Euro Area Inflation Tops 3.0% For First Time Since 2023, Cementing ECB Rate Hike
Euro Area inflation topped 3% for the first time since September 2023, further cementing expectations for a rate hike when the ECB meets next week.
Consumer prices rose 3.2% from a year ago in May, and up from 3% the previous month, in line expectations. But core inflation, which excludes volatile items like food and energy, jumped more than anticipated to 2.5% (technically 2.55%), while the closely watched services gauge jumped to 3.5%, the highest since last November, and non-energy industrial goods inflation printing at 0.87%YoY.
Energy inflation increased to 10.9%YoY, while food, alcohol and tobacco inflation fell to 1.97%YoY, notably below the weak 2.2%YoY Goldman was expecting.
“The acceleration of headline and core inflation in May cements the case for a 25 basis-point rate increase from the ECB next week. Those moves have been driven by services prices, which have probably been pushed up by pass-through from oil prices. That may be used by the hawks on the Governing Council to argue broad-based inflation requires a follow-up move in September” said Bloomberg economist David Powell.
Incorporating the May flash release into the Euro area inflation path, but also accounting for the potential Easter-related nature of the outsized move in services which should not be fully persistent, Goldman’s medium-term path continues to show core inflation at a weak 2.5%yoy in 2026, peaking at 2.7%yoy in 2027Q2 before gradually declining to 2.0%yoy in 2028Q4, above the ECB staff March projections. As for headline inflation, Goldman expects it to peak at 3.4%YoY in Q4, using the bank’s latest baseline path for gas and oil prices.
The latest hot inflation print has cemented the ECB’s first rate hike since September 2023 on June 11, with officials appearing to conclude that they can no longer wait to respond to the fallout from the Middle East conflict. ECB rate hike odds are now at 98% on Polymarket. They’re worried chiefly about workers demanding steep pay rises and firms boosting selling prices, viewing such consequences as probably now inevitable as the war drags on.
Most policymakers, however, remain cautious on the path beyond June according to Bloomberg, as growth in the region’s 21-nation economy also takes a hit. Business activity shrank in May at the quickest pace since 2023.
ECB Executive Board member Isabel Schnabel, viewed as the most hawkish Governing Council member, suggested Monday that it’s too early to specify how many rate increases may be needed. Lithuania’s Gediminas Simkus has said a second move after June “is more likely than not,” though it’s unclear when.
“It’s quite important to react in a timely manner to this emerging inflationary environment so we can prevent a possible acceleration of inflation and the inflationary spiral, prevent it at its very beginning with the least possible impact on the economy,” Simkus said Tuesday in Vilnius.
His Finnish counterpart Olli Rehn described inflation expectations as still anchored so far, but said action is needed this month to keep prices under control. “While inflation risks have increased, a rate increase in June would be an insurance one, but not due to entrenched inflationary pressures,” he said in a speech.
Today’s CPI print should not have been a major surprise: data last week showed inflation gathering pace in three of the bloc’s biggest member states, and remaining well above the ECB’s 2% target in all of them. Propelled by the war-induced surge in energy costs, May readings for France, Italy and Spain quickened to 2.8%, 3.3% and 3.6%, while the headline number for Germany moderated to 2.7%.
Voters in six states will go to the polls today for a series of key races.
The biggest item of the night will be the litany of races in California, the nation’s largest state. Others will be held in Iowa, Montana, New Mexico, New Jersey, and South Dakota.
Here are the most important races to watch.
California Governor
The race to replace outgoing Gov. Gavin Newsom is one of the most-watched in the nation.
California’s gubernatorial elections are designed to be nonpartisan. With about six candidates polling with at least 5 percent support, only the top two vote-getters will be on the general gubernatorial election ballot in November, even if both are of the same party.
In the final weeks leading into the primary, the election underwent a total shake-up when front-runner Rep. Eric Swalwell (D-Calif.) left the race – and Congress – following multiple allegations of sexual harassment and sexual assault. Swalwell has denied the allegations.
Currently, the Democratic front-runners are former U.S. Secretary of Health and Human Services Xavier Becerra and billionaire Tom Steyer. The two are polling close, although Becerra retains a slight advantage.
The main Republican candidates in the race are Steve Hilton, a British American TV show host and conservative commentator, and Riverside County Sheriff Chad Bianco.
Polling leaves it unclear whether Hilton or Steyer is favored for second place.
Los Angeles Mayoral Primary
Residents of Los Angeles will also vote in the nonpartisan mayoral primary.
Incumbent Mayor Karen Bass is facing off against 10 other contenders. She is expected to win the top spot in the primary.
Meanwhile, the top Democratic contender for the second-place spot – member of the Los Angeles City Council Nithya Raman – is seeking to hold off a challenge from former reality TV star Spencer Pratt, running as a Republican, and make it to the general election.
California’s 22nd Congressional District
In California’s 22nd Congressional District, Rep. David Valadao (R-Calif.) will face off in a nonpartisan primary with state Rep. Jasmeet Bains and Randy Villegas, both Democrats.
Valadao is expected to win a place in the general election, although his final opponent will be decided by the outcome on June 2.
Polling in the district is sparse. A single poll conducted at the beginning of May by Data for Progress, a left-leaning pollster, showed Valadao with 44 percent support, Villegas with 25 percent, and Bains with 21 percent.
California’s 48th Congressional District
In California’s 48th Congressional District, a flurry of candidates have put their names into the ring.
Republican Jim Desmond leads in polls in the nonpartisan election, with fellow Republican Kevin O’Neil coming in second in some polls. Marni von Wilpert and Ammar Campa-Najjar are the Democratic front-runners.
The seat was one of five redrawn to favor Democrats last year – but that advantage only holds if a Democrat wins the nonpartisan primary.
California’s 11th Congressional District
In California’s 11th Congressional District, a slate of Democrats is competing to replace outgoing Rep. Nancy Pelosi (D-Calif.).
Most polls show a lead for candidate Scott Wiener, a Democrat, while Pelosi has endorsed San Francisco Supervisor Connie Chan. Chan has come in second in some polls, and Wiener enters the primary as the clear front-runner.
The two Republicans in the running – when they have made it into the polls at all – have pulled less than 5 percent support.
Iowa Senate
Although Iowa has long been a lock for Republicans, it is among Democrats’ targets this year, as there are indications that the party could flip Senate seats previously considered safe. This year, Sen. Joni Ernst (R-Iowa) will not be seeking reelection, leaving the seat open.
Polls indicate that Rep. Ashley Hinson (R-Iowa) is favored for the Republican nomination over her rival, state Sen. Jim Carlin.
Iowa’s gubernatorial race is open after Gov. Kim Reynolds, a Republican, announced that she would not seek reelection in 2026.
Several Republicans are contending for the nomination to replace her. The polls show that candidates Rep. Randy Feenstra (R-Iowa), Zach Lahn, and Adam Steen are leading in that race. On the Democratic side, only state Auditor Rob Sand is running.
A general election poll conducted in April by Echelon Insights, a Republican-aligned pollster, found that Sand had 51 percent support against Feenstra, who was polling at 39 percent.
Montana Senate
In Montana, the last-minute exit of Sen. Steve Daines (R-Mont.) from the race left Republican challengers little opportunity to register against former U.S. Attorney Kurt Alme, who registered for the GOP nomination just as Daines exited the race.
On the Democratic side, no polls have been conducted, leaving it unclear who is in the lead for the nomination.
As recently as 2024, the state was represented by Sen. Jon Tester, a Democrat. Some general election polls have shown 44 percent support for a generic Democrat.
New Mexico Governor
In New Mexico, Democrat and former U.S. Secretary of the Interior Debra Haaland is highly favored to win the Democratic nomination in the blue-leaning state, which some Republican strategists had eyed as a potential target in 2024.
On the Republican side, Gregg Hull narrowly leads Doug Turner in polls for the nomination.
New Jersey’s 7th Congressional District
One of the two top targets for Democrats in New Jersey is the seat of Rep. Tom Kean (R-N.J.).
Rebecca Bennett, a former Navy helicopter pilot, is favored to win the nomination, leading in most polls. Her closest rival is Brian Varela.
New Jersey’s 12th Congressional District
In New Jersey’s 12th Congressional District, incumbent Rep. Bonnie Watson Coleman (D-N.J.) is retiring, leaving open a safely Democratic seat in a district where the primary essentially is the general election.
The race has exposed ideological rifts in the Democratic Party.
Leading the progressive side in the race is Dr. Adam Hamawy, a Princeton trauma surgeon and Army veteran with endorsements from progressive heavyweights such as Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.).
The main other contenders for the Democratic nomination include East Brunswick Mayor Brad Cohen, state Rep. Verlina Reynolds-Jackson, and Somerset County Commissioner Shanel Robinson.
Shocking JOLTS: Job Openings Soar By 731K, 9-Sigma Beat, As Quits Bizarrely Plunge To 6 Year Low
We had to do a double take when the BLS reported today’s JOLTS job openings: with consensus expecting no change from last month’s print of 6.866MM, and near the lowest in two years, moments ago a flashing red headline revealed that in April the US added a stunning 731K jobs to 7.618 million, up from an upward revised 6.887 million, and up 520K from a year ago.
For context, this was a 9 sigma beat to expectations, the biggest beat in history.
WTF!?… and how is this possible at a time when companies are mass laying off thanks to AI? Well, according to the BLS,the number of job openings increased in professional and business services (+668,000), and also rose in manufacturing, manufacturing, and – alas – government. Jobs stumbled in finance and insurance (-135,000).
This was the biggest monthly increase in professional and business services by a huge margin. It wasn’t clear what exactly job category prompted this surge.
Meanwhile, the draining of the swamp appears to be officially over with government jobs jumping by 47K to 777K, the biggest monthly increase this year.
The historic surge in April job openings, coupled with the modest increase in unemployed workers means that after 9 months of labor surplus, there were 245K more job openings than unemployed workers in April, a reversal to the “deficit” regime observed since last July.
The surge in openings also means that after falling back to 0.9x in March, in April the ratio of job openings rose back to 1.0x and was the highest since January 2025.
But while the job openings number was a shock, this month we saw a reversal of last month’s surge in hires and quits, and in April both the number of Quits and Hires, tumbled once more. Specifically, hires plunged by 419K to 4.899 million, while quits – or the “take his job and shove it” indicator – plunged by 183K, or 5.8%, to 2.977 million, the lowest since 2020 and the biggest percentage drop since April 2025, as Americans are suddenly allergic to leaving their jobs on their own.
It goes without saying that a surge in job openings even as nobody is leaving their jobs, leads one to scratch their head just what is going on here, besides data massaging of course.
In any case, since this hires number feeds directly into the payrolls calculations (after netting out separations) this explains why the April payrolls report slumped to 115K from 185K in March.
Overall, this was a shockingly strong JOLTS report – so strong in fact one wonders who at the BLS had a fat finger incident when calculating the professional and business services job openings, and shows that after some significant weakness in late 2025, US labor market has continued to stabilize in early 2026. Of course, the report also lags the payrolls report by a month, which is why it gives us little insight into what Friday’s jobs report will be.
Russia Unleashes Its Threatened Mass Bombardment: At Least 18 Killed, Over 100 Wounded Across Ukraine
The Kremlin spent much of the last week warning foreign diplomats and bystanders to evacuate Ukraine’s capital, warning that an escalation in airstrikes is imminent, in response to Ukraine’s own drone swarms sent against Moscow and other Russian sites last month – especially the Starobelsk dormitory attack.
“In response to terrorist attacks by the Kyiv regime, the Russian Armed Forces launched a large-scale strike using long-range, high-precision air, land and sea-based weapons — including hypersonic aero-ballistic missiles and attack drones,” the Russian Defense Ministry (MoD) said in a statement. “The objectives of the strike were achieved. All designated targets were hit,” it added.
In the wake of these devastating overnight attacks, Ukraine is reporting that at least 18 people were killed and over 100 more wounded. The hours-long assault was clearly one of the biggest and deadliest of the last year or more.
Ukraine’s air force tallied that over 640 drones were sent and 73 missiles were fired on various cities, including Kyiv, and Dnipro, as well as several eastern cities, including Kharkiv and Zaporizhzhia. Ukraine claims it intercepted the majority of these, but still dozens of projectiles made it through to impact.
Kyiv Mayor Vitali Klitschko later confirmed that six people were killed in the Ukrainian capital and that at least 66 others, including two children, were wounded.
There was mayhem as people fled to shelters during the nighttime “mass enemy attack”. The mayor had warned while it unfolded: “Explosions in the city. Air defense forces are working! Stay in shelters!”
Central Ukraine’s Dnipropetrovsk region also saw high casualties, with at least 12 people killed and 36 others wounded. The regional governor reported that children were among the injured.
Moscow has not owned up to inflicting civilian casualties in the fresh overnight assault, but has instead framed this as part of its previewed “systematic and consistent strikes” on Ukraine’s military infrastructure.
President Putin and top military brass had last month said strikes would be initiated against “decision-making centers” in response to the dorm attack in the Russia’s Lugansk People’s Republic on May 22, which killed 21 people – mostly teenage girls – and injured 70 others.
Kremlin officials now say that Russian forces have “a right to dismantle any infrastructure that supports terrorism.”
Russian drones and missiles struck the Ukrainian capital Kyiv and other cities, killing at least 18 people and wounding more than 100, authorities said, following days of warnings about Moscow’s plans for a major assault https://t.co/RZjbJYupmppic.twitter.com/UY6FOwNne7
Despite this clear escalation, peace talks are nowhere on the horizon, also as the White House’s attention is currently fixated on the Iran war and Hormuz Strait crisis. Russia has in the meantime benefited from the Iran crisis, with sanctions relief on its oil exports from Washington, and elevated crude prices.
President Trump is on a daily basis dealing with now largely stalemated back-and-forth diplomatic messaging with Tehran, and so the persistent Ukraine war seems to have taken a far back seat in terms of administration priorities.
Tencent Soars Most Since 2022 On Report It’s Set To Launch AI Agent For China’s Most Used App
Tencent shares jumped the most since late 2022 after an FT report that the Chinese company was testing a prototype AI agent for WeChat, China’s most widely used app for everything from messaging and social media to ride-hailing and payments, fueled optimism about the company’s artificial intelligence efforts.
The Chinese internet giant plans to begin a compliance process for a public launch of the agent as soon as this month, the Financial Times reported, citing sources. After that, Tencent plans to test the agent on a small group of outside users before initiating a phased rollout, the newspaper said.
Shares of Tencent closed up 10.5%, its biggest jump since November 2022, with turnover at the highest in more than a year. The stock gave a boost to the Hang Seng Tech Index, which rose 4.7%.
Users will be able to access the chat box for the AI agent by swiping right on the main WeChat screen, according to a person who has seen an early demonstration. They can then enter instructions for the agent to automatically tap into WeChat’s millions of mini-apps, the bedrock of the app’s broad functionality, and complete tasks such as finding a café and ordering a drink based on certain flavor and price requirements.
A successful introduction of an AI agent for the popular WeChat service would mark a step forward for Tencent’s bid to catch up to rivals in the rapidly emerging technology. While Tencent has vowed to at least double investments in the field to more than 36 billion yuan ($5.3 billion) this year, it trails peers like ByteDance and Alibaba in both user adoption and advances in developing state-of-the-art large language models.
“Tencent has been a huge underperformer this year because market perceives it as an AI laggard,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “The AI agent, if successful, could change such a perception. Even though there’s very little detail right now, we know Tencent has a huge ecosystem to make it work.”
According to Citigroup, while the adoption of an AI agent in WeChat had been anticipated by the market, its earlier-than-expected timing likely prompted the positive share price reaction.
Goldman’s Graham Ambrose cautions that it’s still not clear how this will evolve and the market is so far unconvinced on Tencent management’s explanation of their strategy to confront the challenge.
The infrastructure was upgraded in March
The Hunyuan 3.0 foundation model powering the agent was launched in April
A Developer Beta recently started
The pilot launch is planned for June for Weixin users
The broad roll-out is expected to be in Q3 (not confirmed by management yet) with full integration across the domestic Weixin app, including deep “AI Search” and “Agentic Pay” features.
The news sparked a major move higher in Chinese stocks: in addition to Tencent developments, a slew of positive drivers including Meituan’s earnings and upbeat delivery figures by electric vehicle makers supported the Hang Seng Tech Index. Other internet and e-commerce heavyweights such as Alibaba and JD.com Inc. rose more than 6% as sentiment improved.
The rebound comes after the gauge, with its reliance on Chinese internet giants, has trailed the blistering surge in tech hardware-heavy benchmarks such as South Korea’s Kospi and Taiwan’s Taiex this year.
Prosus NV, Tencent’s biggest shareholder, jumped as much as 11% on Tuesday in Amsterdam. Its parent company Naspers rose at a similar pace in Johannesburg trading.
“Tencent’s move potentially shifts the China AI story from model development to real consumer distribution,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “It’s still too early to say, but if WeChat can integrate an AI agent into a platform with around 1.4 billion users, that gives investors a clearer path to usage, engagement and eventually monetization.”
Bloomberg notes that even with Tuesday’s rebound, Tencent remains down about 20% for the year. Options suggest some investors are making bets on a further recovery after Tuesday’s rally, as China is about to get its own gamma squeeze. Trading of bullish options on Tencent surged to a record high, with more than 430,000 calls changing hands against 177,000 puts.
The four most-active contracts in Hong Kong were Tencent calls, and those with an exercise price 10% above Tuesday’s closing price led the pack. Meanwhile, the cost of hedging against declines in the next three months plunged to its lowest level in almost a year.
Oil Spikes As Iran Denies Progress Despite Hasty Lebanon Truce: US Talks Halted For ‘At Least A Few Days’
Summary:
Washington has seen the Lebanon partial truce as opportunity enough to press forward on broader talks, with Trump saying he expects a broader Iran deal “over the next week”.
But Fars denies this Tuesday: “exchange of messages between Iran & the US has been stopped for at least a few days” on MOU.
In Lebanon, “While the ceasefire appears to be largely holding, there was further violence overnight,” reports BBC, with more dead & wounded on both sides.
Iran Denies Progress, Halt in Talks Still in Effect
State media has belatedly responded to Trump’s Monday claim that talks between the US and Iran are back on. Trump has even said Tuesday that he expects an agreement for an extended ceasefire to take place “over the next week” – along with the reopening of the Strait of Hormuz.
“An informed source says that the exchange of messages between Iran and the US has been stopped for at least a few days for what is called the initial memorandum of understanding between Tehran and Washington,” Fars reports. So this is Iran in effect saying ‘not so fast’ – as it seeks to ‘hold the cards’ and maintain some leverage. Trump has not indicated a willingness to resume bombing the Islamic Republic, but his patience has seemed to be wearing thin over the last several days, as the White House is boxed in to only choosing among several ‘bad options’ in the wake of launching a war of choice 95 days ago.
Oil spikes on the negative news from Tehran, extends:
And more confirmation via newswires:
An Iranian source says there is currently no message exchange with the U.S., contradicting claims of ongoing progress. The source reports talks on an initial understanding have stalled for several days. It also noted Iran’s last communication with Washington concerned Lebanon and drew international attention, despite President Trump stating negotiations are advancing rapidly.
Latest on the Lebanon front:
“American sources for AI Hadath: Proposal for a 60-day plan during which Israel withdraws gradually from southern Lebanon”: AI Hadath reports.
“Negotiations propose the deployment of the Lebanese army and UNIFIL in southern Lebanon after Israel’s withdrawal.”
“Lebanon seeks to resolve Hezbollah’s weapons file politically, but after Israel’s complete withdrawal.”
Lebanon Fighting Persists Amid Nominal Ceasefire
Various regional and international reports have documented serious ongoing fighting in Lebanon, despite President Trump the day prior having declared that the shooting will cease and that Hezbollah and Israel were forging a limited ceasefire. Trump had said of both sides that “they agreed that all shooting will stop” – after Iran announcing it had suspended peace talks with the US over Israeli military action in Lebanon.
Israeli Prime Minister Benjamin Netanyahu did affirm he would adhere to the agreement, and reports say that planned new airstrikes on Beirut were called off, but he also warned the attacks on the capital would go ahead “if Hezbollah does not stop attacking our cities and civilians” – and that forces in the south would continue operating.
BBC has freshly written that “While the ceasefire appears to be largely holding, there was further violence overnight.” The same report details:
Hezbollah said its fighters had targeted Israeli tanks in the southern Lebanese towns of Haddatha and Bayada with missiles and shells. The Israeli military said it had intercepted two projectiles that had been fired from Lebanon in the early hours of Tuesday. No injuries have been reported.
Lebanon’s state-run National News Agency reported Israeli strikes on several southern areas and said a “very violent” explosion from a large-scale demolition rocked the town of Debbine.
Tuesday has witnessed some ongoing attacks on south Lebanon, as well as Hezbollah drone attacks on Israeli troop positions, wounding some. According to some of the latest from Al Jazeera:
Israeli forces have carried out multiple air raids on the city of Nabatieh, one of the largest in southern Lebanon, our colleagues on the ground report. The city, a strategic hub for Hezbollah, has been encircled by Israeli forces in recent days as troops continue pushing north.
Israeli attacks were also reported across the wider Nabatieh district as Israel deepens its occupation of surrounding areas. Drones hit the towns of Kafr Sir and Aabba, while a strike targeted the road leading to Houmine al-Fawqa. The outskirts of Yahmour al-Shaqif were also hit.
There’s also been a lot of explosions in the southern city of Tyre, with Israeli jets active in the airspace above on Tuesday. And rescuers have recovered six bodies from another town, with Lebanese civil defense agency having said in a statement: “Since yesterday evening and continuing until this morning … personnel have been carrying out search and rescue operations in a residential building that was targeted in the town of Marwaniyah – Sidon district.”
Hezbollah’s fiber-optic drone attacks have at the same time not ceased: “Two Israeli soldiers have been wounded in a Hezbollah drone attack in southern Lebanon, the military says, describing their injuries as minor,” Al Jazeera reports Tuesday. This is after “Two other Israeli soldiers were killed over the weekend, also in drone attacks, bringing to 26 the number of soldiers killed since fighting escalated three months ago. Four Israeli civilians have also been killed.”
Impact of Trump’s ‘Steamrolling’ Netanyahu in Monday Call
President Trump’s angry dressing down of Netanyahu may have had very limited effect, it appears. To review, per Axios during a Monday call Trump was reportedly heard cussing at the Israeli leader and essentially ‘steamrolled’ him – angry over breaking the Lebanon truce and demanding that Israel’s military not attack Beirut.
Trump is said to have told Netanyahu “you’re fucking crazy’” while demanding Lebanon truce: “I’m saving your ass,” he also reportedly said. Iran early Monday said it halted talks with Washington because of Israel’s escalation in Lebanon.
There’s been some reaction from Iran to the Axios report, with Iran’s Deputy Foreign Minister Kazem Gharibabadi having remarked, “In this regard, the US president’s claim of having dissuaded Netanyahu from launching a major attack on Beirut is more than a sign of Washington’s peace-seeking, it’s confirmation of America’s direct role in managing the Zionist regime’s aggressions.”
How many times have they sold and resold this same story about Biden and now Trump being secretly VERY VERY mad at Netanyahu https://t.co/uGpSULbhhM
The Iranian official continued to offer Tehran’s vew: “If the decision to attack the capital of an independent state can be changed with a single phone call the main question is: why did months of ceasefire violations, aggression against Lebanon, the displacement of its people, and threats to this country’s sovereignty – backed by Western political and military support – continue unabated?” he remarked.
Mark Levin rages over White House leaks of Trump-Netanyahu call…
Mark R. Levin, a close ally of both U.S. President Donald J. Trump and Israeli Prime Minister Benjamin Netanyahu, appears to confirm the veracity of the report earlier by Axios on today’s heated call between Trump and Netanyahu regarding peace negations with Iran as well as… pic.twitter.com/46qmYBJsJZ
Trump Returns to Optimism: Agreement ‘Over the Next Week’
But Washington has seen the Lebanon partial truce as opportunity enough to press forward on broader talks. While there’s hasn’t been full confirmation from Tehran’s side, Trump has declared the talks as back on:
US President Trump told ABC News he thinks he will have an agreement with Iran to extend the ceasefire and reopen the Strait of Hormuz over the next week, while he also stated that a peace agreement with Iran could be better than a military victory. Trump also stated that it’s not simple for both sides, but they’re getting what they need to get and that he still has to get a few more points.
The very same network points on Tuesday morning:
Israeli and Hezbollah forces continued their attacks on Tuesday despite President Donald Trump’s claim that the warring sides had “stopped shooting each other” after his intervention to prevent escalation on Monday.
Lebanon’s state-run news agency, NNA, reported three Israeli strikes in separate areas in southern Lebanon. One person was killed, NNA reported. ABC News has contacted the Israel Defense Forces to request comment.
So, once again Trump touting the likelihood of a deal to reopen Hormuz by next week seems extremely wishful and ambitious, to say the least. And we’ve heard all this before, and been here many times over the past 95 days of war.
Trump Taps Housing Regulator Bill Pulte As Acting Director Of National Intelligence
President Trump said Tuesday that he is appointing Bill Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac, to serve as acting director of national intelligence after Tulsi Gabbard leaves the post.
Gabbard announced her resignation on May 22, citing her husband Abraham Williams’ recent diagnosis with a rare form of bone cancer. Her resignation is effective June 30, meaning Pulte’s appointment would mark a change from Trump’s earlier statement that Principal Deputy Director of National Intelligence Aaron Lukas would serve as acting intelligence chief after Gabbard’s departure.
Pulte is expected to continue leading the FHFA while serving as chairman of Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that play a central role in the U.S. housing finance system. The arrangement would place a close Trump ally simultaneously near the center of federal housing finance and atop the U.S. Intelligence Community, which is made up of 18 organizations.
“I am appointing the Director of the Federal Housing Finance Agency, and Chairman of Fannie Mae/Freddie Mac, William J. Pulte, to serve as Acting Director of National Intelligence,” Trump posted on Truth Social. “William has deep experience managing the most sensitive matters in America, the safety and soundness of the Markets, and over 10 Trillion Dollars at Fannie Mae/Freddie Mac, a substantial increase from where it was just 12 months ago. During this period, he will remain Director of the Federal Housing Finance Agency, and Chairman of Fannie Mae/Freddie Mac. Congratulations to Director Pulte!”
Pulte, 38, is the grandson of William J. Pulte, founder of PulteGroup, which describes itself as the nation’s third-largest homebuilder. Before entering government, the younger Pulte was known for private-equity work tied to housing and building products, as well as high-profile online philanthropy. He was sworn in as FHFA director on March 14, 2025, after Senate confirmation.
Since taking office, Pulte has turned the FHFA, historically a low-profile housing regulator, into a far more visible political force. His tenure has included board and leadership changes at Fannie Mae and Freddie Mac and public mortgage-fraud referrals involving several Trump critics, moves that have drawn scrutiny from Democrats and watchdogs.
The director of national intelligence position was created after the Sept. 11 attacks to improve coordination across the Intelligence Community. The DNI serves as the head of the U.S. Intelligence Community and as the principal intelligence adviser to the president, the National Security Council and the Homeland Security Council. The community includes the CIA, NSA, DIA, FBI intelligence branch and other military and civilian intelligence elements.
Unlike most past confirmed DNIs, Pulte is not known for a career in intelligence, diplomacy, military command or national-security policy. His selection on an acting basis would put a housing-finance official in charge of coordinating U.S. intelligence agencies during a period of personnel upheaval inside Trump’s national-security team.
Trump Slashes Tractor Tariffs In Bid To Revive Ag Belt Optimism
The Trump administration appears to be trying to inject new optimism across the nation’s farm belt following the China meeting last month, during which Beijing committed to making billions of dollars of new purchases of U.S. agricultural goods. The White House’s latest move is to reduce tariffs on tractors and combines, a policy shift aimed at easing cost pressures on farmers already squeezed by diesel, fertilizer, and machinery costs.
Late Monday, President Trump signed a proclamation slashing tariffs on imported agricultural equipment, including combines and harvesters, from 25% to 15% to lower costs for US farmers and manufacturers.
More color from the White House:
The Proclamation adjusts the tariffs on agricultural equipment, like combines and harvesters, as well as certain other equipment, from 25% to 15%.
The Proclamation also expands the existing category of industrial equipment subject to a 15% tariff to include mobile industrial equipment, like bulldozers and forklifts, when imported from trade deal countries that are entitled to such treatment.
The Proclamation encourages foreign companies to use more U.S. steel and aluminum by allowing them to qualify for a 10% duty rate, if their capital equipment include at least 85% U.S. melted and poured or smelted and cast steel or aluminum by weight.
These tariff changes are temporary, lasting until December 31, 2027, to spur near–term investments that will rebuild the Nation’s industrial base.
The move is a clear attempt by the Trump administration to spur optimism across the nation’s farm belt following China’s commitments last month to purchase $17 billion annually in additional U.S. agricultural goods.
The latest reading of the US ag economy via the Purdue University/CME Group Ag Economy Barometer has been fading from a summer 2025 peak as trade wars and, now, the Gulf-related energy shock hurt farmers’ incomes.
Trump’s directive sent shares of the Japanese agricultural and industrial machinery company Kubota up 5% in Tokyo trading.
Efforts to boost farmer sentiment come ahead of the midterm election cycle, which is gearing up and is only 154 days away.
Governments are terrible at picking winners and even worse at choosing losers. Net zero and interventionist “Keynesian” policies in Canada and the UK have proven that government intervention has created a worse outcome than anyone would have expected. The result is higher costs, distorted incentives, and weakened productivity growth, with increased dependency on fossil fuels to attend to peak demand, exactly what Austrian economists predicted.
What has been sold as a recipe for prosperity and “green growth” has in practice eroded affordability while failing to deliver stronger, sustainable expansion.
It is not surprising to see that the world’s examples of green interventionism, the UK and Canada, have become economic failures. Years ago, some argued that these policies needed time to prove their success. Now, it is not even debatable that the stagnation and recession in the UK and Canada are self-inflicted.
Net zero in Canada and the UK is not a single policy but an entire regime of targets, regulations, limits, subsidies, and new bureaucratic requirements.
The Canadian federal plan to reach net-zero emissions by 2050 combines rising carbon taxes, prescriptive regulations, technology mandates, and public investment schemes intended to steer capital away from fossil fuels and into politically selected “green” projects.
In the UK, the government’s “Net Zero Growth Plan” is also built on regulatory limits, spending commitments, and industrial policy designed to phase out conventional energy and reshape entire sectors through top-down planning.
This is a classic example of interventionism. The state attempts to override market price signals and entrepreneurial judgment to engineer a politically preferred energy and industrial structure and achieves the opposite of what it wants to deliver. Rather than relying on decentralized knowledge, competition, technology, and creative destruction, dispersed among millions of consumers and firms, net zero regimes assume that politicians and regulators know exactly which technologies should win, what the “right” energy mix ought to be, and how fast the transition should occur.
In an open market, prices and profits coordinate production across time, and entrepreneurs interpret prices as signals about real scarcities and consumer preferences. However, net-zero policies deliberately tamper with these signals. Carbon taxes, subsidies, and regulatory mandates change relative prices not because underlying preferences or scarcities changed but because policymakers decided that certain activities should be penalized and others subsidized. All this is justified by a completely ideological and unreliable assumption of externality costs, where governments present themselves as the ones that know precisely what those alleged externality costs are and try to push a pricing signal imposed through ideology, creating enormous distortions that, ultimately, end benefiting the “old” and “loser” industries.
Governments are not worried about the failure of these policies. Bureaucrats always believe that interventionism did not work because there was not enough of it. Therefore, they impose additional burdens and regulations while portraying themselves as the solution to the inflation and stagnation problems they have caused.
In both Canada and the UK, this has pushed vast amounts of capital into projects that are unprofitable and can only subsist due to policy support rather than genuine market demand. “Green industrial strategies” crowd out investment in other sectors, especially in traditional energy and manufacturing, even when those sectors still deliver higher value at lower cost to consumers. Austrian theory predicts that politicized credit and subsidies will generate malinvestment: projects that look viable under distorted interest rates and prices but which fail to cover their costs once the policy support is withdrawn or the fiscal burden becomes unsustainable.
Canadian long-run productivity growth has fallen from annual rates above 3% in the postwar decades to less than 1% since 2000, despite repeated waves of policy activism and “pro-productivity” rhetoric. Chronic underinvestment in business capital and weak technological progress as key drivers of this decline, suggesting that the policy mix has not created an environment for genuine, bottom-up innovation. The more that investment decisions depend on regulatory favor and subsidy access, the less they depend on entrepreneurial assessment of consumer wants and long-term profitability.
Net zero has also harmed affordability in exactly the way Austrian economists would expect when governments interfere with relative prices. Carbon pricing, renewable mandates, and restrictions on fossil-fuel projects increase energy costs directly by making reliable sources of power more expensive or scarce. These higher input costs then cascade through the economy to transport, food, housing, and manufactured goods, eroding real wages and living standards.
In both Canada and the UK, affordability has become a central political issue. Households face higher utility bills, fuel costs, and housing expenses, while governments insist that the transition is “pro-growth” and “pro-jobs.” From an Austrian viewpoint, this contradiction is unsurprising: when the state deliberately raises the cost of dominant energy sources and limits investment in efficient, market-chosen technologies, the outcome is necessarily higher prices and reduced real income for consumers, especially for low- and middle-income households.
The C.D. Howe Institute has calculated the costs of justifying public “stimulus” projects based on their benefits, showing that a typical public-services stimulus in Canada needs to create at least 73 cents in benefits for every dollar spent, while many infrastructure projects must improve productivity by at least 61 cents per dollar just to be socially acceptable. This illustrates how difficult it is for discretionary fiscal programs to deliver genuine, net productivity gains, especially when they are designed around political objectives like net zero rather than around consumer demand.
Loose money, loose budgets, weak growth
Energy policy is just one aspect of the overall narrative. Canada and the UK have also pursued aggressively expansionary fiscal and monetary policies recently, justified in the language of Keynesian stabilization and “stimulus.” Central banks slashed interest rates and expanded their balance sheets, while governments ran large deficits to finance transfer programs, public investment packages, and targeted subsidies.
Such policies create an artificial boom by pushing interest rates below their market level, encouraging borrowing and investment that are not backed by genuine savings. When combined with interventionist climate and industrial policies, the result is a double distortion: not only is the cost of capital suppressed by central banks, but its allocation is further skewed by political targets and bureaucratic criteria.
The persistent weakness of productivity growth in both countries reflects the outcome. Despite waves of stimulus and intervention, neither Canada nor the UK has returned to the trend growth rates of earlier decades. Research on why productivity is stuck in advanced economies shows that slow business investment, poor use of resources, and uncertain policies are major problems—exactly what Austrian theory warns about when governments try to control demand and manage entire industries.
At the same time, the loose monetary and fiscal stance has fueled asset inflation and housing booms, worsening affordability while doing little to raise real wages in line with living expenses. For Austrians, this pattern is predictable: credit expansion inflates asset prices and encourages leverage, while deficit spending diverts resources from productive private activity toward politically selected uses, without solving underlying structural obstacles to innovation and entrepreneurship.
The “dynamics of interventionism” described by Austrian scholars such as Frank Shostak and Huerta de Soto captures what is now playing out in Canada and the UK. Initial interventions—carbon pricing, subsidies, ultra-loose money—create side effects such as higher energy costs, misallocated capital, and inflationary pressures. Rather than rolling back the original policies, governments respond with further interventions: price caps, windfall taxes, rent controls, targeted transfers, and new stimulus packages.
More layers mean more complexity, uncertainty, and lobbying, which sucks talent and capital out of productive activity and into regulatory arbitrage and rent-seeking. In the end, the private sector becomes less about serving consumers and more about navigating the policy maze, bidding for subsidies, and changing business models based on political risk, not market signals.
This process tends to push mixed economies toward either more radical intervention and taxation, because the accumulating distortions and contradictions become unsustainable. Rising public debt, chronic productivity stagnation, and growing discontent over affordability are all signs that the current policy mix in Canada and the UK is reaching such a breaking point.
An Austrian approach to the problems of growth, productivity, and affordability in Canada and the UK would start from the opposite principle: radically reduce the role of the state in credit allocation, industrial planning, and energy choices. The goal would be to restore genuine price discovery in interest rates, energy markets, and capital allocation, rather than using central banks and fiscal policy to engineer demand and support politically favored sectors.
That would require ending the “permanent emergency” stance in monetary policy and allowing interest rates to reflect real-time preferences and savings, rather than central-bank discretion; rolling back net zero mandates, technology bans, and targeted subsidies allow entrepreneurs and consumers to decide which energy sources and technologies best serve their needs at the lowest cost; and moving from government spending based on political choices to a system with clear rules and less government involvement that safeguards property rights, upholds contracts, and maintains low and steady taxes and regulations.
Under such a regime, capital would no longer be herded into fashionable, subsidy-dependent projects. Instead, entrepreneurs would once again be guided by undistorted profit and loss, discovering the production structures that genuinely align with consumer preferences and technological realities. Over time, such an approach is the only path consistent with higher productivity, faster real wage growth, and true improvements in affordability.
In short, the disappointing growth and deteriorating affordability in Canada and the UK are not market failures; they are the predictable result of layering net zero interventionism on top of already inflationary, deficit-driven macro policy. The solution is not more of the same but a decisive shift back toward sound money, fiscal restraint, and genuine economic freedom.
Tesla Posts Strong Registration Growth Across Europe In May
Tesla showed signs of regaining momentum in Europe during May, posting strong registration growth across several major markets, according to Reuters. New registrations climbed to 1,750 vehicles in Denmark (+136%), 1,690 in Spain (+113%), and 858 in Sweden (+71%), based on data released by local industry groups.
Reuters writes that the trend extended across the region. Norway recorded 3,345 Tesla registrations, up 29% from a year earlier, while France saw registrations rise to 5,446 vehicles—more than seven times last year’s level.
The gains come as demand for electrified vehicles continues to strengthen across Europe. Battery-electric, plug-in hybrid, and hybrid vehicles represented more than two-thirds of all new registrations in April, with total electrified vehicle registrations increasing roughly 21%, according to ACEA.
Industry observers note that Tesla is benefiting from the overall expansion of the EV market, particularly in Scandinavia, while countries such as Spain are beginning to catch up in adoption. Consumer incentives, emissions-focused policies, and elevated fuel prices are also helping accelerate the shift toward electric mobility.
The recent improvement follows a difficult period for Tesla in Europe. The company lost a significant share of the regional market in 2025 as competition intensified—especially from Chinese manufacturers—while a limited refresh cycle and controversy surrounding CEO Elon Musk also weighed on demand. Registration figures from Germany and the UK, Europe’s largest auto markets, are still to come.
