REUTERS
"Oil settles higher as hopes of peace in the Middle East dwindle"
By Shariq Khan
May 11, 2026
Summary
* Trump says ceasefire talks are on 'life support'
* US EIA assumes Strait of Hormuz will be shut through late May
* US crude inventories likely to have fallen, poll shows
* Trump meeting with China's Xi in focus
NEW YORK, May 12 (Reuters) - Oil prices settled higher for the third consecutive session on Tuesday as stark differences between the U.S. and Iran over a proposal to end the war in the Middle East raised concerns that supply disruptions upending the global oil market are likely to be prolonged.
Brent crude futures gained $3.56, or 3.42%, to settle at $107.77 a barrel, and U.S. West Texas Intermediate futures closed up $4.11, or 4.19%, at $102.18.
Both benchmarks had climbed nearly 3% on Monday.
U.S. President Donald Trump said on Monday that ceasefire talks with Iran were on "life support," pointing to disagreements over Tehran's demands of a cessation of hostilities on all fronts, the removal of a U.S. naval blockade, the resumption of Iranian oil sales and compensation for war damage.
Iran also emphasised its sovereignty over the Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas normally flows.
"Markets are doubting that a peace deal is within reach," StoneX analyst Alex Hodes said.
EIA: STRAIT MAY BE CLOSED TO LATE MAY
The U.S. Energy Information Administration on Tuesday said it now assumes the strait will be effectively closed through late May, leading to much larger losses of Middle Eastern oil and gas supplies than its prior forecasts.
The agency had earlier expected the waterway would be shut through late April.
Even after flows resume through the Strait of Hormuz, it will take at least until late 2026 or early 2027 for oil output and trade patterns to return to pre-conflict levels, the EIA said.
Disruptions linked to the near-closure of the strait have prompted producers to curtail exports, with a Reuters survey on Monday showing OPEC oil output in April fell to its lowest level in more than two decades.
The EIA estimates 10.5 million barrels per day of output were lost during April across the Middle East due to the strait closure, limiting exports.
Other sources have pegged the supply losses much higher.
J.P. Hanson, global head of oil and gas at Houlihan Lokey, said the conflict has created a 14 million bpd supply gap.
"The market now faces an aggregate billion-barrel deficit, compounded by drained strategic reserves and limited capacity to replace lost volumes," Hanson said in an email.
Saudi Aramco CEO Amin Nasser warned on Monday that disruptions to oil exports through the strait could delay a return to market stability until 2027, with the loss of about 100 million barrels of oil per week.
RISING US EXPORTS, DWINDLING STOCKPILES
Prolonged loss of Middle Eastern supply is forcing countries around the world to burn through their oil and gas stockpiles.
The EIA now expects global oil inventories will fall about 2.6 million bpd this year, much more than its previous forecast of a 300,000 bpd decline.
In the United States, crude stocks were estimated to have dropped by about 2.1 million barrels last week, an extended Reuters poll of analysts showed.
U.S. fuel inventories are also expected to have declined last week, the poll showed.
"Global oil balances continue to tighten daily with the loss of supply easily exceeding the price-induced reduction in demand," oil trading advisor Ritterbusch and Associates said.
"This keeps us in a bullish frame of mind where nearby crude futures appear to possess another $10-12 per barrel on the upside before such lofty pricing forces some significant concessions on the part of the U.S., Iran or both."
Market participants were also keeping a close eye on Trump's planned meeting with Chinese President Xi Jinping on Thursday and Friday after Washington imposed sanctions on three individuals and nine companies for facilitating Iranian oil shipments to China.
Tariffs imposed during the U.S.-China trade war have halted most Chinese imports of U.S. oil and LNG, which were worth $8.4 billion in 2024, the year before Trump began his second term.
Reporting by Shariq Khan and Ahmad Ghaddar; Additional reporting by Anmol Choubey in Bengaluru and Trixie Yap in Singapore; Editing by Rod Nickel, Sanjeev Miglani and Nick Zieminski
https://www.reuters.com/business/energy ... 026-05-12/
THE DAILY NEWS
Re: THE DAILY NEWS
REUTERS
"April CPI rises more than expected; bond yields climb"
By Reuters
May 12, 2026
NEW YORK, May 12 (Reuters) - U.S. consumer prices rose at a brisk clip for a second straight month in April, posting the largest annual increase in inflation in nearly three years and further bolstering expectations the Federal Reserve will keep interest rates unchanged for a while.
The Consumer Price Index increased 0.6% last month after surging 0.9% in March, the Labor Department's Bureau of Labor Statistics said on Tuesday.
Economists polled by Reuters had forecast the CPI rising 0.6%.
In the 12 months through April, the CPI advanced 3.8%.
That was the biggest year-on-year increase since May 2023 and followed a 3.3% rise in March.
Economists had forecast a rise of 3.7%.
Excluding food and energy, the CPI climbed 0.4% last month, partly lifted by a one-time adjustment to rent measures after last year's shutdown of the federal government prevented data collection in October.
MARKET REACTION:
STOCKS: U.S. stock indexes were lower, with the Nasdaq posting a 0.8% decline at the open and the S&P 500 down 0.4%
BONDS: Treasury prices fell, sending yields higher.
The 2-year Treasury yield rose 3 basis points to 3.98%, while the 10-year Treasury yield rose 4 basis points to 4.45%.
FOREX: The dollar index rose 0.3% to 98.29.
COMMENTS:
JAMES MCCANN, SENIOR ECONOMIST, INVESTMENT STRATEGY AT EDWARD JONES, BOSTON:
“American households continue to feel the brunt of surging energy costs, adding to the deluge of inflation they have weathered since the pandemic."
"Moreover, with the Strait of Hormuz still effectively shuttered, the risk that we are not past the peak of these price pressures is rising."
"The good news is that the economy looks resilient to this price shock so far."
"Many consumers have benefited from tax refunds this year, hiring has picked up from near stagnant rates in 2025 and businesses are generating robust profit growth."
"There are limits to these buffers, but we expect they should provide some reassurance that the economy can weather this shock."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
“This report suggests that unless energy prices begin to move much lower from present levels, that inflation is likely to accelerate to even higher heights in the coming months, which is obviously negative for the bond market."
"And certainly, it means that the new Fed chairman will have his hands tied to the point that he's not likely to lower rates anytime this year.
“As long as energy prices continue to stay at these levels and move higher, then the chances of energy inflation spreading to other components of the economy increases."
"And I think that's the greatest fear that we have out there right now."
“So far there hasn't been any really pullback by the consumer, but that's not likely to last if energy prices continue to move higher like this, because don't forget, energy prices affect utilities, right?"
"You'll be paying more for your utility bills, and you'll be paying more for other products that are related to increasing oil prices."
"And so that eventually is going to cut sharply into the consumer's pocketbook."
"And that means the possibility of the economy stalling increases.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
"CPI came in a little hotter than expected, but we should have been expecting the unexpected with tariff induced inflation passing the baton to oil induced inflation."
"With beef, tomato, coffee, and many other line item inflation readings, you can draw a straight line to weather or government policies more than to monetary policy."
MATT BUSH, US ECONOMIST, GUGGENHEIM INVESTMENTS, NEW YORK:
“So far, not a big reaction from markets."
"I think that reflects some mixed trends in the data that overall net out to not much of a changed picture on the inflation front."
“The biggest thing we're seeing is multiple shocks hitting the inflation data and those are all heading in different directions."
"On the goods side, we do seem to see tariff effects fading out of the inflation data."
"Core goods inflation was flat over the month."
"So that's some good news that the tariff pass-through process may be winding down.”
“At the same time, though, we obviously have this new shock from rising energy costs."
"You see that more so in the headline inflation data with gasoline prices surging."
"But you see it in the core inflation data, too."
"Airfares saw a pretty big rise."
"We think more of that is likely to show up in coming months as jet fuel costs are passed into airline prices.”
“And then a third shock hitting the data is spillovers from all the AI spending."
"For example, you saw computer software and accessory prices rise 5% over the month, not annualized."
"That's a pretty big increase."
"It's a bigger deal for the core PCE data, given it has a much larger weight in that series."
"And so, I think that's something that's going to offset some of the slowdown from tariff pressures, particularly in the core PCE inflation data, which the Fed's going to pay more attention to."
“I think this data reinforces the Fed's wait-and-see approach."
"The labor market stabilization means they're in no hurry to reduce rates, and they can focus on the upside risks from inflation.”
TIM URBANOWICZ, CHIEF INVESTMENT STRATEGIST, INNOVATOR ETFS FROM GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK:
“Inflation is likely to take a back seat over the coming months as investors remain focused on earnings, economic growth and the AI-driven capex cycle."
"The Fed has been clear that it is willing to look through any temporary inflation spike tied to the Iran conflict, and that remains the key consideration for investors in the near term."
"Markets had already priced out rate cuts for 2026 heading into the report, and nothing in the data suggests rate hikes are back on the table."
"As long as the 10-year Treasury yield remains contained below 4.5%, we do not see these levels as a meaningful headwind for equities.”
ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK:
"Energy prices exploded because of the whole situation in the Middle East."
"This is the first inflation report where we're seeing consumer prices directly being impacted..."
"How long will oil prices stay high?"
"Is it going to be sticky?"
"Until we see oil prices come down, inflation is here to stay."
"That is a concern for the market and, more importantly, for the Fed."
GEORGE BROWN, SENIOR ECONOMIST AT SCHRODERS, LONDON:
"U.S. inflation is close to peaking, but that does not mean relief is imminent."
"With oil prices still unpredictable, the danger is that a temporary energy shock morphs into something more persistent."
"With rate cuts now unlikely in 2026, the policy debate has shifted to whether the Fed can afford to sit tight or is ultimately pushed into tightening."
"Fed Chair nominee Kevin Warsh may advocate looking through a one-off energy shock, but other parts of the Fed appear less relaxed about the risks."
DOUG BEATH, GLOBAL EQUITY STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE
"It's a little bit higher than the survey."
"It's very early."
"The bond market hasn't reacted too strongly."
"So we'll see how the day goes, but I do think it will be interesting."
"It is above expectations."
"We believe the financial markets and commodities have been a little slow to appreciate the economic damage that is building with higher prices, oil prices, raw materials, all those things that could accelerate global inflation."
"April had the highest S&P 500 returns since 2020."
"Obviously, earnings continue to exceed expectations, AI, all those things."
"But I do think this, even though it's a little bit higher than expected, it could be more important because of the fact the negotiations are still in limbo."
"We'll see how the rest of the day goes by."
"But I think this will be more important going forward."
"The focus on inflation will be an issue, particularly as these US-Iran negotiations continue and we don't have any finalization on this."
Reporting by Lucia Mutikani, Rashika Singh, Karen Brettell, Stephen Culp, Chuck Mikolajczak, Utkarsh Hathi, Akriti Shah, Suzanne McGee, Caroline Valetkevich; editing by Colin Barr
https://www.reuters.com/business/view-a ... 026-05-12/
"April CPI rises more than expected; bond yields climb"
By Reuters
May 12, 2026
NEW YORK, May 12 (Reuters) - U.S. consumer prices rose at a brisk clip for a second straight month in April, posting the largest annual increase in inflation in nearly three years and further bolstering expectations the Federal Reserve will keep interest rates unchanged for a while.
The Consumer Price Index increased 0.6% last month after surging 0.9% in March, the Labor Department's Bureau of Labor Statistics said on Tuesday.
Economists polled by Reuters had forecast the CPI rising 0.6%.
In the 12 months through April, the CPI advanced 3.8%.
That was the biggest year-on-year increase since May 2023 and followed a 3.3% rise in March.
Economists had forecast a rise of 3.7%.
Excluding food and energy, the CPI climbed 0.4% last month, partly lifted by a one-time adjustment to rent measures after last year's shutdown of the federal government prevented data collection in October.
MARKET REACTION:
STOCKS: U.S. stock indexes were lower, with the Nasdaq posting a 0.8% decline at the open and the S&P 500 down 0.4%
BONDS: Treasury prices fell, sending yields higher.
The 2-year Treasury yield rose 3 basis points to 3.98%, while the 10-year Treasury yield rose 4 basis points to 4.45%.
FOREX: The dollar index rose 0.3% to 98.29.
COMMENTS:
JAMES MCCANN, SENIOR ECONOMIST, INVESTMENT STRATEGY AT EDWARD JONES, BOSTON:
“American households continue to feel the brunt of surging energy costs, adding to the deluge of inflation they have weathered since the pandemic."
"Moreover, with the Strait of Hormuz still effectively shuttered, the risk that we are not past the peak of these price pressures is rising."
"The good news is that the economy looks resilient to this price shock so far."
"Many consumers have benefited from tax refunds this year, hiring has picked up from near stagnant rates in 2025 and businesses are generating robust profit growth."
"There are limits to these buffers, but we expect they should provide some reassurance that the economy can weather this shock."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
“This report suggests that unless energy prices begin to move much lower from present levels, that inflation is likely to accelerate to even higher heights in the coming months, which is obviously negative for the bond market."
"And certainly, it means that the new Fed chairman will have his hands tied to the point that he's not likely to lower rates anytime this year.
“As long as energy prices continue to stay at these levels and move higher, then the chances of energy inflation spreading to other components of the economy increases."
"And I think that's the greatest fear that we have out there right now."
“So far there hasn't been any really pullback by the consumer, but that's not likely to last if energy prices continue to move higher like this, because don't forget, energy prices affect utilities, right?"
"You'll be paying more for your utility bills, and you'll be paying more for other products that are related to increasing oil prices."
"And so that eventually is going to cut sharply into the consumer's pocketbook."
"And that means the possibility of the economy stalling increases.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:
"CPI came in a little hotter than expected, but we should have been expecting the unexpected with tariff induced inflation passing the baton to oil induced inflation."
"With beef, tomato, coffee, and many other line item inflation readings, you can draw a straight line to weather or government policies more than to monetary policy."
MATT BUSH, US ECONOMIST, GUGGENHEIM INVESTMENTS, NEW YORK:
“So far, not a big reaction from markets."
"I think that reflects some mixed trends in the data that overall net out to not much of a changed picture on the inflation front."
“The biggest thing we're seeing is multiple shocks hitting the inflation data and those are all heading in different directions."
"On the goods side, we do seem to see tariff effects fading out of the inflation data."
"Core goods inflation was flat over the month."
"So that's some good news that the tariff pass-through process may be winding down.”
“At the same time, though, we obviously have this new shock from rising energy costs."
"You see that more so in the headline inflation data with gasoline prices surging."
"But you see it in the core inflation data, too."
"Airfares saw a pretty big rise."
"We think more of that is likely to show up in coming months as jet fuel costs are passed into airline prices.”
“And then a third shock hitting the data is spillovers from all the AI spending."
"For example, you saw computer software and accessory prices rise 5% over the month, not annualized."
"That's a pretty big increase."
"It's a bigger deal for the core PCE data, given it has a much larger weight in that series."
"And so, I think that's something that's going to offset some of the slowdown from tariff pressures, particularly in the core PCE inflation data, which the Fed's going to pay more attention to."
“I think this data reinforces the Fed's wait-and-see approach."
"The labor market stabilization means they're in no hurry to reduce rates, and they can focus on the upside risks from inflation.”
TIM URBANOWICZ, CHIEF INVESTMENT STRATEGIST, INNOVATOR ETFS FROM GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK:
“Inflation is likely to take a back seat over the coming months as investors remain focused on earnings, economic growth and the AI-driven capex cycle."
"The Fed has been clear that it is willing to look through any temporary inflation spike tied to the Iran conflict, and that remains the key consideration for investors in the near term."
"Markets had already priced out rate cuts for 2026 heading into the report, and nothing in the data suggests rate hikes are back on the table."
"As long as the 10-year Treasury yield remains contained below 4.5%, we do not see these levels as a meaningful headwind for equities.”
ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK:
"Energy prices exploded because of the whole situation in the Middle East."
"This is the first inflation report where we're seeing consumer prices directly being impacted..."
"How long will oil prices stay high?"
"Is it going to be sticky?"
"Until we see oil prices come down, inflation is here to stay."
"That is a concern for the market and, more importantly, for the Fed."
GEORGE BROWN, SENIOR ECONOMIST AT SCHRODERS, LONDON:
"U.S. inflation is close to peaking, but that does not mean relief is imminent."
"With oil prices still unpredictable, the danger is that a temporary energy shock morphs into something more persistent."
"With rate cuts now unlikely in 2026, the policy debate has shifted to whether the Fed can afford to sit tight or is ultimately pushed into tightening."
"Fed Chair nominee Kevin Warsh may advocate looking through a one-off energy shock, but other parts of the Fed appear less relaxed about the risks."
DOUG BEATH, GLOBAL EQUITY STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE
"It's a little bit higher than the survey."
"It's very early."
"The bond market hasn't reacted too strongly."
"So we'll see how the day goes, but I do think it will be interesting."
"It is above expectations."
"We believe the financial markets and commodities have been a little slow to appreciate the economic damage that is building with higher prices, oil prices, raw materials, all those things that could accelerate global inflation."
"April had the highest S&P 500 returns since 2020."
"Obviously, earnings continue to exceed expectations, AI, all those things."
"But I do think this, even though it's a little bit higher than expected, it could be more important because of the fact the negotiations are still in limbo."
"We'll see how the rest of the day goes by."
"But I think this will be more important going forward."
"The focus on inflation will be an issue, particularly as these US-Iran negotiations continue and we don't have any finalization on this."
Reporting by Lucia Mutikani, Rashika Singh, Karen Brettell, Stephen Culp, Chuck Mikolajczak, Utkarsh Hathi, Akriti Shah, Suzanne McGee, Caroline Valetkevich; editing by Colin Barr
https://www.reuters.com/business/view-a ... 026-05-12/
Re: THE DAILY NEWS
REUTERS
"Fed's Goolsbee says latest inflation read was disappointing"
By Ann Saphir
May 12, 2026
May 12 (Reuters) - Chicago Federal Reserve President Austan Goolsbee said on Tuesday that the government's report showing accelerating consumer inflation last month was unexpectedly disappointing.
Inflation is "going the wrong way, and it's going the wrong way not just in oil-related things and not just in tariff-related things," Goolsbee told the Greater Rockford Chamber of Commerce in Rockford, Illinois.
"The numbers today were mostly what was expected, but the unexpectedly disappointing part in my mind was on the services side," he said.
"That's the part that I'm nervous about."
"I want to see that at least stop growing and hopefully start going back down because that can't really be from oil prices."
Here is more context and details:
U.S. consumer inflation rose 3.8% in April from a year earlier, its largest gain in three years, the Bureau of Labor Statistics said Tuesday.
The Fed in April held short-term borrowing costs steady in the 3.5-%-3.75% range.
Goolsbee dissented because he disagreed with language in the Fed's post-meeting statement that he and several of his colleagues felt expressed an unwarranted bias toward rate cuts ahead.
"I want us to be cognizant that the job market is basically stable and inflation is going up," Goolsbee said on Tuesday.
"We're not at this moment in a difficult balancing act between the two sides of the (Fed's) mandate."
"One side of the mandate is going wrong and the other side is not going."
"So in the short run, I want us to be cognizant of that."
Jerome Powell, whose last day as Fed chair is Friday, is a "first ballot Hall of Fame Fed chair," Goolsbee said, for steering the economy clear of a financial crisis during a tenure that spanned the COVID-19 pandemic and several large bank failures.
Also, he said, "in 2023 we had a large drop in the inflation rate without a recession, which basically has never happened before, and it's done in the context that Fed independence has been under fire."
President Donald Trump last year made an unprecedented attempt to fire a sitting Fed governor in a case that is now before the Supreme Court, and he supported a now-closed criminal probe of Powell that a federal judge quashed as mere pretext to get Powell to cut rates or resign.
Kevin Warsh, Trump's pick to succeed Powell, on Tuesday was confirmed to the Fed Board of Governors and cleared a procedural hurdle in the Senate that will allow him to be confirmed as the Fed's next chair as soon as Wednesday.
Reporting by Ann Saphir; Editing by Mark Porter and Nick Zieminski
https://www.reuters.com/markets/us/feds ... 026-05-12/
"Fed's Goolsbee says latest inflation read was disappointing"
By Ann Saphir
May 12, 2026
May 12 (Reuters) - Chicago Federal Reserve President Austan Goolsbee said on Tuesday that the government's report showing accelerating consumer inflation last month was unexpectedly disappointing.
Inflation is "going the wrong way, and it's going the wrong way not just in oil-related things and not just in tariff-related things," Goolsbee told the Greater Rockford Chamber of Commerce in Rockford, Illinois.
"The numbers today were mostly what was expected, but the unexpectedly disappointing part in my mind was on the services side," he said.
"That's the part that I'm nervous about."
"I want to see that at least stop growing and hopefully start going back down because that can't really be from oil prices."
Here is more context and details:
U.S. consumer inflation rose 3.8% in April from a year earlier, its largest gain in three years, the Bureau of Labor Statistics said Tuesday.
The Fed in April held short-term borrowing costs steady in the 3.5-%-3.75% range.
Goolsbee dissented because he disagreed with language in the Fed's post-meeting statement that he and several of his colleagues felt expressed an unwarranted bias toward rate cuts ahead.
"I want us to be cognizant that the job market is basically stable and inflation is going up," Goolsbee said on Tuesday.
"We're not at this moment in a difficult balancing act between the two sides of the (Fed's) mandate."
"One side of the mandate is going wrong and the other side is not going."
"So in the short run, I want us to be cognizant of that."
Jerome Powell, whose last day as Fed chair is Friday, is a "first ballot Hall of Fame Fed chair," Goolsbee said, for steering the economy clear of a financial crisis during a tenure that spanned the COVID-19 pandemic and several large bank failures.
Also, he said, "in 2023 we had a large drop in the inflation rate without a recession, which basically has never happened before, and it's done in the context that Fed independence has been under fire."
President Donald Trump last year made an unprecedented attempt to fire a sitting Fed governor in a case that is now before the Supreme Court, and he supported a now-closed criminal probe of Powell that a federal judge quashed as mere pretext to get Powell to cut rates or resign.
Kevin Warsh, Trump's pick to succeed Powell, on Tuesday was confirmed to the Fed Board of Governors and cleared a procedural hurdle in the Senate that will allow him to be confirmed as the Fed's next chair as soon as Wednesday.
Reporting by Ann Saphir; Editing by Mark Porter and Nick Zieminski
https://www.reuters.com/markets/us/feds ... 026-05-12/
Re: THE DAILY NEWS
REUTERS
"Senate confirms Warsh to Fed Board, with Fed chair vote likely Wednesday"
By Richard Cowan and Ann Saphir
May 12, 2026
May 12 (Reuters) - The U.S. Senate on Tuesday confirmed Kevin Warsh to a 14-year term as Federal Reserve governor, marking an important step toward his succeeding Jerome Powell as the U.S. central bank's next leader.
Here are some details and context:
The vote passed 51-45, with a single Democrat, John Fetterman of Pennsylvania, casting his vote with the Republican majority.
The Senate also approved the start of a 30-hour countdown that allows a vote to approve Warsh for a concurrent four-year term as Fed chair as soon as Wednesday.
Powell's term as chair ends on Friday.
A lawyer, financier and former Fed governor, Warsh is on course to lead the Fed at a time when the central bank's political independence is being tested by pressure from the administration to deliver the interest-rate cuts demanded by President Donald Trump.
Trump's unprecedented efforts to exert control over the Fed include the attempted firing of Fed Governor Lisa Cook in a case now before the Supreme Court and support for a Department of Justice investigation into Powell's management of a building renovation that a federal judge ruled was pretext for pressuring Powell to cut rates or resign.
The DOJ dropped its investigation, but its lead prosecutor in Washington says she could reopen it.
Powell plans to take the unusual step of staying on as governor after his chair term ends, in response to the "series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors."
Warsh says he plans "regime change" at the Fed, including tightening its coordination with the Treasury Department and the Trump administration on non-monetary policies and setting it on course for a smaller balance sheet, which he argues should allow for a lower policy rate.
A surge in oil prices since the start of the Iran war has pushed up inflation and pared investor expectations for an interest-rate cut this year.
Currently financial markets are pricing about a one-in-three chance of a rate hike by December.
The Fed's current target range for short-term borrowing costs is 3.50%-3.75%.
The Fed chair has one of 12 votes on the interest-rate-setting Federal Open Market Committee,and is one of 19 voices at the policy-setting table.
The Fed's next meeting, likely its first chaired by Warsh, is scheduled for June 16-17.
Reporting by Richard Cowan, Writing by Ann Saphir; Editing by Dan Burns and Andrea Ricci
https://www.reuters.com/world/us/senate ... 026-05-12/
"Senate confirms Warsh to Fed Board, with Fed chair vote likely Wednesday"
By Richard Cowan and Ann Saphir
May 12, 2026
May 12 (Reuters) - The U.S. Senate on Tuesday confirmed Kevin Warsh to a 14-year term as Federal Reserve governor, marking an important step toward his succeeding Jerome Powell as the U.S. central bank's next leader.
Here are some details and context:
The vote passed 51-45, with a single Democrat, John Fetterman of Pennsylvania, casting his vote with the Republican majority.
The Senate also approved the start of a 30-hour countdown that allows a vote to approve Warsh for a concurrent four-year term as Fed chair as soon as Wednesday.
Powell's term as chair ends on Friday.
A lawyer, financier and former Fed governor, Warsh is on course to lead the Fed at a time when the central bank's political independence is being tested by pressure from the administration to deliver the interest-rate cuts demanded by President Donald Trump.
Trump's unprecedented efforts to exert control over the Fed include the attempted firing of Fed Governor Lisa Cook in a case now before the Supreme Court and support for a Department of Justice investigation into Powell's management of a building renovation that a federal judge ruled was pretext for pressuring Powell to cut rates or resign.
The DOJ dropped its investigation, but its lead prosecutor in Washington says she could reopen it.
Powell plans to take the unusual step of staying on as governor after his chair term ends, in response to the "series of legal attacks on the Fed which threaten our ability to conduct monetary policy without considering political factors."
Warsh says he plans "regime change" at the Fed, including tightening its coordination with the Treasury Department and the Trump administration on non-monetary policies and setting it on course for a smaller balance sheet, which he argues should allow for a lower policy rate.
A surge in oil prices since the start of the Iran war has pushed up inflation and pared investor expectations for an interest-rate cut this year.
Currently financial markets are pricing about a one-in-three chance of a rate hike by December.
The Fed's current target range for short-term borrowing costs is 3.50%-3.75%.
The Fed chair has one of 12 votes on the interest-rate-setting Federal Open Market Committee,and is one of 19 voices at the policy-setting table.
The Fed's next meeting, likely its first chaired by Warsh, is scheduled for June 16-17.
Reporting by Richard Cowan, Writing by Ann Saphir; Editing by Dan Burns and Andrea Ricci
https://www.reuters.com/world/us/senate ... 026-05-12/
Re: THE DAILY NEWS
REUTERS
"New York Fed finds ongoing student loan woes in first quarter"
By Michael S. Derby
May 12, 2026
Summary
* Report shows total household debt little changed at $18.8 trillion in first quarter
* Trouble in student loan borrowing continues, report says
* New York Fed sees low contagion risk from student loan trouble
NEW YORK, May 12 (Reuters) - Ongoing U.S. student loan troubles do not appear to be on track to create broader woes in the consumer lending space, a New York Federal Reserve report released on Tuesday showed.
The regional Fed bank made the finding in its broad overview of consumer debt trends in the first quarter, which found modest gains in key borrowing types and little change in overall delinquency rates, in a period marked by a stable job market and ongoing economic growth.
Student loan borrowing has over recent quarters been on a troubling path after the government began to compel borrowers to repay loans again after a long break.
The New York Fed noted that the flow of student loans moving into serious trouble moderated during the quarter and the overall level of defaults in that type of borrowing was "relatively low."
Student loan borrowers, however, have "very high delinquency rates across all credit products" and "these high rates suggest that their payment struggles extend beyond student loans - and are likely to worsen when collection efforts resume," according to a blog post accompanying the New York Fed debt report.
Despite those troubles, their usage of overall credit in the U.S. economy is relatively modest, and "spillover from the recent wave of defaults and delinquencies to broader credit markets is likely to be limited," New York Fed economists wrote.
Beyond student loan borrowing, Americans' debt management is "on pretty stable footing overall" amid some signs of "weakness," New York Fed researchers said in a conference call with reporters.
The report said the transmission rate of student loans shifting into serious delinquency stood at 10.9% in the first quarter, compared to a 16.2% rate in the fourth quarter of 2025.
The overall delinquency rate for student loans in the first quarter was 10.3% for loans three months or more in trouble, up from 9.6% at the end of the fourth quarter of 2025.
Some 2.6 million student loan borrowers who were 120 days or more behind on their repayments had their loans referred to the U.S. Department of Education's Default Resolution Group.
The report said total delinquency rates on debt were mostly steady during the first quarter at 4.8%.
HOUSEHOLD DEBT TRENDS STABLE
Overall household debt trends were stable in the first quarter.
It is unclear whether that relative calm will hold as consumers face surging energy prices tied to the war in the Middle East, which has disrupted global supply chains.
Recent New York Fed research said lower-income households are being increasingly stressed by the higher energy costs.
The New York Fed's report showed that overall household debt levels stood at $18.8 trillion in the first quarter, up $18 billion from the final three months of 2025.
Total mortgage balances hit $13.2 trillion, up $21 billion from the prior quarter, while credit card debt fell $25 billion to $1.3 trillion.
Reporting by Michael S. Derby; Editing by Paul Simao
https://www.reuters.com/legal/litigatio ... 026-05-12/
"New York Fed finds ongoing student loan woes in first quarter"
By Michael S. Derby
May 12, 2026
Summary
* Report shows total household debt little changed at $18.8 trillion in first quarter
* Trouble in student loan borrowing continues, report says
* New York Fed sees low contagion risk from student loan trouble
NEW YORK, May 12 (Reuters) - Ongoing U.S. student loan troubles do not appear to be on track to create broader woes in the consumer lending space, a New York Federal Reserve report released on Tuesday showed.
The regional Fed bank made the finding in its broad overview of consumer debt trends in the first quarter, which found modest gains in key borrowing types and little change in overall delinquency rates, in a period marked by a stable job market and ongoing economic growth.
Student loan borrowing has over recent quarters been on a troubling path after the government began to compel borrowers to repay loans again after a long break.
The New York Fed noted that the flow of student loans moving into serious trouble moderated during the quarter and the overall level of defaults in that type of borrowing was "relatively low."
Student loan borrowers, however, have "very high delinquency rates across all credit products" and "these high rates suggest that their payment struggles extend beyond student loans - and are likely to worsen when collection efforts resume," according to a blog post accompanying the New York Fed debt report.
Despite those troubles, their usage of overall credit in the U.S. economy is relatively modest, and "spillover from the recent wave of defaults and delinquencies to broader credit markets is likely to be limited," New York Fed economists wrote.
Beyond student loan borrowing, Americans' debt management is "on pretty stable footing overall" amid some signs of "weakness," New York Fed researchers said in a conference call with reporters.
The report said the transmission rate of student loans shifting into serious delinquency stood at 10.9% in the first quarter, compared to a 16.2% rate in the fourth quarter of 2025.
The overall delinquency rate for student loans in the first quarter was 10.3% for loans three months or more in trouble, up from 9.6% at the end of the fourth quarter of 2025.
Some 2.6 million student loan borrowers who were 120 days or more behind on their repayments had their loans referred to the U.S. Department of Education's Default Resolution Group.
The report said total delinquency rates on debt were mostly steady during the first quarter at 4.8%.
HOUSEHOLD DEBT TRENDS STABLE
Overall household debt trends were stable in the first quarter.
It is unclear whether that relative calm will hold as consumers face surging energy prices tied to the war in the Middle East, which has disrupted global supply chains.
Recent New York Fed research said lower-income households are being increasingly stressed by the higher energy costs.
The New York Fed's report showed that overall household debt levels stood at $18.8 trillion in the first quarter, up $18 billion from the final three months of 2025.
Total mortgage balances hit $13.2 trillion, up $21 billion from the prior quarter, while credit card debt fell $25 billion to $1.3 trillion.
Reporting by Michael S. Derby; Editing by Paul Simao
https://www.reuters.com/legal/litigatio ... 026-05-12/
Re: THE DAILY NEWS
RIGZONE
"Oil Retreats After Inventory Data"
by Bloomberg | J. Wittels, A. Longley, M. Gindis
Wednesday, May 13, 2026
Oil slipped in volatile trading as traders awaited a pivotal meeting between US President Donald Trump and Chinese counterpart Xi Jinping, while fresh US data suggested stockpiles have yet to drop to critical levels.
West Texas Intermediate fell 1.1% to settle at $101.02 a barrel, snapping a three-session winning streak.
Trump downplayed the amount of attention the Iran conflict would get during his summit Thursday with Xi, saying he would prioritize trade negotiations and that "we have Iran very much under control."
China buys most of the Islamic Republic's oil exports.
Prices eased earlier after a US government report showed that distillate inventories grew last week for the first time since March.
Though the build was relatively small at 190,000 barrels, it allayed fears that the West's supply cushion is reaching its limits.
Crude stockpiles slid by 4.3 million barrels, however, nearly twice the figure projected by a widely followed industry group.
The EIA data contributed to the slide, but mostly "traders aren't really looking to add risk in either direction ahead of the Xi-Trump meeting," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
"There's also some hesitation to chase the rally above $100, where shifting rhetoric has consistently introduced volatility and given traders pause."
The Middle East conflict has thrown energy markets into disarray, with refineries in Asian nations such as Japan scrambling for alternatives to supplies from the Persian Gulf.
The Strait of Hormuz, which links the Gulf to open seas, has been effectively closed by Iran since the US and Israel launched the war in late February.
A US naval blockade of Iranian ports adds another layer of disruption.
Even as prices slipped on Wednesday, the broader outlook remained bullish.
The International Energy Agency said global observed oil inventories declined at a rate of about 4 million barrels a day in March and April.
Saudi Arabia told OPEC that its output sank to the lowest level since 1990.
"With global oil inventories already drawing at a record clip, further price volatility appears likely ahead of the peak summer demand period," the Paris-based IEA said in its Oil Market Report.
The market will remain "severely undersupplied" until October even if the conflict ends next month, the agency said.
The Iran war has sapped Trump's domestic political standing, with recent economic data indicating hotter inflation tied to energy costs.
American gasoline prices have surged to the highest since 2022, a politically sensitive development for Trump and his Republican Party ahead of crucial midterm elections in November.
Meanwhile, oil shipments from Iran's main export terminal appear to have come to a standstill over the past several days, in the first sign of a prolonged halt since the start of the war.
The country accused Kuwait of trying to "sow discord" after it attacked an Iranian boat and detained four Iranian citizens.
In another sign of wider strain, Vietnam's state oil company has urged the US to let a supertanker laden with crude pass through its naval blockade outside the Persian Gulf, saying the shipment is vital to its economy.
The vessel crossed Hormuz but U-turned on Monday near the cordon.
Oil Prices
WTI for June delivery fell 1.1% to settle at $101.02 a barrel in New York.
Brent for July edged 2% lower to settle at $105.63 a barrel.
https://www.rigzone.com/news/wire/oil_r ... 4-article/
"Oil Retreats After Inventory Data"
by Bloomberg | J. Wittels, A. Longley, M. Gindis
Wednesday, May 13, 2026
Oil slipped in volatile trading as traders awaited a pivotal meeting between US President Donald Trump and Chinese counterpart Xi Jinping, while fresh US data suggested stockpiles have yet to drop to critical levels.
West Texas Intermediate fell 1.1% to settle at $101.02 a barrel, snapping a three-session winning streak.
Trump downplayed the amount of attention the Iran conflict would get during his summit Thursday with Xi, saying he would prioritize trade negotiations and that "we have Iran very much under control."
China buys most of the Islamic Republic's oil exports.
Prices eased earlier after a US government report showed that distillate inventories grew last week for the first time since March.
Though the build was relatively small at 190,000 barrels, it allayed fears that the West's supply cushion is reaching its limits.
Crude stockpiles slid by 4.3 million barrels, however, nearly twice the figure projected by a widely followed industry group.
The EIA data contributed to the slide, but mostly "traders aren't really looking to add risk in either direction ahead of the Xi-Trump meeting," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
"There's also some hesitation to chase the rally above $100, where shifting rhetoric has consistently introduced volatility and given traders pause."
The Middle East conflict has thrown energy markets into disarray, with refineries in Asian nations such as Japan scrambling for alternatives to supplies from the Persian Gulf.
The Strait of Hormuz, which links the Gulf to open seas, has been effectively closed by Iran since the US and Israel launched the war in late February.
A US naval blockade of Iranian ports adds another layer of disruption.
Even as prices slipped on Wednesday, the broader outlook remained bullish.
The International Energy Agency said global observed oil inventories declined at a rate of about 4 million barrels a day in March and April.
Saudi Arabia told OPEC that its output sank to the lowest level since 1990.
"With global oil inventories already drawing at a record clip, further price volatility appears likely ahead of the peak summer demand period," the Paris-based IEA said in its Oil Market Report.
The market will remain "severely undersupplied" until October even if the conflict ends next month, the agency said.
The Iran war has sapped Trump's domestic political standing, with recent economic data indicating hotter inflation tied to energy costs.
American gasoline prices have surged to the highest since 2022, a politically sensitive development for Trump and his Republican Party ahead of crucial midterm elections in November.
Meanwhile, oil shipments from Iran's main export terminal appear to have come to a standstill over the past several days, in the first sign of a prolonged halt since the start of the war.
The country accused Kuwait of trying to "sow discord" after it attacked an Iranian boat and detained four Iranian citizens.
In another sign of wider strain, Vietnam's state oil company has urged the US to let a supertanker laden with crude pass through its naval blockade outside the Persian Gulf, saying the shipment is vital to its economy.
The vessel crossed Hormuz but U-turned on Monday near the cordon.
Oil Prices
WTI for June delivery fell 1.1% to settle at $101.02 a barrel in New York.
Brent for July edged 2% lower to settle at $105.63 a barrel.
https://www.rigzone.com/news/wire/oil_r ... 4-article/
Re: THE DAILY NEWS
CNBC
"10-year Treasury yield hits new high for the year after very hot producer prices reading"
Yun Li @YunLi626 Sean Conlon @SeanAustin96 Joseph Wilkins
Published Wed, May 13 2026
The 10-year U.S. Treasury note yield moved higher on Wednesday as investors digested the implications of hotter-than-expected wholesale prices in April.
The yield on the 10-year note — the key benchmark for U.S. government borrowing — was last up less than 1 basis point at 4.473%.
It had risen as much as 3 basis points to hit a high of 4.49%, reaching its highest level since July 17.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was more than 1 basis point lower at 3.981%.
The longer-dated 30-year Treasury bond yield was up more than 1 basis point at 5.042%.
It had earlier advanced 2 basis points to 5.05%, its highest level since July 17.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The producer price index rose a seasonally adjusted 1.4% for the month, much higher than the 0.5% Dow Jones consensus forecast and the upwardly revised 0.7% March increase.
This was the largest monthly gain since March 2022.
On an annual basis, the index was up 6%, the biggest increase since December 2022.
“Wednesday’s PPI was strikingly elevated as producers are feeling the ripple effects of $100 per barrel oil, which is raising the cost of production across the board, as energy is arguably the most critical input cost,” said Clark Bellin, president and CIO of Bellwether Wealth.
The Bureau of Labor Statistics reported Tuesday that non-seasonally adjusted consumer prices rose at an annual rate of 3.8% in April — the highest since May 2023.
That was more than the 3.7% year-over-year inflation expected by economists polled by Dow Jones.
Annual core inflation, excluding food and energy, rose by 2.8%, also above the 2.7% anticipated by economists.
By either measure, inflation is running far hotter than the central bank’s stated goal of 2%, which the Fed seeks in order to meet its objective of ensuring stable prices in the economy.
The hot inflation readings could complicate the Federal Reserve’s path forward.
“The Federal Reserve has an inflation problem on its hands at a time when the labor market has slowed down, and that makes its job much more difficult, especially as the central bank is set to welcome a new Chair in the very near-term,” Bellin said.
— CNBC’s Lisa Kailai Han also contributed to this report.
https://www.cnbc.com/2026/05/13/treasur ... -data.html
"10-year Treasury yield hits new high for the year after very hot producer prices reading"
Yun Li @YunLi626 Sean Conlon @SeanAustin96 Joseph Wilkins
Published Wed, May 13 2026
The 10-year U.S. Treasury note yield moved higher on Wednesday as investors digested the implications of hotter-than-expected wholesale prices in April.
The yield on the 10-year note — the key benchmark for U.S. government borrowing — was last up less than 1 basis point at 4.473%.
It had risen as much as 3 basis points to hit a high of 4.49%, reaching its highest level since July 17.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was more than 1 basis point lower at 3.981%.
The longer-dated 30-year Treasury bond yield was up more than 1 basis point at 5.042%.
It had earlier advanced 2 basis points to 5.05%, its highest level since July 17.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The producer price index rose a seasonally adjusted 1.4% for the month, much higher than the 0.5% Dow Jones consensus forecast and the upwardly revised 0.7% March increase.
This was the largest monthly gain since March 2022.
On an annual basis, the index was up 6%, the biggest increase since December 2022.
“Wednesday’s PPI was strikingly elevated as producers are feeling the ripple effects of $100 per barrel oil, which is raising the cost of production across the board, as energy is arguably the most critical input cost,” said Clark Bellin, president and CIO of Bellwether Wealth.
The Bureau of Labor Statistics reported Tuesday that non-seasonally adjusted consumer prices rose at an annual rate of 3.8% in April — the highest since May 2023.
That was more than the 3.7% year-over-year inflation expected by economists polled by Dow Jones.
Annual core inflation, excluding food and energy, rose by 2.8%, also above the 2.7% anticipated by economists.
By either measure, inflation is running far hotter than the central bank’s stated goal of 2%, which the Fed seeks in order to meet its objective of ensuring stable prices in the economy.
The hot inflation readings could complicate the Federal Reserve’s path forward.
“The Federal Reserve has an inflation problem on its hands at a time when the labor market has slowed down, and that makes its job much more difficult, especially as the central bank is set to welcome a new Chair in the very near-term,” Bellin said.
— CNBC’s Lisa Kailai Han also contributed to this report.
https://www.cnbc.com/2026/05/13/treasur ... -data.html
Re: THE DAILY NEWS
REUTERS
"US producer prices surprise with largest increase in four years"
By Lucia Mutikani
May 13, 2026
Summary
* Producer Price Index increases 1.4% in April, largest gain since March 2022
* Increase in producer inflation is across services and goods
* Producer prices rise 6.0% year-on-year, biggest advance since December 2022
WASHINGTON, May 13 (Reuters) - U.S. producer prices posted their biggest increase in four years in April, boosted by soaring costs for goods and services, the latest sign of accelerating inflation amid the war with Iran.
The stronger-than-expected rise in the Producer Price Index reported by the Labor Department on Wednesday presented President Donald Trump with a political headache at home as he arrived in Beijing for meetings with China's leader.
It followed on the heels of news on Tuesday of another solid increase in consumer prices, which resulted in the annual inflation rate advancing at its fastest pace in three years.
Rising inflation, stoked by the U.S.-Israeli war with Iran, is exerting financial pressure on households.
Trump, on his way to China on Tuesday, said "I don't think about Americans' financial situation" in making decisions as he seeks to negotiate an end to the war, adding that preventing Tehran from acquiring a nuclear weapon is his top priority.
Trump downplayed Beijing's potential role in ending the conflict.
The increase in inflation is becoming pervasive, posing a challenge for the Federal Reserve.
Kevin Warsh is set to take over from Chair Jerome Powell when his term ends on Friday.
Economists expect the U.S. central bank to keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.
"The jump in input prices portends further increases for consumer prices in May," said Ben Ayers, senior economist at Nationwide.
"We expect the hawkish wing of the FOMC to advocate for an extended pause in interest rates even with incoming Fed Chair Kevin Warsh likely to prefer to lower rates over time."
The PPI for final demand surged 1.4% last month, the largest rise since March 2022, after an upwardly revised 0.7% advance in March, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI gaining 0.5% after a previously reported 0.5% increase in March.
Producer prices have increased strongly this year, partly driven by higher energy costs, as the war disrupted shipping in the Strait of Hormuz.
The conflict is straining global supply chains, causing shortages of a wide range of goods, including fertilizers, aluminum and consumer products.
In the 12 months through April, the PPI jumped 6.0%.
That was the largest increase since December 2022 and followed a 4.3% rise in March.
Part of the surge in the year-on-year PPI rate reflected last year's low readings dropping out of the calculation.
The Fed tracks the Personal Consumption Expenditures price indexes for its 2% inflation target.
Economists said the surge in year-on-year PPI was consistent with PCE inflation readings in excess of 4% over time.
Stocks on Wall Street were trading lower.
The dollar gained versus a basket of currencies.
U.S. Treasury yields rose.
BROAD INCREASE IN PRICES
A 1.2% increase in services, the most in four years, accounted for nearly 60% of the jump in the monthly PPI.
Services gained 0.2% in March and were up 5.5% in the 12 months through April.
Services were driven by a 2.7% surge in margins received by wholesalers and retailers, indicating that businesses were passing on rising energy costs.
Margins for machinery and equipment wholesaling shot up 3.5%.
Margins for professional and commercial equipment wholesaling increased 3.6%.
Computer hardware, software and supplies retailing margins rose slightly, but were up 10.1% from a year ago amid an artificial intelligence spending boom.
Apparel, jewelry, footwear and accessories retailing margins also rose as did those for health, beauty and optical goods retailing, signs that businesses were still passing on import tariffs to consumers.
Margins for fuels and lubricants retailing surged 26.6%.
The cost of transporting freight by road increased.
Prices for legal services rose as did wholesale airfares, though the pace slowed from March.
"These numbers show ample evidence of both tariff-related passthrough and the energy price shock rippling widely through the economy, suggesting that consumer price inflation may get significantly firmer in the months to come," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
But portfolio management fees fell.
Prices for hotel and motel rooms also dropped.
Healthcare costs rose marginally.
These are some of the measures that go into the calculation of PCE inflation.
Wholesale goods prices increased 2.0% after rising 1.9% in March.
A 7.8% surge in energy prices accounted for more than three-quarters of the broad-based rise in goods prices.
Gasoline prices increased 15.6%, adding to the 19.2% advance in March.
Food prices rebounded 0.2%, with fresh and dry vegetables increasing 13.5%.
Excluding the volatile food and energy components, producer goods prices shot up 0.7% after rising 0.3% for two straight months.
Core goods prices increased 4.6% year-on-year amid solid gains in industrial chemicals, iron and steel scrap, and household furniture.
With the PPI and CPI data in hand, economists estimated core PCE inflation could rise by as much as 0.4% in April after gaining 0.3% in March.
Estimates for the year-on-year increase in the so-called core PCE inflation were as high as 3.4%.
It increased 3.2% in March.
"The energy prices are bleeding through into other prices," said John Ryding, chief economic advisor at Brean Capital.
"The conversation about policy at Warsh's first meeting is going to be a heated one with many participants arguing that a rate hike should be a possible policy action later in the year."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/business/us-pro ... 026-05-13/
"US producer prices surprise with largest increase in four years"
By Lucia Mutikani
May 13, 2026
Summary
* Producer Price Index increases 1.4% in April, largest gain since March 2022
* Increase in producer inflation is across services and goods
* Producer prices rise 6.0% year-on-year, biggest advance since December 2022
WASHINGTON, May 13 (Reuters) - U.S. producer prices posted their biggest increase in four years in April, boosted by soaring costs for goods and services, the latest sign of accelerating inflation amid the war with Iran.
The stronger-than-expected rise in the Producer Price Index reported by the Labor Department on Wednesday presented President Donald Trump with a political headache at home as he arrived in Beijing for meetings with China's leader.
It followed on the heels of news on Tuesday of another solid increase in consumer prices, which resulted in the annual inflation rate advancing at its fastest pace in three years.
Rising inflation, stoked by the U.S.-Israeli war with Iran, is exerting financial pressure on households.
Trump, on his way to China on Tuesday, said "I don't think about Americans' financial situation" in making decisions as he seeks to negotiate an end to the war, adding that preventing Tehran from acquiring a nuclear weapon is his top priority.
Trump downplayed Beijing's potential role in ending the conflict.
The increase in inflation is becoming pervasive, posing a challenge for the Federal Reserve.
Kevin Warsh is set to take over from Chair Jerome Powell when his term ends on Friday.
Economists expect the U.S. central bank to keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.
"The jump in input prices portends further increases for consumer prices in May," said Ben Ayers, senior economist at Nationwide.
"We expect the hawkish wing of the FOMC to advocate for an extended pause in interest rates even with incoming Fed Chair Kevin Warsh likely to prefer to lower rates over time."
The PPI for final demand surged 1.4% last month, the largest rise since March 2022, after an upwardly revised 0.7% advance in March, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI gaining 0.5% after a previously reported 0.5% increase in March.
Producer prices have increased strongly this year, partly driven by higher energy costs, as the war disrupted shipping in the Strait of Hormuz.
The conflict is straining global supply chains, causing shortages of a wide range of goods, including fertilizers, aluminum and consumer products.
In the 12 months through April, the PPI jumped 6.0%.
That was the largest increase since December 2022 and followed a 4.3% rise in March.
Part of the surge in the year-on-year PPI rate reflected last year's low readings dropping out of the calculation.
The Fed tracks the Personal Consumption Expenditures price indexes for its 2% inflation target.
Economists said the surge in year-on-year PPI was consistent with PCE inflation readings in excess of 4% over time.
Stocks on Wall Street were trading lower.
The dollar gained versus a basket of currencies.
U.S. Treasury yields rose.
BROAD INCREASE IN PRICES
A 1.2% increase in services, the most in four years, accounted for nearly 60% of the jump in the monthly PPI.
Services gained 0.2% in March and were up 5.5% in the 12 months through April.
Services were driven by a 2.7% surge in margins received by wholesalers and retailers, indicating that businesses were passing on rising energy costs.
Margins for machinery and equipment wholesaling shot up 3.5%.
Margins for professional and commercial equipment wholesaling increased 3.6%.
Computer hardware, software and supplies retailing margins rose slightly, but were up 10.1% from a year ago amid an artificial intelligence spending boom.
Apparel, jewelry, footwear and accessories retailing margins also rose as did those for health, beauty and optical goods retailing, signs that businesses were still passing on import tariffs to consumers.
Margins for fuels and lubricants retailing surged 26.6%.
The cost of transporting freight by road increased.
Prices for legal services rose as did wholesale airfares, though the pace slowed from March.
"These numbers show ample evidence of both tariff-related passthrough and the energy price shock rippling widely through the economy, suggesting that consumer price inflation may get significantly firmer in the months to come," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
But portfolio management fees fell.
Prices for hotel and motel rooms also dropped.
Healthcare costs rose marginally.
These are some of the measures that go into the calculation of PCE inflation.
Wholesale goods prices increased 2.0% after rising 1.9% in March.
A 7.8% surge in energy prices accounted for more than three-quarters of the broad-based rise in goods prices.
Gasoline prices increased 15.6%, adding to the 19.2% advance in March.
Food prices rebounded 0.2%, with fresh and dry vegetables increasing 13.5%.
Excluding the volatile food and energy components, producer goods prices shot up 0.7% after rising 0.3% for two straight months.
Core goods prices increased 4.6% year-on-year amid solid gains in industrial chemicals, iron and steel scrap, and household furniture.
With the PPI and CPI data in hand, economists estimated core PCE inflation could rise by as much as 0.4% in April after gaining 0.3% in March.
Estimates for the year-on-year increase in the so-called core PCE inflation were as high as 3.4%.
It increased 3.2% in March.
"The energy prices are bleeding through into other prices," said John Ryding, chief economic advisor at Brean Capital.
"The conversation about policy at Warsh's first meeting is going to be a heated one with many participants arguing that a rate hike should be a possible policy action later in the year."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/business/us-pro ... 026-05-13/
Re: THE DAILY NEWS
REUTERS
"S&P 500, Nasdaq boosted by chips to record closing highs"
By Stephen Culp and Ragini Mathur
May 13, 2026
Summary
* Indexes: Dow down 0.14%, S&P 500 up 0.58%, Nasdaq up 1.20%
* U.S. producer prices in April post biggest gain in four years
* Morgan Stanley raises annual S&P target on earnings strength Ford shares post biggest one-day percentage jump in six years
* Utilities, financials lead sector losses
NEW YORK, May 13 (Reuters) - The S&P 500 and the Nasdaq gained ground on Wednesday with a boost from artificial intelligence-related tech shares, which helped markets look past hotter-than-expected inflation data and the growing probability that the Federal Reserve will hold to its restrictive monetary policy for the foreseeable future.
The S&P 500 and the Nasdaq reversed earlier declines to notch fresh record closing highs, as chip stocks rebounded from Tuesday's decline.
Six of the Magnificent Seven group of AI-related megacaps gained between 1.4% and 3.9%.
"In the face of continued hot inflation data, technology remains resilient," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska.
"And after some weakness yesterday, the chip stocks came soaring back today."
A report from the Labor Department showed producer prices jumped by 1.4% last month, the largest monthly increase in four years.
While the surge was largely driven by crude supply disruption due to the closure of the Strait of Hormuz, the report showed soaring oil prices are beginning to seep into other segments of the economy, and suggested that rising inflation is becoming pervasive.
Recent inflation data is dousing any remaining hopes for a near-term rate cut from the Federal Reserve.
In fact, Boston Fed President Susan Collins said on Wednesday that a rate hike could be in the cards if inflation pressures fail to subside.
Kevin Warsh, President Donald Trump's nominee to succeed Fed Chair Jerome Powell, was confirmed by the Senate in a vote along party lines.
"I would just be careful to not overlook the risk of a more prolonged period of inflation and elevated interest rates," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Southfield, Michigan.
He added that the PPI report "reinforces the inflation risk narrative and at least makes the case for a longer pause at the Fed."
TRUMP, MUSK, HUANG AND XI
Trump arrived in Beijing, along with an entourage that included Nvidia Chief Executive Officer Jensen Huang and Elon Musk, ahead of a two-day summit with his Chinese counterpart Xi Jinping.
Topics on the agenda include urging Xi to "open up" to U.S. businesses and maintaining a fragile trade truce.
Trump will also seek to bolster his approval rating, which has been battered by the Iran war and resulting surge in energy prices.
Nvidia and Tesla shares advanced 2.3% and 2.7%, respectively.
The meeting occurs amid China's warnings regarding U.S. arms sales to Taiwan and criticism over proposed legislation that would make it harder for Chinese chipmakers to produce AI semiconductors.
"President Trump took almost a small army with him to meet with the Chinese leaders and President Xi," Detrick said.
"With all the negative news about Iran, he wants to walk away from this meeting in China with potentially some significant deals."
The Dow Jones Industrial Average fell 67.36 points, or 0.14%, to 49,693.20, the S&P 500 gained 43.29 points, or 0.58%, to 7,444.25 and the Nasdaq Composite gained 314.14 points, or 1.20%, to 26,402.34.
Among the 11 major sectors of the S&P 500, communication services and tech enjoyed the largest percentage gains, while utilities were the biggest laggards.
Morgan Stanley raised its annual target for the S&P 500 index to 8,000 from 7,800, saying U.S. stocks have enough room to rally as companies continue to post strong earnings.
Ford surged 13.2%, its biggest one-day percentage jump in six years, after Morgan Stanley called the automaker's energy business and its partnership with Chinese battery giant CATL an "underappreciated" competitive advantage.
Nebius Group jumped 15.7% after the AI cloud firm reported a nearly eightfold rise in quarterly revenue.
EchoStar climbed 3.0% the day after the Federal Communications Commission's approval of the $40 billion sale of wireless spectrum to SpaceX and AT&T.
Cryptocurrency firms Coinbase and Strategy slid 2.8% and 3.5%, respectively, dragged down by weakness in bitcoin and ethereum .
Declining issues outnumbered advancers by a 1.21-to-1 ratio on the NYSE.
There were 433 new highs and 175 new lows on the NYSE.
On the Nasdaq, 2,273 stocks rose and 2,450 fell as declining issues outnumbered advancers by a 1.08-to-1 ratio.
The S&P 500 posted 37 new 52-week highs and 46 new lows while the Nasdaq Composite recorded 119 new highs and 191 new lows.
Volume on U.S. exchanges was 19.03 billion shares, compared with the 18.12 billion average for the full session over the last 20 trading days.
Reporting by Stephen Culp in New York; Additional reporting by Sinead Carew, Ragini Mathur, Shashwat Chauhan and Utkarsh Hathi; Editing by Matthew Lewis
https://www.reuters.com/world/china/sp- ... 026-05-13/
"S&P 500, Nasdaq boosted by chips to record closing highs"
By Stephen Culp and Ragini Mathur
May 13, 2026
Summary
* Indexes: Dow down 0.14%, S&P 500 up 0.58%, Nasdaq up 1.20%
* U.S. producer prices in April post biggest gain in four years
* Morgan Stanley raises annual S&P target on earnings strength Ford shares post biggest one-day percentage jump in six years
* Utilities, financials lead sector losses
NEW YORK, May 13 (Reuters) - The S&P 500 and the Nasdaq gained ground on Wednesday with a boost from artificial intelligence-related tech shares, which helped markets look past hotter-than-expected inflation data and the growing probability that the Federal Reserve will hold to its restrictive monetary policy for the foreseeable future.
The S&P 500 and the Nasdaq reversed earlier declines to notch fresh record closing highs, as chip stocks rebounded from Tuesday's decline.
Six of the Magnificent Seven group of AI-related megacaps gained between 1.4% and 3.9%.
"In the face of continued hot inflation data, technology remains resilient," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska.
"And after some weakness yesterday, the chip stocks came soaring back today."
A report from the Labor Department showed producer prices jumped by 1.4% last month, the largest monthly increase in four years.
While the surge was largely driven by crude supply disruption due to the closure of the Strait of Hormuz, the report showed soaring oil prices are beginning to seep into other segments of the economy, and suggested that rising inflation is becoming pervasive.
Recent inflation data is dousing any remaining hopes for a near-term rate cut from the Federal Reserve.
In fact, Boston Fed President Susan Collins said on Wednesday that a rate hike could be in the cards if inflation pressures fail to subside.
Kevin Warsh, President Donald Trump's nominee to succeed Fed Chair Jerome Powell, was confirmed by the Senate in a vote along party lines.
"I would just be careful to not overlook the risk of a more prolonged period of inflation and elevated interest rates," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Southfield, Michigan.
He added that the PPI report "reinforces the inflation risk narrative and at least makes the case for a longer pause at the Fed."
TRUMP, MUSK, HUANG AND XI
Trump arrived in Beijing, along with an entourage that included Nvidia Chief Executive Officer Jensen Huang and Elon Musk, ahead of a two-day summit with his Chinese counterpart Xi Jinping.
Topics on the agenda include urging Xi to "open up" to U.S. businesses and maintaining a fragile trade truce.
Trump will also seek to bolster his approval rating, which has been battered by the Iran war and resulting surge in energy prices.
Nvidia and Tesla shares advanced 2.3% and 2.7%, respectively.
The meeting occurs amid China's warnings regarding U.S. arms sales to Taiwan and criticism over proposed legislation that would make it harder for Chinese chipmakers to produce AI semiconductors.
"President Trump took almost a small army with him to meet with the Chinese leaders and President Xi," Detrick said.
"With all the negative news about Iran, he wants to walk away from this meeting in China with potentially some significant deals."
The Dow Jones Industrial Average fell 67.36 points, or 0.14%, to 49,693.20, the S&P 500 gained 43.29 points, or 0.58%, to 7,444.25 and the Nasdaq Composite gained 314.14 points, or 1.20%, to 26,402.34.
Among the 11 major sectors of the S&P 500, communication services and tech enjoyed the largest percentage gains, while utilities were the biggest laggards.
Morgan Stanley raised its annual target for the S&P 500 index to 8,000 from 7,800, saying U.S. stocks have enough room to rally as companies continue to post strong earnings.
Ford surged 13.2%, its biggest one-day percentage jump in six years, after Morgan Stanley called the automaker's energy business and its partnership with Chinese battery giant CATL an "underappreciated" competitive advantage.
Nebius Group jumped 15.7% after the AI cloud firm reported a nearly eightfold rise in quarterly revenue.
EchoStar climbed 3.0% the day after the Federal Communications Commission's approval of the $40 billion sale of wireless spectrum to SpaceX and AT&T.
Cryptocurrency firms Coinbase and Strategy slid 2.8% and 3.5%, respectively, dragged down by weakness in bitcoin and ethereum .
Declining issues outnumbered advancers by a 1.21-to-1 ratio on the NYSE.
There were 433 new highs and 175 new lows on the NYSE.
On the Nasdaq, 2,273 stocks rose and 2,450 fell as declining issues outnumbered advancers by a 1.08-to-1 ratio.
The S&P 500 posted 37 new 52-week highs and 46 new lows while the Nasdaq Composite recorded 119 new highs and 191 new lows.
Volume on U.S. exchanges was 19.03 billion shares, compared with the 18.12 billion average for the full session over the last 20 trading days.
Reporting by Stephen Culp in New York; Additional reporting by Sinead Carew, Ragini Mathur, Shashwat Chauhan and Utkarsh Hathi; Editing by Matthew Lewis
https://www.reuters.com/world/china/sp- ... 026-05-13/
Re: THE DAILY NEWS
REUTERS
"Fed is 'dead serious' about getting inflation down, Kashkari says"
By Reuters
May 13, 2026
May 13 (Reuters) - Minneapolis Federal Reserve President Neel Kashkari said on Wednesday that the U.S. labor market looks "a bit better" than it did earlier this year, while the Iran war has worsened inflation that already was running too high, views that underscore his preference for leaving the Fed's door open to possible rate hikes.
"We are dead serious about getting inflation back down," Kashkari said at a St. Paul Area Chamber event in St. Paul, Minnesota.
Kashkari was one of three Fed policymakers who dissented at the Fed's April meeting, advocating for a change to the Fed's post-meeting statement that would reflect openness to rate hikes and not just rate cuts.
He spoke as the U.S. Senate prepared to confirm Kevin Warsh as the Fed's new chair.
President Donald Trump says he expects the Fed to cut rates under Warsh.
"The chair of the Federal Reserve has a lot of influence."
"The chair sets the agenda."
"What are the topics we're going to talk about?"
"What are the types of things that we're going to be considering in this deliberation?" Kashkari said in response to a question about whether Warsh will deliver the rate cuts Trump wants.
"But when it comes down to a vote (on interest rates), the chair is one of 12 voters."
"And so a new chair coming in, whoever the chair is, whatever the environment is, will have to persuade his or her colleagues that this is the best course of action."
Reporting by Ann Saphir; Editing by Nia Williams and Andrea Ricci
https://www.reuters.com/markets/us/feds ... 026-05-13/
"Fed is 'dead serious' about getting inflation down, Kashkari says"
By Reuters
May 13, 2026
May 13 (Reuters) - Minneapolis Federal Reserve President Neel Kashkari said on Wednesday that the U.S. labor market looks "a bit better" than it did earlier this year, while the Iran war has worsened inflation that already was running too high, views that underscore his preference for leaving the Fed's door open to possible rate hikes.
"We are dead serious about getting inflation back down," Kashkari said at a St. Paul Area Chamber event in St. Paul, Minnesota.
Kashkari was one of three Fed policymakers who dissented at the Fed's April meeting, advocating for a change to the Fed's post-meeting statement that would reflect openness to rate hikes and not just rate cuts.
He spoke as the U.S. Senate prepared to confirm Kevin Warsh as the Fed's new chair.
President Donald Trump says he expects the Fed to cut rates under Warsh.
"The chair of the Federal Reserve has a lot of influence."
"The chair sets the agenda."
"What are the topics we're going to talk about?"
"What are the types of things that we're going to be considering in this deliberation?" Kashkari said in response to a question about whether Warsh will deliver the rate cuts Trump wants.
"But when it comes down to a vote (on interest rates), the chair is one of 12 voters."
"And so a new chair coming in, whoever the chair is, whatever the environment is, will have to persuade his or her colleagues that this is the best course of action."
Reporting by Ann Saphir; Editing by Nia Williams and Andrea Ricci
https://www.reuters.com/markets/us/feds ... 026-05-13/