Latest Finance-Economy News
Oil shock tops US financial system risks
The Federal Reserve’s semi‑annual report identifies geopolitical tensions and an oil shock from the Iran war as the two biggest risks to the US financial system. Oil prices have climbed more than 40% since US‑Israel strikes on Iran on February 28, raising concerns about sustained supply disruptions and higher inflation.
IMF warns of high inflation and low growth
New IMF projections suggest the Middle East conflict will likely bring higher inflation and weaker growth even in a best‑case scenario. The fund does not rule out a broader global downturn if the conflict drags on.
Geopolitics dominate US banks’ risk lists
Three‑quarters of survey respondents in the Fed’s report cited geopolitical risks as a major near‑term concern, with worries about AI, private credit and persistent inflation also rising. The Iran conflict is seen as a potential source of prolonged energy market disruptions.
Fed and allies hold rates steady
The US Federal Reserve, the European Central Bank and the UK’s Bank of England all held rates steady in early May, citing uncertainty over the course and duration of the Iran conflict. Central banks warn that a prolonged war would amplify inflation and slow economic growth.
Eurozone PMIs show contraction
Final S&P Global Composite and Services PMI readings for the euro area fell to 48.8 and 47.6 respectively, indicating continued contraction in activity. These figures come amid broader concerns about energy costs and geopolitical spillovers.
Brazil services and composite activity expand
Brazil’s S&P Global Services and Composite PMIs rose to 52.3 and 52.4, signaling expanding private‑sector activity. Earlier readings were below 50, so the pickup suggests some resilience in the domestic economy.
Japan PMIs point to modest expansion
Japan’s final S&P Global Composite and Services PMIs stood at 53.0 and 53.4, indicating ongoing, though modest, growth momentum. These readings contrast with softer data in parts of Europe.
US Treasury announces refunding plans
The US Treasury is set to announce its next refunding at 12:30 PM, outlining borrowing plans that will affect bond‑market liquidity and rates. This follows the Fed’s cautious monetary stance amid elevated geopolitical and inflation risks.
ECB officials speak on policy outlook
ECB policymakers, including Lane and Cipollone, are scheduled for speeches today and on Monday, providing insights on inflation and rate‑path guidance. Their comments will be scrutinized for signals about whether the eurozone can avoid deeper recession.
China’s FX reserves modestly dip
China’s foreign‑exchange reserves stood at about $3.342 trillion, down from around $3.4 trillion previously, reflecting valuation and capital‑flow effects. The level remains substantial, but changes are watched for signs of pressure on the yuan and capital outflows.