomberg (Nina Trentmann): “US business optimism has moved sharply lower, deepening a trend seen in the first quarter and marking a sharp reversal from the buoyant mood among executives after Donald Trump’s reelection as president. Less than a third, or 27%, of executives polled in May by the Association of International Certified Professional Accountants said they were confident about the economic outlook for the 12 months ahead, down from 47% of respondents in the first quarter and 67% in a survey conducted in the fourth quarter… ‘We’re seeing a lot of revised expectations: delayed hiring and investment, pared-back expansion plans, lowered key performance indicators,’ said Tom Hood, executive vice president at the AICPA. ‘The data shows a clear pivot from optimism to caution. Businesses are bracing for volatility, and the uncertainty around tariffs is amplifying that shift.’”
June 3 – Reuters (Manya Saini): “A majority of U.S. business owners are worried about supply chain disruptions from President Donald Trump’s sweeping tariffs, a survey by insurance brokerage Gallagher showed… ‘Our survey showed supply chain disruptions were a concern to business owners, with 90% reporting they are concerned about the impact of tariffs on their businesses,’ Chairman and CEO J. Patrick Gallagher told Reuters. ‘Global supply chains, strained by geopolitical conflicts and extreme weather events, remain vulnerable to disruptions,’ he said… In a survey of 1,000 U.S. business owners, 72% said they are very concerned about cyber attacks over the next 12 months, while 69% cited supply chain disruptions and severe weather as top risks.”
June 2 – Yahoo Finance (Josh Schafer): “Economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009. The Institute for Supply Management’s (ISM) manufacturing PMI registered a reading of 48.5 in May, down from April’s reading of 48.7… The manufacturing sector has been in contraction for most of the past two years.”
June 5 – Reuters (Lucia Mutikani): “The U.S. trade deficit narrowed sharply in April, with imports decreasing by the most on record as the front-running of goods ahead of tariffs ebbed… The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023… Data for March was revised to show the trade deficit having widened to an all-time high of $138.3 billion rather than the previously reported $140.5 billion.”
June 3 – Axios (Avery Lotz): “Republicans see a U.S. in bloom. Democrats see one shadowed in gloom. Polling shows deep divides in public sentiment driven by partisanship in a starkly polarized Trump 2.0 era. By the numbers: Overall, 38% of Americans are satisfied with the way things are going in the country, according to a May 1-18 Gallup poll. That number, which sat at just 20% in January, has climbed — thanks to a massive surge in Republican satisfaction. 79% of Republicans say they’re satisfied, near the record high for the party. In January, that number was just 10%. The outlook for Dems is bleak, with just 4% satisfaction.”
June 2 – New York Times (Julie Creswell): “For some American consumers, ‘buy now, pay later’ loans aren’t just for big-ticket items like televisions and vacations. They’re for groceries, too… Nearly a quarter of consumers using buy now, pay later loans finance groceries, up from 14% a year ago, according to a recent LendingTree survey. And it’s not just groceries; more Americans are using these loans to pay for recurring monthly bills, such as electricity, heat, internet and streaming services like Hulu.”
June 4 – CNBC (Diana Olick): “Mortgage rates fell slightly last week, but that did nothing to spur mortgage demand… Applications for a mortgage to purchase a home fell 4% for the week, but were 18% higher than the same week one year ago. The spring season has been sluggish to say the least, with closed sales still coming in lower than last year… The main driver of increased purchase demand is simply more supply on the market. Given how much more there is, however, the highest level in five years, sales should be even stronger.”
June 1 – Fortune (Jason Ma): “Home-sale prices in 11 of the 50 biggest U.S. metro areas are already falling, according to… Redfin… That’s as listings grow and mortgage rates remain high, while sellers outnumber buyers by record amounts. A key tipping point in the housing market is coming into view as momentum shifts more firmly in favor of buyers over sellers. That could help revive a relatively anemic home-shopping season… ‘But the tide is starting to turn for homebuyers,’ Redfin said… While the median U.S. home-sale price was up 1.9% year over year in the four weeks that ended May 25, prices in 11 of the 50 most populous U.S. metro areas are falling…”
China Watch:
June 5 – Bloomberg: “China’s central bank added 1 trillion yuan ($139bn) of three-month funds into markets on Friday, following a surprise mid-month disclosure for the operation likely aimed at preempting a seasonal cash crunch… The move came after China’s financial system started showing some signs of stress in recent days, with a rise in the borrowing costs of banks’ short-term debt and long-dated government bonds.”
June 1 – Bloomberg: “China’s residential property sales continued to fall on in May… The value of new-home sales from the 100 largest property companies slid 8.6% from a year earlier to 294.6 billion yuan ($40.9bn)… A truce on US tariffs has done little for the world’s second-largest economy as falling prices erode corporate profits and employee incomes. That has led to suppressed demand for housing purchases, just as the effects of a stimulus blitz last September start to wear off. ‘China’s real estate sector hasn’t reached a bottom yet,’ Wang Ying, a managing director at Fitch…, said… ‘The majority of residential inventory sits in smaller cities, meaning an inflection point of the sector would only come from a broad rise of income and wealth.’”
June 3 – Bloomberg: “China’s manufacturing sector had its worst slump since September 2022, according to a private survey, as higher tariffs took a toll on smaller exporters despite a truce in the trade war with the US. The Caixin manufacturing purchasing managers’ index fell to 48.3 in May from 50.4 in the prior month…”
June 4 – Bloomberg (Shawna Kwan and Pearl Liu): “Bankers in Hong Kong are on edge as New World Development Co., one of the city’s top real estate developers, attempts to pull off an HK$87.5 billion ($11.2bn) refinancing deal by the end of the month. Once among the most deep-pocketed property giants in the city, New World has faced mounting liquidity pressure over the past couple of years… Investors are growing increasingly skeptical of the firm’s ability to manage its debt burden, after it reported its first loss in two decades in the 2024 financial year. Confidence was further eroded when New World opted to defer interest payments on some perpetual bonds to postpone its debt obligations.”
Central Bank Watch:
June 2 – Associated Press: “Inflation in the 20 countries that use the euro fell to 1.9% in May from 2.2% in April… Lower energy prices helped bring consumer prices in May to below the ECB’s 2% target for the first time since September.”
June 5 – Financial Times (Olaf Storbeck and Tommy Stubbington): “The European Central Bank has signalled it is nearing the end of its rate-cutting cycle as it lowered borrowing costs by a quarter point to 2%… Following the widely expected cut, ECB president Christine Lagarde said the central bank had ‘nearly concluded’ the latest monetary policy cycle, which has led to rate-setters halving borrowing costs from a peak of 4% since June 2024. The Eurozone would be in a ‘good position to navigate the uncertain conditions’ facing the bloc, she added in an apparent reference to trade tensions between the US and EU.”
Europe Watch:
June 4 – Financial Times (Peter Foster, Andy Bounds, Barbara Moens and Kana Inagaki): “The EU is pressing China to loosen restrictions on exports of rare earths because of an ‘alarming situation’ for the bloc’s car industry, with production lines in danger of grinding to a halt… China’s new licensing system for the materials is slowing deliveries to manufacturers of products ranging from cars to washing machines.”
June 2 – Politico (Wojciech Kosc): “Right-wing candidate Karol Nawrocki narrowly beat centrist Rafał Trzaskowski in Poland’s presidential election runoff, winning 50.89% of the vote to 49.11%, according to the electoral commission… Nawrocki, backed by the nationalist Law and Justice (PiS) party and also by U.S. President Donald Trump’s administration, aims to pull Poland away from the European mainstream in a more populist direction.”
Japan Watch:
June 2 – Reuters (Leika Kihara and Makiko Yamazaki): “Bank of Japan Governor Kazuo Ueda said… the central bank will raise interest rates once it is convinced enough that economic and price growth will re-accelerate after a period of stagnation. Ueda also signaled the central bank will continue to taper its huge bond buying even after an existing plan running through March expires, underscoring its resolve to stay on course for a slow but steady withdrawal of ultra-easy policy.”
June 4 – Reuters (Leika Kihara): “The Bank of Japan is considering slowing the pace of tapering in its bond purchases from next fiscal year onward…, a move that would signal its focus on avoiding big bond market disruptions. The move would come in the wake of heightened volatility in the Japanese government bond (JGB) market, with super-long yields having spiked to record highs last month reflecting investors’ concern over Japan’s worsening public finances.”
June 5 – Financial Times (Leo Lewis): “Within a few minutes of the doors opening, the farm produce co-operative in Atami, a seaside town south-west of Tokyo, had completely sold out of subsidised Japanese rice. ‘This will only last us a couple of weeks,’ said 46-year-old Yujiro Osaki, one of the dozens of people who had queued up for a 3kg bag just a few dollars cheaper than the supermarket price for rice… ‘It’s a ridiculous situation for Japan to be in.’ For millions of consumers struggling with sharply rising food costs after years of stagnant prices, queues and the quest for better deals are now part of buying rice in Japan. Prime Minister Shigeru Ishiba’s government… faces an upper-house election in July that analysts forecast will hinge on public dismay over inflation and the price of rice.”
Emerging Market Watch:
June 1 – Financial Times (Joseph Stiglitz): “The late Pope Francis was right to raise the alarm on the debt and development crisis facing developing countries… Some have claimed that the debt problem in the developing world is dissipating, but in fact the situation in many low- and lower-middle-income countries (LLMICs) has become deeper and more entrenched… Strapped for cash, governments are diverting precious public resources away from education, health, infrastructure and climate adaptation to service debts contracted earlier… Recent data from the UN’s trade and development body Unctad reveals that 54 countries spend over 10% of their tax revenues on interest payments alone. The average interest burden for developing countries, as a share of tax revenues, has almost doubled since 2011. More than 3.3bn people live in countries that now spend more on debt service than on health…”
Leveraged Speculation Watch:
June 2 – Reuters (Nell Mackenzie): “Hedge funds bought global equities last week at the quickest pace since November 2024, Goldman Sachs said…, just as stock markets ended the month with their most positive May performance in decades. The S&P 500 advanced just over 6% in May, its biggest monthly rise since November 2023 and its best gains for the month of May since 1990. The Nasdaq rallied about 9.6%… Hedge funds ended the week bullish in every global region, led by North America and Europe, the Goldman Sachs report said.”
June 3 – Reuters (Nell Mackenzie and Summer Zhen): “Hedge funds rose in May on a weaker dollar and by exploiting market dislocations following April’s global trade shock but faced losses in whipsawed commodities and fixed income markets… Hedge funds globally had a monthly return of 3% as of May 29, a JPMorgan prime brokerage note… showed. Industry returns were up 5% for the year so far… Stock-picking hedge funds posted a 3% performance in May, while multi-strategy hedge funds returned 2.5% and quantitative equity funds using systematic strategies returned 4.2%…”
June 2 – Bloomberg (Catherine Bosley and Malavika Kaur Makol): “Emerging market carry trades are taking off again… An index of carry returns — for which a trader borrows in a low-yielding currency and then invests in another offering higher returns, hit a seven-year high in late May. Asset managers have boosted long positions in developing-nation currencies in recent weeks, with those on Mexico’s peso reaching a nine-month high, based on CME Group Inc. data.”
Social, Political, Environmental, Cybersecurity Instability Watch:
June 1 – Bloomberg (Brian K Sullivan, Joe Wertz, and Mary Hui): “In northern China, road surfaces have soared to 158F. In California’s Central Valley, temperatures are reaching into the triple digits Fahrenheit. Across much of Spain, the mercury has risen so high that it’s prompting warnings for tourists. Weeks before the official start of the Northern Hemisphere’s summer, signs are emerging that the coming months will be blistering in North America, Europe and Asia.”
June 2 – Wall Street Journal (Yusuf Khan and Clara Hudson): “Climate startups are feeling the impact of President Trump’s attacks on the energy-transition sector, as funding and job cuts, operational halts and bankruptcies rack up. From carbon capture to solar power, companies across the clean-tech spectrum are reeling from funding withdrawals, policy changes and import restrictions brought in by the Trump administration as it has set about dismantling the climate goals of its predecessor. On Friday, the Energy Department announced $3.7 billion worth of funding cuts for clean-energy and climate projects…”
June 4 – Bloomberg (Brian K Sullivan, Alicia Diaz, and Lauren Rosenthal): “Commerce Secretary Howard Lutnick told a congressional committee that the US National Hurricane Center was fully staffed even though key positions are going unfilled as hurricane season begins. ‘There are no openings on the National Hurricane Center. Zero,’ Lutnick said… ‘We are fully staffed. We are fully ready for hurricane season.’ Yet the center’s website shows at least four meteorologist roles are vacant.”
