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US Inflation Trends Stick Against Tariffs

• A marginal downside surprise in headline US inflation measures preserves uncomfortably excessive trends, even without a significant tariff shock and with ongoing airfare falls.
• Companies may have helpfully smoothed out the tariff shock such that volatile policy never hits consumers. Services (ex-shelter) continued to grow too rapidly for rate cuts.
• Being in the right ballpark of the target isn’t good enough when the labour market remains tight. At least core price and wage inflation in the US isn’t as bad as in the UK.

By Philip Rush

Oil: How Low Will It Go?

• Riyadh’s acceleration in unwinding cuts to oil output is now widely seen as a drive to squeeze out high-cost producers, especially US shale. However, no matter how low the price of crude oil goes, tariff-related economic uncertainties make success no more certain than it was in 2014-16.

By Alastair Newton

Trading Inside Trump’s Collar

• Market volatility is closely tied to US politics, where unfriendly measures can cap equity prices, while reversals limit potential falls, creating a political floor and ceiling.
• Attempts to avoid all losses lose relevance if they can reverse swiftly. Hedging against falls in the SP500 beyond recent lows better matches the risk of a recessionary crash.
• Selling year-end upside above 5750 covers the insurance cost and nets a 3.8% return, with price losses and gains capped at 7% and 6.4% by this “Trump Collar” strategy.

By Philip Rush

US: Policy Rate Held At 4.5% (Consensus 4.5%) in May-25

• As expected, the Federal Reserve held the policy rate steady at 4.25%–4.50%, citing increased uncertainty and elevated risks to inflation and employment.
• Core PCE inflation remains above target at 2.6%, with recent tariff increases raising near-term inflation expectations and clouding the outlook.
• The Fed remains in wait-and-see mode, with future policy shifts contingent on how evolving trade and fiscal policies affect inflation persistence and labour market stability.