The Federal Reserve’s preferred inflation gauge rose to a new three-year high in May as gas prices peaked, a sign rising costs could pose political problems for President Trump as midterm elections near. The increase was largely driven by more expensive gas, as well as pricier semiconductors and other computer equipment that are in high demand for the AI buildout. Rising prices have caused the inflation-fighters at the Federal Reserve to keep their key rate unchanged this year, a reversal from January when they had penciled in two cuts. Some economists forecast the central bank could lift rates this year instead.
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Fed's preferred inflation gauge jumps to 3-year high in latest sign of affordability challenge.
U.S. House members have pledged strong support for Taiwan and welcomed Han Kuo-yu, president of Taiwan's Legislative Yuan, to Washington. This comes as the Trump administration reviews a $14 billion arms sales package to Taiwan. Representatives from both parties, including Nancy Pelosi and Michael McCaul, attended a reception to show their support. Han, leading a delegation, touted Taiwan's economic ties with the U.S. economy, particularly in tech. Han urged the U.S. to help Taiwan gain more international recognition, as China claims the island as its territory.
Stocks wavered to a mixed close on Wall Street as losses for several tech giants including Microsoft weighed on the market. The S&P 500 fell 0.1% on Wednesday, even though more stocks rose than fell within the index. The Dow added 0.4%, and the Nasdaq composite fell 0.4%. Another decline in oil prices helped ease concerns about inflation. Brent crude dropped 3.8%, bringing it closer to where it was before the war with Iran started. Treasury yields fell in the bond market. Google parent Alphabet slipped. The company will replace Verizon in the Dow next week.
President Donald Trump visited a Mack Trucks facility in Pennsylvania, for a speech meant to focusing on the economy. Instead, he spent most of the time talking about himself — reliving highlights from his 2024 presidential campaign. Tuesday's visit marked Trump's first major public event outside Washington since signing an interim agreement to end the Iran war. Trump toured the facility and addressed a cheering crowd. He touched on various topics, including the economy, the U.S.-Mexico border, and prescription drugs. Trump urged support for Republican Rep. Ryan Mackenzie in the upcoming elections. His visit highlighted Pennsylvania's importance as a swing state, with rising prices potentially impacting voter opinions.
AP Wire
The Supreme Court has ruled that Exxon Mobil can sue Cuban state-owned companies in American courts over property on the island nation that was seized after Fidel Castro took power. The decision Tuesday was the second in as many months in favor of U.S. owners of Cuban property that was confiscated by the Communist government more than 65 years ago. The outcome in the two cases could be an additional lever for the Trump administration to exert pressure on Cuba, which is already being squeezed by a U.S. oil embargo.
U.S. stocks drifted through a mixed day of trading after oil prices eased and falling Big Tech stocks weighed on Wall Street. The S&P 500 slipped 0.4% Monday and pulled 1.8% below its all-time high set early this month. The Dow Jones Industrial Average added 0.3%, and the Nasdaq composite slumped 1.3%. Oil prices fell roughly 3% following negotiations between the United States and Iran on ending their war. But drops for giants like Alphabet and Amazon weighed on the market, which resumed trading following a three-day weekend. Rising Treasury yields in the bond market also pressured stock prices.
AP Wire
Former U.S. Federal Reserve Chair Alan Greenspan has died at the age of 100. He died on Monday from complications of Parkinson’s Disease. That's according to his wife of 29 years, NBC News correspondent Andrea Mitchell. In his 18½ years at the helm of the Fed, Greenspan presided over a sustained era of American growth and prosperity, yet one that ended with devastating consequences in 2008, two years after he had left the central bank. Greenspan was so respected during his many years as head of the world’s most influential central bank that by the time he stepped down in 2006, he was widely celebrated as the “Oracle’’ and “Maestro.’’
AP Wire
U.S. and Iranian negotiators are on their way to a venue in Switzerland to discuss details of their interim agreement to halt the war. This comes after Iran said it closed the Strait of Hormuz due to Israel’s attacks in Lebanon. U.S. President Donald Trump in response threatened to impose tolls in the waterway if a final deal isn't reached in 60 days. Talks mediated by Pakistan and Qatar are set to begin Sunday. The deal involves unfreezing billions of dollars of Iran’s assets, and Iran's negotiating team includes central bank and oil officials, among others.
The Federal Reserve has for decades moved steadily from a remote, opaque government agency that shared little about what it did or why to a more transparent institution willing to explain how it makes decisions and what it thinks about the economy. New chair Kevin Warsh has begun to reverse some of those steps because he believes that by signaling its intentions the Fed pigeonholes itself into a position on interest rates. Yet such an approach carries the risk of more violent swings in stock and bond prices, analysts say, and ultimately higher interest rates for consumers and businesses.