RIGZONE
"Crude Steady Following Trump-Xi Summit"
by Bloomberg |Y. Chin, A. Longley, M. Gindis
Thursday, May 14, 2026
Oil steadied following a meeting between US President Donald Trump and Chinese leader Xi Jinping where discussions included the war in Iran and closer oil ties between the two nations.
West Texas Intermediate crude was little changed to settle above $101 a barrel, while Brent closed near $106.
The US said the leaders of the two countries discussed increased oil trade, and that both sides agreed Iran can never have a nuclear weapon.
"As long as the path still appears to be leaning toward diplomacy rather than outright escalation, the market remains focused on the endgame - namely, when flows ultimately resume - even as that timeline continues to slip," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group, referring oil shipments disrupted by the war.
The Trump-Xi summit was held against the backdrop of a Middle East conflict that shows no signs of a resolution.
Iran said on Thursday it's now allowing Chinese ships to transit the Strait of Hormuz.
But in the latest sign of Tehran exercising its control of the crucial waterway, a ship was taken in the Gulf of Oman and is heading to Iranian waters, a UK naval group said without identifying the vessel or its country of registration.
The war has driven global oil inventories down at a record pace, and the market will remain "severely undersupplied" until October even if the conflict ends next month, according to the International Energy Agency.
Flows of crude and fuels through the strait fell by almost 6 million barrels a day in the first quarter after hostilities began in late February, according to the US Energy Information Administration.
Only a trickle of tankers have exited the Persian Gulf during the war.
Prior to the meeting in Beijing on Thursday, which lasted more than two hours, Trump said that "the relationship between China and the USA is going to be better than ever before."
This week, Trump told reporters at the White House that trade talks would be prioritized over discussions about the Middle East conflict.
Still, Xi also cautioned that Taiwan could lead to "clashes" between the superpowers.
In the Persian Gulf, a ceasefire has been in place since early April, despite a series of flareups, but the US and Iran appear to be making little progress toward resolving their differences and agreeing on a peace proposal.
That's kept Hormuz effectively closed, choking off crucial energy supplies to global customers.
Oil Prices
WTI for June delivery rose 15 cents to settle at $101.17 a barrel in New York.
Brent for July settlement was 9 cents higher to settle at $105.72 a barrel.
A sanctions waiver issued by the US that had allowed for the purchase of Russian oil on water is set to expire this weekend, leaving refiners in India - one of the biggest buyers - especially vulnerable.
The South Asian nation has imported bumper volumes so far this month.
Despite signs of physical strain, the market appears relatively stagnant.
WTI's call skew - a premium for bullish options bets - shrank to its smallest since January, while open interest in both major benchmarks hovers near multi-month lows.
Several Gulf coast-linked crude grades have also eased in recent weeks, as the pull on US exports wanes, with buyers drawing on inventories they built up earlier.
"The energy market has entered a period of relative calm, but we argue the recent easing in the market is temporary and renewed periods of angst are just around the corner if there is no resumption of flows imminently," said Ryan McKay, senior commodity strategist at TD Securities.
https://www.rigzone.com/news/wire/crude ... 5-article/
THE DAILY NEWS
Re: THE DAILY NEWS
GOOD BYE AND GOOD RIDDANCE TO RABID MAGA TRUMPER AND HOO-DOO ECONOMICS DOCTOR STEVIE MIRAN WHO WAS PUT ON THE FEDERAL RESERVE BY TRUMP TO PERVERT MONETARY POLICY TO BENEFIT TRUMP AT THE EXPENSE OF THE AMERICAN PEOPLE ...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.
- Reuters 13 April 2026
CNBC
"Fed Governor Miran submits resignation, throws support behind Warsh as new chair"
Jeff Cox @jeff.cox.7528 @JeffCoxCNBCcom
Published Thu, May 14 2026
Key Points
* Fed Governor Stephen Miran officially handed in his resignation letter Thursday, saying he will vacate his spot on the central bank board when or just before new Chair Kevin Warsh takes his seat.
* Miran has advocated for lower rates, voting against the three quarter-percentage-point reductions the FOMC approved in 2025. This year, he voted against the three decisions to hold rates steady.
Federal Reserve Governor Stephen Miran officially handed in his resignation letter Thursday, saying he will vacate his spot on the central bank board when or just before new Chair Kevin Warsh takes his seat.
Stepping in to fill what was left of an unexpired term last September, Miran served as a contrarian voice on the rate-setting Federal Open Market Committee.
He voted “no” in each of the six meetings he has attended since taking over for Adriana Kugler, who abruptly resigned in August 2025.
In his letter, Miran said his brief stint was “the highest honor of my life” and expressed confidence in Warsh, who gained Senate confirmation to the top seat Wednesday.
Miran came to the Fed after serving as chair of the Council of Economic Advisers.
“Going forward, I am excited about changes Chairman-designate Kevin Warsh and the Federal Reserve may make in areas such as communications policy, balance sheet policy, and keeping the Federal Reserve to its narrow mandate and out of hot-button political and cultural issues,” he wrote.
Miran has advocated for lower rates, voting against the three quarter-percentage-point reductions the FOMC approved in 2025.
This year, he voted against the three decisions to hold rates steady in favor of quarter-point cuts.
In addition, he said he has pushed for a more forward-looking approach to monetary policy and believes the Fed “needs to do a better job accounting for nonmonetary forces and their implications for monetary policy.”
He also expressed support for a series of moves the Fed has enacted lowering regulatory barriers for banks, and led research showing how the central bank should shrink the size of its balance sheet and its $6.7 trillion in asset holdings.
https://www.cnbc.com/2026/05/14/fed-gov ... chair.html
Re: THE DAILY NEWS
CNBC
"Treasury yields are little changed as April import and export prices soar above Wall Street expectations"
Sean Conlon @SeanAustin96 Joseph Wilkins
Published Thu, May 14 2026
Treasury yields were relatively unchanged on Thursday as the U.S. said import and export prices last month soared above market expectations.
The yield on the 10-year U.S. Treasury note — the key benchmark pricing mortgages, auto loans and credit card debt — rose less than 1 basis point to 4.481%.
The 2-year Treasury note yield, which closely tracks short-term Federal Reserve interest rate policy, was more than 1 basis point higher at 4.009%, above the Federal Reserve’s benchmark fed fund rates that stand in a range between 3.50% and 3.75%.
The longer-dated 30-year Treasury bond yield declined more than 1 basis point to 5.028%.
One basis point equal 0.01%, and yields and prices move inversely to each another.
April import and export prices hit their highest levels since 2022, the Bureau of Labor Statistics reported Thursday.
“Fed officials are at risk of falling even further behind the curve when it comes to their current inflation fight,” said Chris Rupkey, chief economist at FWDBONDS.
Import prices jumped 1.9% for the month, a full percentage point above the March move and higher than the 0.9% Dow Jones consensus forecast.
On a 12-month basis, prices rose 4.2%, the most since October 2022.
The rise came in large part from energy-related costs, as prices for fuels and lubricants surged 16.3%.
Petroleum and petroleum products prices increased 19%.
Nonfuel imports rose 0.8% on higher prices for capital goods, nonfuel supplies and foods and beverages.
On the export side, prices climbed even more, up 3.3%, which put the 12-month increase at 8.8%, the highest since September 2022.
“Nonfuel import prices are surging as the dam has broken and importers cannot hold off any longer in pushing up the price of imported goods,” Rupkey said.
On Wednesday, April’s producer price index rose 1.4%, the biggest monthly increase since March 2022 and also exceeding economists’ 0.5% consensus estimate and the upwardly revised 0.7% March increase.
On an annual basis, the index was up 6% — the biggest increase since December 2022.
The report arrived a day after the BLS reported that the consumer price index rose 3.8% from a year ago for the month, as surging energy prices compounded inflation by a surprise jump in shelter costs.
Core inflation was more subdued at 2.8% but still well above the Federal Reserve’s 2% goal, likely keeping central bankers on hold as the impacts from the Iran war and President Donald Trump’s tariffs play out.
Kevin Warsh was confirmed as the next Fed chair Wednesday, setting him up to succeed Jerome Powell, whose term is scheduled to end Friday.
“Warsh really has his hands full as the economy is holding its own despite the risks and uncertainty of the Middle East war and inflation pressures are springing leaks everywhere we look,” Rupkey also said.
— CNBC’s Lisa Kailai Han also contributed to this report.
https://www.cnbc.com/2026/05/14/treasur ... n-fed.html
"Treasury yields are little changed as April import and export prices soar above Wall Street expectations"
Sean Conlon @SeanAustin96 Joseph Wilkins
Published Thu, May 14 2026
Treasury yields were relatively unchanged on Thursday as the U.S. said import and export prices last month soared above market expectations.
The yield on the 10-year U.S. Treasury note — the key benchmark pricing mortgages, auto loans and credit card debt — rose less than 1 basis point to 4.481%.
The 2-year Treasury note yield, which closely tracks short-term Federal Reserve interest rate policy, was more than 1 basis point higher at 4.009%, above the Federal Reserve’s benchmark fed fund rates that stand in a range between 3.50% and 3.75%.
The longer-dated 30-year Treasury bond yield declined more than 1 basis point to 5.028%.
One basis point equal 0.01%, and yields and prices move inversely to each another.
April import and export prices hit their highest levels since 2022, the Bureau of Labor Statistics reported Thursday.
“Fed officials are at risk of falling even further behind the curve when it comes to their current inflation fight,” said Chris Rupkey, chief economist at FWDBONDS.
Import prices jumped 1.9% for the month, a full percentage point above the March move and higher than the 0.9% Dow Jones consensus forecast.
On a 12-month basis, prices rose 4.2%, the most since October 2022.
The rise came in large part from energy-related costs, as prices for fuels and lubricants surged 16.3%.
Petroleum and petroleum products prices increased 19%.
Nonfuel imports rose 0.8% on higher prices for capital goods, nonfuel supplies and foods and beverages.
On the export side, prices climbed even more, up 3.3%, which put the 12-month increase at 8.8%, the highest since September 2022.
“Nonfuel import prices are surging as the dam has broken and importers cannot hold off any longer in pushing up the price of imported goods,” Rupkey said.
On Wednesday, April’s producer price index rose 1.4%, the biggest monthly increase since March 2022 and also exceeding economists’ 0.5% consensus estimate and the upwardly revised 0.7% March increase.
On an annual basis, the index was up 6% — the biggest increase since December 2022.
The report arrived a day after the BLS reported that the consumer price index rose 3.8% from a year ago for the month, as surging energy prices compounded inflation by a surprise jump in shelter costs.
Core inflation was more subdued at 2.8% but still well above the Federal Reserve’s 2% goal, likely keeping central bankers on hold as the impacts from the Iran war and President Donald Trump’s tariffs play out.
Kevin Warsh was confirmed as the next Fed chair Wednesday, setting him up to succeed Jerome Powell, whose term is scheduled to end Friday.
“Warsh really has his hands full as the economy is holding its own despite the risks and uncertainty of the Middle East war and inflation pressures are springing leaks everywhere we look,” Rupkey also said.
— CNBC’s Lisa Kailai Han also contributed to this report.
https://www.cnbc.com/2026/05/14/treasur ... n-fed.html
Re: THE DAILY NEWS
REUTERS
"Wall Street ends higher on tech rally; investors eye Beijing talks"
By Stephen Culp and Ragini Mathur
May 14, 2026
Summary
* Indexes up: Dow 0.75%, S&P 500 0.77%, Nasdaq 0.88%
* Nvidia gains following report U.S. clears China chip sales
* Cisco surges to record high after lifting forecast
* China to order 200 Boeing jets - Trump
* Cerebras jumps 90% above offer price in debut
NEW YORK, May 14 (Reuters) - U.S. stocks advanced on Thursday, lifted by a rally in tech stocks as investors absorbed generally solid economic data and watched for developments from Beijing, where U.S. President Trump was engaged in a high-stakes meeting with his Chinese counterpart Xi Jinping.
All three major U.S. stock indexes gained ground, with the S&P 500 and the Nasdaq setting their latest in a series of record closing highs.
The blue-chip Dow closed just 0.3% shy of its all-time closing high reached on February 10.
"Everybody's asking the same question: how much longer does this (rally) go on?"
"There's a lot of people that are loving this rally, but they're also antsy at the same time," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"You have to be in it to win it, not just sitting on the sidelines watching the market go to all-time highs."
Trump attended the summit along with an entourage that included Tesla CEO Elon Musk and Jensen Huang, chief executive of artificial-intelligence chipmaker Nvidia.
Nvidia's shares closed 4.4% higher after the U.S. cleared the sales of the company's H200 chips to Chinese firms.
The summit between Trump and Xi is intended to hash out a broad array of issues, including trade, U.S. arms sales to Taiwan and the re-opening of the Strait of Hormuz.
The waterway, through which Asia gets much of its crude, has been effectively shut down during the U.S.-Israeli war on Iran.
"Obviously, these are very high stakes meetings," said Michael Monaghan, portfolio manager at Founder ETFs in Dallas.
"It is certainly great power competition, but I think that these two economies will be better off working together."
"I'm happy to see the two leaders collaborating, a tone of collaboration, and hopefully we'll see that follow through in long-term agreements," Monaghan added.
On the economic front, retail sales were in line with expectations, but propped up by rising gasoline prices resulting from the Iran war.
Gasoline was largely responsible for the biggest jump in import prices since October 2022.
A series of inflation reports this week showed the risk of spiking energy costs metastasizing to other goods and services, extinguishing hopes for near-term rate cuts from the U.S. Federal Reserve.
Kansas City Fed President Jeffrey Schmid called inflation the most "pressing risk" to the U.S. economy, which he characterized as "resilient."
While Schmid is not a voter on monetary policy this year, his remarks reflect the view of the Fed's hawkish wing.
The Dow Jones Industrial Average rose 370.26 points, or 0.75%, to 50,063.46, the S&P 500 gained 56.99 points, or 0.77%, to 7,501.24 and the Nasdaq Composite gained 232.88 points, or 0.88%, to 26,635.22.
Among the 11 major sectors in the S&P 500, tech shares led the percentage gainers, while materials suffered the steepest loss.
Semiconductor stocks were lifted by Nvidia, while other artificial intelligence-related firms, including Qualcomm, Intel, Sandisk and Micron slid between 3.4% and 6.1%.
Sectors that have suffered amid continued AI fervor, and the ongoing strife in the Middle East, were among the session's best performers, including software & services, transports and regional banks.
Cisco surged 13.4% to touch an all-time high after the computer networking giant announced almost 4,000 job cuts as part of a restructuring scheme, and raised its annual revenue forecast.
U.S.-listed shares of tech infrastructure firm Nebius Group rose 6.7% after Northland Capital raised its target price by 15.3% to $248 per share.
China has agreed to buy 200 jets from Boeing, President Trump told Fox News.
Even so, the planemaker's stock slid 4.7%.
Chipmaker Cerebras jumped 68.2% in its U.S. market debut.
Advancing issues outnumbered decliners by a 1.6-to-1 ratio on the NYSE.
There were 500 new highs and 95 new lows on the NYSE.
On the Nasdaq, 2,755 stocks rose and 1,980 fell as advancing issues outnumbered decliners by a 1.39-to-1 ratio.
The S&P 500 posted 30 new 52-week highs and 11 new lows while the Nasdaq Composite recorded 113 new highs and 130 new lows.
Volume on U.S. exchanges was 18.77 billion shares, compared with the 18.17 billion average for the full session over the last 20 trading days.
Reporting by Stephen Culp; Additional reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by David Gregorio
https://www.reuters.com/world/china/sp- ... 026-05-14/
"Wall Street ends higher on tech rally; investors eye Beijing talks"
By Stephen Culp and Ragini Mathur
May 14, 2026
Summary
* Indexes up: Dow 0.75%, S&P 500 0.77%, Nasdaq 0.88%
* Nvidia gains following report U.S. clears China chip sales
* Cisco surges to record high after lifting forecast
* China to order 200 Boeing jets - Trump
* Cerebras jumps 90% above offer price in debut
NEW YORK, May 14 (Reuters) - U.S. stocks advanced on Thursday, lifted by a rally in tech stocks as investors absorbed generally solid economic data and watched for developments from Beijing, where U.S. President Trump was engaged in a high-stakes meeting with his Chinese counterpart Xi Jinping.
All three major U.S. stock indexes gained ground, with the S&P 500 and the Nasdaq setting their latest in a series of record closing highs.
The blue-chip Dow closed just 0.3% shy of its all-time closing high reached on February 10.
"Everybody's asking the same question: how much longer does this (rally) go on?"
"There's a lot of people that are loving this rally, but they're also antsy at the same time," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
"You have to be in it to win it, not just sitting on the sidelines watching the market go to all-time highs."
Trump attended the summit along with an entourage that included Tesla CEO Elon Musk and Jensen Huang, chief executive of artificial-intelligence chipmaker Nvidia.
Nvidia's shares closed 4.4% higher after the U.S. cleared the sales of the company's H200 chips to Chinese firms.
The summit between Trump and Xi is intended to hash out a broad array of issues, including trade, U.S. arms sales to Taiwan and the re-opening of the Strait of Hormuz.
The waterway, through which Asia gets much of its crude, has been effectively shut down during the U.S.-Israeli war on Iran.
"Obviously, these are very high stakes meetings," said Michael Monaghan, portfolio manager at Founder ETFs in Dallas.
"It is certainly great power competition, but I think that these two economies will be better off working together."
"I'm happy to see the two leaders collaborating, a tone of collaboration, and hopefully we'll see that follow through in long-term agreements," Monaghan added.
On the economic front, retail sales were in line with expectations, but propped up by rising gasoline prices resulting from the Iran war.
Gasoline was largely responsible for the biggest jump in import prices since October 2022.
A series of inflation reports this week showed the risk of spiking energy costs metastasizing to other goods and services, extinguishing hopes for near-term rate cuts from the U.S. Federal Reserve.
Kansas City Fed President Jeffrey Schmid called inflation the most "pressing risk" to the U.S. economy, which he characterized as "resilient."
While Schmid is not a voter on monetary policy this year, his remarks reflect the view of the Fed's hawkish wing.
The Dow Jones Industrial Average rose 370.26 points, or 0.75%, to 50,063.46, the S&P 500 gained 56.99 points, or 0.77%, to 7,501.24 and the Nasdaq Composite gained 232.88 points, or 0.88%, to 26,635.22.
Among the 11 major sectors in the S&P 500, tech shares led the percentage gainers, while materials suffered the steepest loss.
Semiconductor stocks were lifted by Nvidia, while other artificial intelligence-related firms, including Qualcomm, Intel, Sandisk and Micron slid between 3.4% and 6.1%.
Sectors that have suffered amid continued AI fervor, and the ongoing strife in the Middle East, were among the session's best performers, including software & services, transports and regional banks.
Cisco surged 13.4% to touch an all-time high after the computer networking giant announced almost 4,000 job cuts as part of a restructuring scheme, and raised its annual revenue forecast.
U.S.-listed shares of tech infrastructure firm Nebius Group rose 6.7% after Northland Capital raised its target price by 15.3% to $248 per share.
China has agreed to buy 200 jets from Boeing, President Trump told Fox News.
Even so, the planemaker's stock slid 4.7%.
Chipmaker Cerebras jumped 68.2% in its U.S. market debut.
Advancing issues outnumbered decliners by a 1.6-to-1 ratio on the NYSE.
There were 500 new highs and 95 new lows on the NYSE.
On the Nasdaq, 2,755 stocks rose and 1,980 fell as advancing issues outnumbered decliners by a 1.39-to-1 ratio.
The S&P 500 posted 30 new 52-week highs and 11 new lows while the Nasdaq Composite recorded 113 new highs and 130 new lows.
Volume on U.S. exchanges was 18.77 billion shares, compared with the 18.17 billion average for the full session over the last 20 trading days.
Reporting by Stephen Culp; Additional reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by David Gregorio
https://www.reuters.com/world/china/sp- ... 026-05-14/
Re: THE DAILY NEWS
REUTERS
"US import prices surge in April as fuels post biggest gain in four years"
By Reuters
May 14, 2026
WASHINGTON, May 14 (Reuters) - U.S. import prices surged in April, with the cost of fuels posting the largest increase in four years, another indication that the U.S.-backed war with Iran was boosting inflation.
Import prices increased 1.9% last month after an upwardly revised 0.9% rise in March, the Labor Department's Bureau of Labor Statistics said on Thursday.
Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 1.0% after a previously reported 0.8% advance in March.
In the 12 months through April, import prices vaulted 4.2%.
That reading was the largest year-on-year rise since October 2022, and followed a 2.3% increase in March.
The government reported this week another solid increase in consumer prices in April, which resulted in the annual inflation rate advancing at its fastest pace in three years.
Producer prices recorded their largest rise in four years in April.
The war in the Middle East has disrupted shipping in the Strait of Hormuz, driving up prices of energy and other commodities, including fertilizer and aluminum.
Soaring inflation cemented expectations that the Federal Reserve would keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.
Prices of imported fuel jumped 16.3% last month, the largest advance since March 2022, after rising 10.0% in March.
Prices of imported food increased 0.9%.
Excluding food and energy, import prices shot up 0.7% after gaining 0.2% in March.
Prices of imported capital goods rose 1.1%, while those of consumer goods, excluding automotives, increased 0.4%.
But prices of imported automotive vehicles, parts and engines dipped 0.1%.
Prices of imports from China rose 0.8%, the largest gain since July 2008.
There were also strong increases in prices of imported goods from Japan, the European Union and Mexico.
Prices of imported goods from Canada jumped 5.6%, the biggest rise in four years.
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/world/americas/ ... 026-05-14/
"US import prices surge in April as fuels post biggest gain in four years"
By Reuters
May 14, 2026
WASHINGTON, May 14 (Reuters) - U.S. import prices surged in April, with the cost of fuels posting the largest increase in four years, another indication that the U.S.-backed war with Iran was boosting inflation.
Import prices increased 1.9% last month after an upwardly revised 0.9% rise in March, the Labor Department's Bureau of Labor Statistics said on Thursday.
Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 1.0% after a previously reported 0.8% advance in March.
In the 12 months through April, import prices vaulted 4.2%.
That reading was the largest year-on-year rise since October 2022, and followed a 2.3% increase in March.
The government reported this week another solid increase in consumer prices in April, which resulted in the annual inflation rate advancing at its fastest pace in three years.
Producer prices recorded their largest rise in four years in April.
The war in the Middle East has disrupted shipping in the Strait of Hormuz, driving up prices of energy and other commodities, including fertilizer and aluminum.
Soaring inflation cemented expectations that the Federal Reserve would keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.
Prices of imported fuel jumped 16.3% last month, the largest advance since March 2022, after rising 10.0% in March.
Prices of imported food increased 0.9%.
Excluding food and energy, import prices shot up 0.7% after gaining 0.2% in March.
Prices of imported capital goods rose 1.1%, while those of consumer goods, excluding automotives, increased 0.4%.
But prices of imported automotive vehicles, parts and engines dipped 0.1%.
Prices of imports from China rose 0.8%, the largest gain since July 2008.
There were also strong increases in prices of imported goods from Japan, the European Union and Mexico.
Prices of imported goods from Canada jumped 5.6%, the biggest rise in four years.
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/world/americas/ ... 026-05-14/
Re: THE DAILY NEWS
REUTERS
"Investors gird for high US Treasury yields as new Fed Chair Warsh battles inflation"
By Gertrude Chavez-Dreyfuss
May 14, 2026
Summary
* Investors expect persistent inflation to keep long yields high
* Uncertainty over Warsh's Fed policy adds to steepening bets
* Oil price big driver of Treasury yields
NEW YORK, May 14 (Reuters) - Investors are bracing for U.S. Treasury yields to stay higher longer, skeptical that incoming Federal Reserve Chair Kevin Warsh will be able to tame inflation stoked by surging oil prices during a prolonged Middle East conflict.
Long-dated yields, including those on benchmark 10-year notes, have spiked as investors demand greater compensation for inflation risk as higher energy prices bite.
Higher long-term yields feed directly into borrowing costs across the economy: mortgages, corporate bonds, leveraged loans all become more expensive.
"It's not an understatement to say that inflation has been uncomfortable and above target ... heading on five years now and there's also not directionally a way to reassure investors and give them comfort," said Christian Hoffmann, head of fixed income at Thornburg Investment Management in Santa Fe, New Mexico.
Higher benchmark yields could also present headwinds for U.S. stock prices, as companies and consumers will face higher borrowing costs.
This can also weigh on economic growth and corporate profits, while possibly making bond returns more competitive with stocks.
The spike in yields is tied to energy markets, which investors view as the primary driver of price pressures.
"Whatever oil does is where yields are going," said Byron Anderson, head of fixed income at Laffer Tengler Investments in Scottsdale, Arizona.
That scenario has prompted some investors to reduce exposure to longer-duration bonds, with Anderson saying his firm is avoiding the long end almost entirely.
Persistent inflation, he argued, will keep pushing long-term yields higher, potentially driving 10-year Treasuries toward 5%, a level not seen since October 2023.
Since the beginning of March, the benchmark 10-year yield has risen by roughly 45 basis points and on Wednesday hit an 11-month peak.
It was last at 4.484%.
CHALLENGE AHEAD
Investors say stubborn inflation will challenge Warsh, who may encounter a divided group of policymakers.
"If the first things we hear from him (Warsh) are ... dovish arguments about how the Fed can cut interest rates, I think that's going to be a big problem for the bond market," said Ryan Swift, chief U.S. bond strategist at BCA Research in Montreal.
"That would really risk those inflation expectations breaking out and sort of losing control of the long end of the yield curve and that would be a big problem."
Financial markets expect no change to the Fed's 3.5%-3.75% policy rate target this year.
"As incoming Chairman Warsh rolls up his sleeves to get to work, he has some challenges ahead of him," said Jim Baird, chief investment officer, Plante Moran Financial Advisors, Southfield, Michigan.
"The challenge around the inflation picture is that there are a number of factors ... which can't be ideally addressed simply by raising rates."
"Raising rates isn't going to lower global oil prices."
CURVE SEEN STEEPENING
Some see a steeper yield curve going forward, reflecting expectations that interest rates will remain steady on the front end of the curve, with oil-driven inflation driving a selloff in long-dated Treasuries.
A steepening trend stalled when the Middle East conflict started as investors priced out interest rate cuts this year with stubborn price pressures.
However, the curve steepened for the last two sessions, with the spread between 10-year and two-year yields last at 48.50 bps.
Chip Hughey, managing director of fixed income at Truist Wealth in Richmond, Virginia, said the sticky inflation picture reinforces expectations that rates will remain on hold until inflation pressures ease, even as the Fed's next move — whether easing or tightening — remains a subject of debate.
Hughey expects the curve to steepen, anticipating that the Fed eventually shifts toward cuts later in the year.
This would pull short-term yields lower while longer-dated yields remain elevated due to persistent inflation and economic resilience.
Laffer's Anderson said a steeper curve makes sense.
"I think you'll keep seeing the long end sell off just because you're going to continue to see inflation increase."
Warsh's longer-term policy preferences, particularly his focus on shrinking the Fed's balance sheet and potentially shortening the maturity profile of its portfolio, could also shape the curve.
A smaller Fed balance sheet implies a withdrawal of meaningful government demand for Treasuries.
Financial conditions would tighten without the central bank providing liquidity to the market.
Reduced Fed bond purchases would also expand the amount of Treasury supply, which tends to lower bond prices and lift long‑dated yields, steepening the curve.
Martin Tobias, U.S. rates strategist at Morgan Stanley, said markets are still trying to understand how Warsh might approach balance sheet policy, an issue that could ultimately influence term premiums and Treasury supply dynamics.
Yet any shift is likely to be gradual.
"It's going to take some time for Kevin Warsh to build consensus," Tobias said.
Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Sinéad Carew, Karen Brettell and Lewis Krauskopf; editing by Megan Davies and David Gregorio
https://www.reuters.com/business/invest ... 026-05-14/
"Investors gird for high US Treasury yields as new Fed Chair Warsh battles inflation"
By Gertrude Chavez-Dreyfuss
May 14, 2026
Summary
* Investors expect persistent inflation to keep long yields high
* Uncertainty over Warsh's Fed policy adds to steepening bets
* Oil price big driver of Treasury yields
NEW YORK, May 14 (Reuters) - Investors are bracing for U.S. Treasury yields to stay higher longer, skeptical that incoming Federal Reserve Chair Kevin Warsh will be able to tame inflation stoked by surging oil prices during a prolonged Middle East conflict.
Long-dated yields, including those on benchmark 10-year notes, have spiked as investors demand greater compensation for inflation risk as higher energy prices bite.
Higher long-term yields feed directly into borrowing costs across the economy: mortgages, corporate bonds, leveraged loans all become more expensive.
"It's not an understatement to say that inflation has been uncomfortable and above target ... heading on five years now and there's also not directionally a way to reassure investors and give them comfort," said Christian Hoffmann, head of fixed income at Thornburg Investment Management in Santa Fe, New Mexico.
Higher benchmark yields could also present headwinds for U.S. stock prices, as companies and consumers will face higher borrowing costs.
This can also weigh on economic growth and corporate profits, while possibly making bond returns more competitive with stocks.
The spike in yields is tied to energy markets, which investors view as the primary driver of price pressures.
"Whatever oil does is where yields are going," said Byron Anderson, head of fixed income at Laffer Tengler Investments in Scottsdale, Arizona.
That scenario has prompted some investors to reduce exposure to longer-duration bonds, with Anderson saying his firm is avoiding the long end almost entirely.
Persistent inflation, he argued, will keep pushing long-term yields higher, potentially driving 10-year Treasuries toward 5%, a level not seen since October 2023.
Since the beginning of March, the benchmark 10-year yield has risen by roughly 45 basis points and on Wednesday hit an 11-month peak.
It was last at 4.484%.
CHALLENGE AHEAD
Investors say stubborn inflation will challenge Warsh, who may encounter a divided group of policymakers.
"If the first things we hear from him (Warsh) are ... dovish arguments about how the Fed can cut interest rates, I think that's going to be a big problem for the bond market," said Ryan Swift, chief U.S. bond strategist at BCA Research in Montreal.
"That would really risk those inflation expectations breaking out and sort of losing control of the long end of the yield curve and that would be a big problem."
Financial markets expect no change to the Fed's 3.5%-3.75% policy rate target this year.
"As incoming Chairman Warsh rolls up his sleeves to get to work, he has some challenges ahead of him," said Jim Baird, chief investment officer, Plante Moran Financial Advisors, Southfield, Michigan.
"The challenge around the inflation picture is that there are a number of factors ... which can't be ideally addressed simply by raising rates."
"Raising rates isn't going to lower global oil prices."
CURVE SEEN STEEPENING
Some see a steeper yield curve going forward, reflecting expectations that interest rates will remain steady on the front end of the curve, with oil-driven inflation driving a selloff in long-dated Treasuries.
A steepening trend stalled when the Middle East conflict started as investors priced out interest rate cuts this year with stubborn price pressures.
However, the curve steepened for the last two sessions, with the spread between 10-year and two-year yields last at 48.50 bps.
Chip Hughey, managing director of fixed income at Truist Wealth in Richmond, Virginia, said the sticky inflation picture reinforces expectations that rates will remain on hold until inflation pressures ease, even as the Fed's next move — whether easing or tightening — remains a subject of debate.
Hughey expects the curve to steepen, anticipating that the Fed eventually shifts toward cuts later in the year.
This would pull short-term yields lower while longer-dated yields remain elevated due to persistent inflation and economic resilience.
Laffer's Anderson said a steeper curve makes sense.
"I think you'll keep seeing the long end sell off just because you're going to continue to see inflation increase."
Warsh's longer-term policy preferences, particularly his focus on shrinking the Fed's balance sheet and potentially shortening the maturity profile of its portfolio, could also shape the curve.
A smaller Fed balance sheet implies a withdrawal of meaningful government demand for Treasuries.
Financial conditions would tighten without the central bank providing liquidity to the market.
Reduced Fed bond purchases would also expand the amount of Treasury supply, which tends to lower bond prices and lift long‑dated yields, steepening the curve.
Martin Tobias, U.S. rates strategist at Morgan Stanley, said markets are still trying to understand how Warsh might approach balance sheet policy, an issue that could ultimately influence term premiums and Treasury supply dynamics.
Yet any shift is likely to be gradual.
"It's going to take some time for Kevin Warsh to build consensus," Tobias said.
Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Sinéad Carew, Karen Brettell and Lewis Krauskopf; editing by Megan Davies and David Gregorio
https://www.reuters.com/business/invest ... 026-05-14/
Re: THE DAILY NEWS
REUTERS
"Xi tells Trump that mishandling of Taiwan could lead to 'dangerous' place"
By Trevor Hunnicutt and Mei Mei Chu
May 13, 2026
Summary
* First visit to China by US president since 2017
* Xi hails 'positive outcome' of trade talks
* Trump seeks economic wins, help on Iran war
* Big Boeing airplane order expected, Bessent says
* Nvidia's Huang, Musk among CEOs in tow
BEIJING, May 14 (Reuters) - China's President Xi Jinping warned U.S. President Donald Trump on Thursday that mishandling the countries' disagreements over Taiwan could push China-U.S. relations to a "dangerous place," as the two leaders met for a closely watched summit.
Xi's remarks on Taiwan, the democratically governed island claimed by Beijing, came in a closed-door meeting of the leaders of the world's two largest economies that ran more than two hours, China's foreign ministry said.
They represented a stark - if not unprecedented - warning during a pomp-filled occasion that was otherwise friendly and relaxed, although the U.S. summary of the talks made no mention of Taiwan.
According to Chinese state media Xinhua, Xi, referring to Taiwan, told Trump: "If handled poorly, the two countries could collide or even enter into conflict, pushing the entire China-U.S. relationship into an extremely dangerous place."
Taiwan has long been a flashpoint in the U.S.-China relationship, with Beijing refusing to rule out the use of military force to gain control of the island and the United States bound by law to provide Taipei with the means to defend itself.
U.S. Secretary of State Marco Rubio, who is with Trump in China, confirmed to NBC News that the issue of Taiwan was discussed, saying the Chinese "always raise it on their side, we always make clear our position and we move on to the other topics."
The U.S. summary of the talks focused on the leaders' shared desire to reopen the key waterway of the Strait of Hormuz, effectively closed due to the Iran war, and Xi's apparent interest in buying American oil to reduce China's dependence on Middle East supplies.
With Trump's approval ratings dented by a war with Iran that shows no signs of abating, the first visit by a U.S. president to China in nearly a decade has taken on added significance as he searches for economic wins.
"There are those who say this may be the biggest summit ever," Trump told Xi in brief opening remarks, after a ceremony that featured an honour guard and throngs of children waving flowers and flags at Beijing's Great Hall of the People.
Xi told Trump that preparatory negotiations between U.S. and Chinese economic and trade teams in South Korea on Wednesday had reached "balanced and positive outcomes", China's foreign ministry said in a summary.
The talks aimed to maintain a fragile trade truce struck when the leaders last met in October, where Trump suspended triple-digit tariffs on Chinese goods and Xi backed away from choking global supplies of vital rare earths.
Treasury Secretary Scott Bessent, who led Wednesday's talks, said he expected progress on establishing mechanisms to support future bilateral trade and investment, and an announcement about large Chinese orders for Boeing aircraft.
CHINA'S RED LINES
Trump expected Xi to raise the thorny issue of U.S. arms sales to Taiwan, he said earlier this week.
With the status of a $14 billion package awaiting Trump's approval still unclear, China has reiterated its strong opposition to the sales.
"U.S. policy on the issue of Taiwan is unchanged as of today," Rubio told NBC.
Trump did not respond to a reporter's shouted question whether the leaders had discussed Taiwan as he posed with Xi later for photos at the Temple of Heaven, a UNESCO World Heritage Site where emperors once prayed for good harvests.
Taipei said there was nothing surprising from the summit and that China's military pressure is the real threat to peace.
Underscoring its outsized importance to the U.S. economy, Taiwan, an island of 23 million people, is the United States' fourth-largest trading partner, behind China, which has about 1.4 billion people.
LOBSTER SOUP AND BEIJING DUCK
At a lavish state banquet attended by senior officials and business executives, Xi told the audience that the China-U.S. relationship was the most important in the world.
"We must make it work and never mess it up," Xi said, before guests tucked into a 10-course dinner that included lobster soup, Beijing roast duck and tiramisu.
The leaders will take tea and lunch together on Friday before Trump departs.
Joining Trump on his visit are a group of CEOs looking to resolve issues with China, from Elon Musk, viewed in China as a visionary and occasional villain, to Nvidia CEO Jensen Huang, a late addition to the delegation.
The United States has cleared around 10 Chinese firms to buy Nvidia's powerful H200 AI chip, but not a single delivery has been made so far, Reuters exclusively reported.
TRUMP INVITES XI TO WASHINGTON
Trump entered the talks with a weakened hand.
U.S. courts have hemmed in his ability to levy tariffs at will on exports from China and other countries, while the Iran war has boosted inflation at home and elevated the risk that Trump's Republican Party will lose control of one or both legislative branches in November's midterm elections.
Though the Chinese economy has faltered, Xi does not face comparable economic or political pressure.
As well as Boeing jets, Washington is looking to sell farm goods and energy to China to cut a trade deficit that has long irked Trump.
Beijing, for its part, wants U.S. curbs eased on exports of chip-making equipment and advanced semiconductors, officials involved in the planning said.
Trump is expected to encourage China to convince Iran to make a deal with Washington to end the conflict, as a fifth of global supplies of oil and natural gas travel through the Strait of Hormuz in normal times.
But analysts doubt Xi will be willing to push Tehran hard or end support for its military, given Iran's value to Beijing as a strategic counterweight to the United States.
Rubio told Fox News that it was in China's interest to help resolve the crisis as many of its ships are stuck in the Gulf and a slowdown in the global economy would hurt its exporters.
Iran's Fars news agency reported on Thursday that an agreement had been reached to let some Chinese ships pass.
Trump on Thursday invited Xi for a reciprocal trip to the White House on September 24, in what would be his first visit to Washington since 2015 and his first to the United States in the U.S. president's second term.
Reporting by Trevor Hunnicutt, Mei Mei Chu, Antoni Slodkowski, Laurie Chen and the Beijing newsroom and Ben Blanchard in Taipei; Writing by John Geddie and Brad Brooks; Editing by Sanjeev Miglani, Lincoln Feast, Clarence Fernandez, Philippa Fletcher and Deepa Babington
https://www.reuters.com/world/china/tru ... 026-05-13/
"Xi tells Trump that mishandling of Taiwan could lead to 'dangerous' place"
By Trevor Hunnicutt and Mei Mei Chu
May 13, 2026
Summary
* First visit to China by US president since 2017
* Xi hails 'positive outcome' of trade talks
* Trump seeks economic wins, help on Iran war
* Big Boeing airplane order expected, Bessent says
* Nvidia's Huang, Musk among CEOs in tow
BEIJING, May 14 (Reuters) - China's President Xi Jinping warned U.S. President Donald Trump on Thursday that mishandling the countries' disagreements over Taiwan could push China-U.S. relations to a "dangerous place," as the two leaders met for a closely watched summit.
Xi's remarks on Taiwan, the democratically governed island claimed by Beijing, came in a closed-door meeting of the leaders of the world's two largest economies that ran more than two hours, China's foreign ministry said.
They represented a stark - if not unprecedented - warning during a pomp-filled occasion that was otherwise friendly and relaxed, although the U.S. summary of the talks made no mention of Taiwan.
According to Chinese state media Xinhua, Xi, referring to Taiwan, told Trump: "If handled poorly, the two countries could collide or even enter into conflict, pushing the entire China-U.S. relationship into an extremely dangerous place."
Taiwan has long been a flashpoint in the U.S.-China relationship, with Beijing refusing to rule out the use of military force to gain control of the island and the United States bound by law to provide Taipei with the means to defend itself.
U.S. Secretary of State Marco Rubio, who is with Trump in China, confirmed to NBC News that the issue of Taiwan was discussed, saying the Chinese "always raise it on their side, we always make clear our position and we move on to the other topics."
The U.S. summary of the talks focused on the leaders' shared desire to reopen the key waterway of the Strait of Hormuz, effectively closed due to the Iran war, and Xi's apparent interest in buying American oil to reduce China's dependence on Middle East supplies.
With Trump's approval ratings dented by a war with Iran that shows no signs of abating, the first visit by a U.S. president to China in nearly a decade has taken on added significance as he searches for economic wins.
"There are those who say this may be the biggest summit ever," Trump told Xi in brief opening remarks, after a ceremony that featured an honour guard and throngs of children waving flowers and flags at Beijing's Great Hall of the People.
Xi told Trump that preparatory negotiations between U.S. and Chinese economic and trade teams in South Korea on Wednesday had reached "balanced and positive outcomes", China's foreign ministry said in a summary.
The talks aimed to maintain a fragile trade truce struck when the leaders last met in October, where Trump suspended triple-digit tariffs on Chinese goods and Xi backed away from choking global supplies of vital rare earths.
Treasury Secretary Scott Bessent, who led Wednesday's talks, said he expected progress on establishing mechanisms to support future bilateral trade and investment, and an announcement about large Chinese orders for Boeing aircraft.
CHINA'S RED LINES
Trump expected Xi to raise the thorny issue of U.S. arms sales to Taiwan, he said earlier this week.
With the status of a $14 billion package awaiting Trump's approval still unclear, China has reiterated its strong opposition to the sales.
"U.S. policy on the issue of Taiwan is unchanged as of today," Rubio told NBC.
Trump did not respond to a reporter's shouted question whether the leaders had discussed Taiwan as he posed with Xi later for photos at the Temple of Heaven, a UNESCO World Heritage Site where emperors once prayed for good harvests.
Taipei said there was nothing surprising from the summit and that China's military pressure is the real threat to peace.
Underscoring its outsized importance to the U.S. economy, Taiwan, an island of 23 million people, is the United States' fourth-largest trading partner, behind China, which has about 1.4 billion people.
LOBSTER SOUP AND BEIJING DUCK
At a lavish state banquet attended by senior officials and business executives, Xi told the audience that the China-U.S. relationship was the most important in the world.
"We must make it work and never mess it up," Xi said, before guests tucked into a 10-course dinner that included lobster soup, Beijing roast duck and tiramisu.
The leaders will take tea and lunch together on Friday before Trump departs.
Joining Trump on his visit are a group of CEOs looking to resolve issues with China, from Elon Musk, viewed in China as a visionary and occasional villain, to Nvidia CEO Jensen Huang, a late addition to the delegation.
The United States has cleared around 10 Chinese firms to buy Nvidia's powerful H200 AI chip, but not a single delivery has been made so far, Reuters exclusively reported.
TRUMP INVITES XI TO WASHINGTON
Trump entered the talks with a weakened hand.
U.S. courts have hemmed in his ability to levy tariffs at will on exports from China and other countries, while the Iran war has boosted inflation at home and elevated the risk that Trump's Republican Party will lose control of one or both legislative branches in November's midterm elections.
Though the Chinese economy has faltered, Xi does not face comparable economic or political pressure.
As well as Boeing jets, Washington is looking to sell farm goods and energy to China to cut a trade deficit that has long irked Trump.
Beijing, for its part, wants U.S. curbs eased on exports of chip-making equipment and advanced semiconductors, officials involved in the planning said.
Trump is expected to encourage China to convince Iran to make a deal with Washington to end the conflict, as a fifth of global supplies of oil and natural gas travel through the Strait of Hormuz in normal times.
But analysts doubt Xi will be willing to push Tehran hard or end support for its military, given Iran's value to Beijing as a strategic counterweight to the United States.
Rubio told Fox News that it was in China's interest to help resolve the crisis as many of its ships are stuck in the Gulf and a slowdown in the global economy would hurt its exporters.
Iran's Fars news agency reported on Thursday that an agreement had been reached to let some Chinese ships pass.
Trump on Thursday invited Xi for a reciprocal trip to the White House on September 24, in what would be his first visit to Washington since 2015 and his first to the United States in the U.S. president's second term.
Reporting by Trevor Hunnicutt, Mei Mei Chu, Antoni Slodkowski, Laurie Chen and the Beijing newsroom and Ben Blanchard in Taipei; Writing by John Geddie and Brad Brooks; Editing by Sanjeev Miglani, Lincoln Feast, Clarence Fernandez, Philippa Fletcher and Deepa Babington
https://www.reuters.com/world/china/tru ... 026-05-13/
Re: THE DAILY NEWS
REUTERS
"US weekly jobless claims increase moderately, labor market remains stable"
By Reuters
May 14, 2026
WASHINGTON, May 14 (Reuters) - The number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable labor market even as rising energy prices from the war with Iran drive up inflation.
Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted 211,000 for the week ended May 9, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 205,000 claims for the latest week.
The U.S.-Israel war with Iran has disrupted shipping in the Strait of Hormuz, also boosting prices of other commodities, including fertilizers, petrochemicals and aluminum.
The government reported on Wednesday that producer prices recorded their biggest increase in four years in April.
There are concerns that shortages and rising inflation could cause layoffs in some industries.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 24,000 to a seasonally adjusted 1.782 million during the week ended May 2, the claims report showed.
The government reported last week that nonfarm payrolls increased by 115,000 jobs in April, the second straight month of strong employment gains.
The unemployment rate was unchanged at 4.3%.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/business/us-wee ... 026-05-14/
"US weekly jobless claims increase moderately, labor market remains stable"
By Reuters
May 14, 2026
WASHINGTON, May 14 (Reuters) - The number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable labor market even as rising energy prices from the war with Iran drive up inflation.
Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted 211,000 for the week ended May 9, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 205,000 claims for the latest week.
The U.S.-Israel war with Iran has disrupted shipping in the Strait of Hormuz, also boosting prices of other commodities, including fertilizers, petrochemicals and aluminum.
The government reported on Wednesday that producer prices recorded their biggest increase in four years in April.
There are concerns that shortages and rising inflation could cause layoffs in some industries.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 24,000 to a seasonally adjusted 1.782 million during the week ended May 2, the claims report showed.
The government reported last week that nonfarm payrolls increased by 115,000 jobs in April, the second straight month of strong employment gains.
The unemployment rate was unchanged at 4.3%.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/business/us-wee ... 026-05-14/
Re: THE DAILY NEWS
REUTERS
"Tax refunds help to lift US retail sales; drag from rising inflation looms"
By Lucia Mutikani
May 14, 2026
Summary
* Retail sales increase 0.5% in April, in line with expectations
* Core retail sales up 0.5%, marking fourth straight monthly gain
* Weekly jobless claims climb 12,000 to 211,000
* Import prices jump 1.9% in April; up 4.2% on a year-over-year basis
WASHINGTON, May 14 (Reuters) - U.S. retail sales increased solidly for a third straight month in April, though part of the rise in receipts was due to a sharp rise in inflation since the start of the U.S.-backed war with Iran.
Rising price pressures were underscored by other data on Thursday showing imported inflation last month rose at its fastest pace in four years.
Larger tax refunds this year as well as strong stock market gains are providing households a cushion against rising inflation.
But price rises are outpacing wage gains, the tax filing season is over and the saving rate is near a 3-1/2-year low, leaving economists to anticipate softer spending late this quarter.
The continued strength in retail sales highlighted what economists call a K-shaped economy, where upper-income households are doing well while lower-income consumers are struggling.
The reports joined recent inflation and labor market data in reinforcing financial market expectations that the Federal Reserve would probably leave its benchmark overnight interest rate in the 3.50%-3.75% range into next year.
"The powerful equity market rally is supporting spending on the upper leg of the K-shaped expansion, more than offsetting any pullback from those on the lower leg who are struggling with higher fuel, transportation and food costs," said Sal Guatieri, a senior economist at BMO Capital Markets.
Retail sales rose 0.5% last month after a downwardly revised 1.6% jump in March, the Commerce Department's Census Bureau said.
Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would gain 0.5% after a previously reported 1.7% increase in March.
Retail sales increased 4.9% on a year-over-year basis in April.
Economists estimated that sales adjusted for inflation dipped 0.1% last month and were up 1.1% from a year ago.
The U.S.-Israeli conflict with Iran has disrupted shipping in the Strait of Hormuz, driving up prices of energy and other commodities, including fertilizer and aluminum.
Last month's advance in retail sales was led by a 1.4% increase in receipts at electronics and appliance stores.
Sales at nonstore retailers, which include online retailers, rose 1.1%.
Receipts at gasoline stations increased 2.8% after surging 13.7% in March.
Gasoline prices rose 12.3% in April, data from the U.S. Energy Information Administration showed.
Consumers also increased their discretionary spending, with sales at sporting goods, hobby, musical instrument and book stores shooting up 1.4%.
Receipts at food services and drinking places, the only services component in the report, rose 0.6%.
This category is considered a key measure of household finances.
Stocks on Wall Street were trading higher, with the S&P 500 and the Nasdaq Composite indexes touching fresh intraday record highs.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
NO DEMAND DESTRUCTION YET
Though the pain at the pump is yet to meaningfully pull spending away from other areas, households are quickly running down the proceeds from their tax refunds relative to other years, economists said.
The average tax refund was up $323 through April 25 compared to the same period in 2025, Internal Revenue Service data showed.
Economists at PNC Financial said that an analysis of internal data showed the rapid drawdown was occurring "particularly among lower-income households," adding that they were seeing "less of those refunds being used towards paying down credit card and other debt."
Households typically use the tax windfall to boost savings.
The saving rate dropped to 3.6% in March, the lowest since October 2022, from 3.9% in February.
Lower-income consumers disproportionately spend more on gasoline relative to higher-income households.
While layoffs remain low and the labor market is generating steady wage gains, high inflation is eroding purchasing power.
First-time applications for state unemployment benefits rose 12,000 to a still-low seasonally adjusted 211,000 for the week ended May 9, the Labor Department said in a separate report.
Inflation outpaced wage growth in April for the first time in three years.
"More consumers are turning to savings and credit to sustain spending."
"These trends are becoming increasingly difficult to maintain, particularly for lower-income households," said Lydia Boussour, a senior economist at EY-Parthenon.
Sales at clothing and clothing accessories stores fell 1.5%, the retail sales report showed.
Receipts at furniture and home furnishings retailers dropped 2.0%, while those at auto dealerships fell 0.4%.
Retail sales excluding automobiles, gasoline, building materials and food services rose 0.5% in April after an upwardly revised 0.8% increase in March.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product, and were previously reported to have advanced 0.7% in March.
Economists estimated that core retail sales rose only 0.1% last month after adjusting for inflation.
Consumer spending, which accounts for more than two-thirds of the economy, increased at a 1.6% annualized rate in the first quarter, decelerating from the October-December quarter's 1.9% growth pace.
It has cooled from the 3.5% growth rate notched in the third quarter of 2025.
A separate report from the Labor Department's Bureau of Labor Statistics showed import prices increased 1.9% last month, the largest gain since March 2022, after rising 0.9% in March.
In the 12 months through April, import prices vaulted 4.2%.
That reading was the largest year-on-year rise since October 2022 and followed a 2.3% increase in March.
Prices of imported fuel jumped 16.3%, the largest advance since March 2022, after rising 10.0% in March.
Prices of imported food increased 0.9%.
Excluding food and energy, import prices shot up 0.7% after gaining 0.2% in March.
The so-called core import prices rose 3.3% in the 12 months through April.
"From the Fed's perspective, a still-solid labor market, resilient consumer spending but high and seemingly broadening inflation risks firmly put the weight of risks back onto the inflation side of its dual mandate, which once again means rates are likely to stay higher for longer," said Richard de Chazal, macro analyst at William Blair.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao
https://www.reuters.com/business/us-ret ... 026-05-14/
"Tax refunds help to lift US retail sales; drag from rising inflation looms"
By Lucia Mutikani
May 14, 2026
Summary
* Retail sales increase 0.5% in April, in line with expectations
* Core retail sales up 0.5%, marking fourth straight monthly gain
* Weekly jobless claims climb 12,000 to 211,000
* Import prices jump 1.9% in April; up 4.2% on a year-over-year basis
WASHINGTON, May 14 (Reuters) - U.S. retail sales increased solidly for a third straight month in April, though part of the rise in receipts was due to a sharp rise in inflation since the start of the U.S.-backed war with Iran.
Rising price pressures were underscored by other data on Thursday showing imported inflation last month rose at its fastest pace in four years.
Larger tax refunds this year as well as strong stock market gains are providing households a cushion against rising inflation.
But price rises are outpacing wage gains, the tax filing season is over and the saving rate is near a 3-1/2-year low, leaving economists to anticipate softer spending late this quarter.
The continued strength in retail sales highlighted what economists call a K-shaped economy, where upper-income households are doing well while lower-income consumers are struggling.
The reports joined recent inflation and labor market data in reinforcing financial market expectations that the Federal Reserve would probably leave its benchmark overnight interest rate in the 3.50%-3.75% range into next year.
"The powerful equity market rally is supporting spending on the upper leg of the K-shaped expansion, more than offsetting any pullback from those on the lower leg who are struggling with higher fuel, transportation and food costs," said Sal Guatieri, a senior economist at BMO Capital Markets.
Retail sales rose 0.5% last month after a downwardly revised 1.6% jump in March, the Commerce Department's Census Bureau said.
Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would gain 0.5% after a previously reported 1.7% increase in March.
Retail sales increased 4.9% on a year-over-year basis in April.
Economists estimated that sales adjusted for inflation dipped 0.1% last month and were up 1.1% from a year ago.
The U.S.-Israeli conflict with Iran has disrupted shipping in the Strait of Hormuz, driving up prices of energy and other commodities, including fertilizer and aluminum.
Last month's advance in retail sales was led by a 1.4% increase in receipts at electronics and appliance stores.
Sales at nonstore retailers, which include online retailers, rose 1.1%.
Receipts at gasoline stations increased 2.8% after surging 13.7% in March.
Gasoline prices rose 12.3% in April, data from the U.S. Energy Information Administration showed.
Consumers also increased their discretionary spending, with sales at sporting goods, hobby, musical instrument and book stores shooting up 1.4%.
Receipts at food services and drinking places, the only services component in the report, rose 0.6%.
This category is considered a key measure of household finances.
Stocks on Wall Street were trading higher, with the S&P 500 and the Nasdaq Composite indexes touching fresh intraday record highs.
The dollar rose against a basket of currencies.
U.S. Treasury yields fell.
NO DEMAND DESTRUCTION YET
Though the pain at the pump is yet to meaningfully pull spending away from other areas, households are quickly running down the proceeds from their tax refunds relative to other years, economists said.
The average tax refund was up $323 through April 25 compared to the same period in 2025, Internal Revenue Service data showed.
Economists at PNC Financial said that an analysis of internal data showed the rapid drawdown was occurring "particularly among lower-income households," adding that they were seeing "less of those refunds being used towards paying down credit card and other debt."
Households typically use the tax windfall to boost savings.
The saving rate dropped to 3.6% in March, the lowest since October 2022, from 3.9% in February.
Lower-income consumers disproportionately spend more on gasoline relative to higher-income households.
While layoffs remain low and the labor market is generating steady wage gains, high inflation is eroding purchasing power.
First-time applications for state unemployment benefits rose 12,000 to a still-low seasonally adjusted 211,000 for the week ended May 9, the Labor Department said in a separate report.
Inflation outpaced wage growth in April for the first time in three years.
"More consumers are turning to savings and credit to sustain spending."
"These trends are becoming increasingly difficult to maintain, particularly for lower-income households," said Lydia Boussour, a senior economist at EY-Parthenon.
Sales at clothing and clothing accessories stores fell 1.5%, the retail sales report showed.
Receipts at furniture and home furnishings retailers dropped 2.0%, while those at auto dealerships fell 0.4%.
Retail sales excluding automobiles, gasoline, building materials and food services rose 0.5% in April after an upwardly revised 0.8% increase in March.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product, and were previously reported to have advanced 0.7% in March.
Economists estimated that core retail sales rose only 0.1% last month after adjusting for inflation.
Consumer spending, which accounts for more than two-thirds of the economy, increased at a 1.6% annualized rate in the first quarter, decelerating from the October-December quarter's 1.9% growth pace.
It has cooled from the 3.5% growth rate notched in the third quarter of 2025.
A separate report from the Labor Department's Bureau of Labor Statistics showed import prices increased 1.9% last month, the largest gain since March 2022, after rising 0.9% in March.
In the 12 months through April, import prices vaulted 4.2%.
That reading was the largest year-on-year rise since October 2022 and followed a 2.3% increase in March.
Prices of imported fuel jumped 16.3%, the largest advance since March 2022, after rising 10.0% in March.
Prices of imported food increased 0.9%.
Excluding food and energy, import prices shot up 0.7% after gaining 0.2% in March.
The so-called core import prices rose 3.3% in the 12 months through April.
"From the Fed's perspective, a still-solid labor market, resilient consumer spending but high and seemingly broadening inflation risks firmly put the weight of risks back onto the inflation side of its dual mandate, which once again means rates are likely to stay higher for longer," said Richard de Chazal, macro analyst at William Blair.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao
https://www.reuters.com/business/us-ret ... 026-05-14/
Re: THE DAILY NEWS
REUTERS
"Inflation is most 'pressing risk' to US economy, Fed's Schmid says"
By Reuters
May 14, 2026
May 14 (Reuters) - Inflation is the biggest risk to a U.S. economy that has shown "remarkable resilience" in the face of numerous challenges, and the job market is stable, Kansas City Federal Reserve President Jeffrey Schmid said on Thursday.
"I see continued inflation as the most pressing risk to the economy," Schmid said in prepared remarks to a banking industry conference hosted by the Kansas City Fed.
"While inflation has moderated significantly from its peak, in my discussions with business leaders across the Tenth District, it is clear that it is still too high."
Schmid, who is not a voter on monetary policy this year, did not comment on the outlook for interest rates.
But his emphasis on inflation indicates that he remains squarely within the Fed's hawkish wing opposed to rate cuts as long as inflation continues running above target.
Inflation by the measure the Fed uses to set its 2% target - the personal consumption expenditures price index - was running at 3.5% in March, the first month of the U.S.-Israeli led war against Iran that has triggered big jumps in global crude oil prices and U.S. gasoline prices.
Other inflation readings this week for April suggest that headline PCE may have approached 4% last month and has widened beyond energy cost pressures.
"Though the U.S. economy currently faces a number of challenges, it has also shown remarkable resilience," Schmid said.
"Geopolitical developments continue to create uncertainty."
"While the United States is less vulnerable to global energy disruptions than in the past, higher oil prices still drain household spending power and increase costs for businesses."
"Yet despite these headwinds, economic fundamentals in the U.S. and in the Tenth District remain sound."
Indeed U.S. gross domestic product growth picked up speed in the first quarter on the back of strong business investment - especially in the technology sector and artificial intelligence space - and continued consumer spending.
Schmid noted that wealth gains from a record-high stock market have helped many consumers, especially from upper-income households, lift their spending.
"Growth is positive, with economic output expanding at a modest but steady pace so far this year," Schmid said.
"Unemployment remains relatively low by historical standards, and the labor market is functioning effectively - albeit in an unusual low-hire/low-fire environment."
Reporting By Dan Burns; Editing by Chizu Nomiyama
https://www.reuters.com/business/inflat ... 026-05-14/
"Inflation is most 'pressing risk' to US economy, Fed's Schmid says"
By Reuters
May 14, 2026
May 14 (Reuters) - Inflation is the biggest risk to a U.S. economy that has shown "remarkable resilience" in the face of numerous challenges, and the job market is stable, Kansas City Federal Reserve President Jeffrey Schmid said on Thursday.
"I see continued inflation as the most pressing risk to the economy," Schmid said in prepared remarks to a banking industry conference hosted by the Kansas City Fed.
"While inflation has moderated significantly from its peak, in my discussions with business leaders across the Tenth District, it is clear that it is still too high."
Schmid, who is not a voter on monetary policy this year, did not comment on the outlook for interest rates.
But his emphasis on inflation indicates that he remains squarely within the Fed's hawkish wing opposed to rate cuts as long as inflation continues running above target.
Inflation by the measure the Fed uses to set its 2% target - the personal consumption expenditures price index - was running at 3.5% in March, the first month of the U.S.-Israeli led war against Iran that has triggered big jumps in global crude oil prices and U.S. gasoline prices.
Other inflation readings this week for April suggest that headline PCE may have approached 4% last month and has widened beyond energy cost pressures.
"Though the U.S. economy currently faces a number of challenges, it has also shown remarkable resilience," Schmid said.
"Geopolitical developments continue to create uncertainty."
"While the United States is less vulnerable to global energy disruptions than in the past, higher oil prices still drain household spending power and increase costs for businesses."
"Yet despite these headwinds, economic fundamentals in the U.S. and in the Tenth District remain sound."
Indeed U.S. gross domestic product growth picked up speed in the first quarter on the back of strong business investment - especially in the technology sector and artificial intelligence space - and continued consumer spending.
Schmid noted that wealth gains from a record-high stock market have helped many consumers, especially from upper-income households, lift their spending.
"Growth is positive, with economic output expanding at a modest but steady pace so far this year," Schmid said.
"Unemployment remains relatively low by historical standards, and the labor market is functioning effectively - albeit in an unusual low-hire/low-fire environment."
Reporting By Dan Burns; Editing by Chizu Nomiyama
https://www.reuters.com/business/inflat ... 026-05-14/