Trump Bets Economic Pain Will Finally Force Iran to Reopen Strait The administration hopes pressure on Iran’s oil industry will increase the longer the blockade endures

(…) U.S. officials said Thursday that the blockade, initially focused on ships headed to and from Iranian ports, would expand to cover all so-called shadow-fleet vessels that serve Iran’s oil exports. The Pentagon said it was prepared to board those ships wherever they are in the world. (…)

In as little as two to three weeks, Iran could hit a moment known in industry parlance as reaching “tank tops”—essentially running out of room to store the oil it is pumping out of the ground—according to Vortexa, Kpler and Energy Aspects, which track the industry.

Data on the exact size of Tehran’s oil facilities is opaque, and other analysts have suggested Iran could have more flexibility.

Iran’s response to the blockade has so far been muted. It is possible that Tehran feels it can absorb the pain of a prolonged oil shutdown, just as it withstood the military assault and the killings of its top leaders. (…)

Under what the administration calls Economic Fury—an echo of the broader Operation Epic Fury—the Treasury Department said this week that it wouldn’t renew a short-term oil waiver allowing the sale of sanctioned Iranian oil expiring Sunday.

The department also targeted an illicit oil-smuggling network run by Iran’s elite, sanctioning more than two dozen people, companies and vessels. The Treasury threatened sanctions against global banks aiding Tehran.

The U.S. blockade applies to “all ships, regardless of nationality, heading into or from Iranian ports,” Gen. Dan Caine, chairman of the Joint Chiefs, said Thursday. The operation would pursue any Iranian-flagged vessel or any vessel attempting to provide material support to Iran, he said. (…)

Tankers that make it through the blockade can still be loaded, even if they remain trapped in the Gulf, stretching Iran’s tank-tops deadline. Satellite imagery showed three tankers capable of carrying 5 million barrels of oil loading on Kharg Island, Iran’s oil export hub, according to TankerTrackers.com, a research firm.

Iran also has roughly 160 million barrels of Iranian oil already loaded on tankers at sea, Vortexa estimates. Some of it floats outside the Gulf near buyers in Asia, allowing Iran to sell oil for weeks even if it starts cutting production. (…)

Iranian onshore storage—with a capacity of up to 120 million barrels—is currently over half full. At current export rates, that space would be exhausted in less than three weeks, Bronze said.

If those tanks top out, Tehran will be forced to shut in active wells—a drastic measure risking permanent infrastructure damage. (…)

Windward:

U.S. Central Command has confirmed that at least eight Iran-linked oil tankers have been intercepted since the start of the blockade. In each case, vessels were contacted via radio and instructed to reverse course, with full compliance and no need for boarding actions.

The blockade is being enforced against vessels of all nationalities entering or departing Iranian ports, with U.S. forces maintaining maritime superiority and actively monitoring compliance. More than 15 warships and additional personnel have been deployed to support enforcement.

This confirms that the blockade is operational rather than decelerative, with early-stage enforcement already altering vessel behavior without escalation.

Iranian oil exports remain structurally active, despite the enforcement environment.

As of April 15, approximately 153.7 million barrels of Iranian oil are on the water, with 84.9% destined for China. Average daily export volumes from Kharg Island between February and April remain elevated at approximately 2.04 million barrels per day.

Satellite and AIS analysis confirms at least two VLCC departures from Kharg Island immediately surrounding the start of the blockade. Two Iranian-flagged VLCCs, each loaded with approximately 2.01 million barrels, are bound for Dongjiakou, China.

These patterns confirm that Iranian export flows remain active, supported by both physical loading and deceptive shipping practices. (…)

These observations confirm continued reliance on dark operations, fraudulent flagging, and concentrated loading activity to sustain export flows. (…)

The operating environment is defined by active enforcement alongside ongoing evasion and selective continuation of maritime trade, with pressure building across both physical and financial domains.

But who’s economic pain?

• Imminent energy shortages in parts of the world and for the rest, significantly higher prices. The battle for the physical barrel has begun. (@ericnuttall)

• Europe could run out of jet fuel in 6 weeks, IEA warns

(…) “In April, there is nothing,” Birol said last month. “The loss of oil in April will be twice the loss of oil in March. On top of that you have LNG and others. It will come through to inflation, I think it will cut economic growth in many countries, especially emerging economies. In many countries the rationing of energy may be coming soon.” (…)

• Trump Says Iran Deal Getting Closer as Lebanon Truce Starts

(…) Trump said it may not be necessary to renew an April 7 truce with the Islamic Republic before it expires next week, defying expectations that an extension will be needed to allow more time for diplomacy.

“Iran wants to make a deal. They are willing to do things today that they weren’t willing to do two months ago,” the president told reporters on Thursday. “We have a very successful negotiation going on right now. If it happens, it will be announced fairly soon.”

Some leaders in Arab states in the Persian Gulf and Europe expect it will take about six months to agree to a peace accord and that the ceasefire should be extended to cover that period, according to officials familiar with the matter, who asked not to be identified discussing private talks. That’s in part to allow for a reopening of the critical Strait of Hormuz waterway, they said.

Iran has yet to comment on Trump’s claims that Tehran has made concessions, including over the key issue of its nuclear program. The US leader reiterated that the Islamic Republic “will not have nuclear weapons,” and pushed back against suggestions that a fixed-term moratorium on uranium enrichment is up for negotiation. (…)

“They’ve agreed to almost everything,” Trump said. “They got to get to the table with a pen.”

Comments from both Iranian and US officials on Thursday suggest the sides remain far apart on key issues, but the ceasefire with Lebanon could provide fresh momentum. Iran’s Parliament Speaker Mohammad Bagher Ghalibaf, who took part in the Pakistan talks, had earlier said a permanent ceasefire must cover the fighting in Lebanon.

The Middle East crisis has been ongoing for too long to leave no mark on the global economy

Too many essential raw materials have therefore been stuck in the Persian Gulf for too long for global growth not to be affected in some way. Starting with oil, whose production has been reduced by about 13 million barrels per day since the start of hostilities—the equivalent of about 15% of global production. Unsurprisingly, OPEC countries have been hit the hardest, recording a record drop in production in March.

While this decline certainly led to a rise in crude oil prices, the worst case scenario has not materialized—at least not yet. In fact, benchmark prices have even fallen in recent days. It should be noted, however, that the futures contracts most closely watched to track oil price movements do not necessarily reflect the full extent of current supply issues. Indeed, the significant backwardation currently characterizing oil markets forces buyers seeking immediate delivery to pay a premium over these futures contracts.

Combined with rising transportation costs, this spread has put pressure on refiners’ profitability, prompting many to cut production. This shortfall, exacerbated by a decline in production capacity in the Middle East itself—due to attacks on certain refining sites or a shortage of inputs—and by already low international inventory levels prior to the start of the conflict, has resulted in a much sharper rise in the price of refined products since the crisis began.

Several other raw materials, whose importance to the proper functioning of the global economy is far from negligible, also depend on the free flow of maritime traffic through the Strait of Hormuz. These include other energy products, such as natural gas; essential raw materials, such as helium and aluminum; fertilizers such as sulfur, ammonia, and urea; and petrochemicals indispensable for the manufacture of plastics, such as naphtha, polyethylene, polypropylene,
and methanol. Difficulties in supplying these products could eventually put upward pressure on consumer prices worldwide. (…)

Geographically speaking, Asian and European countries are likely to be hit hardest, given their heavy reliance on energy exports from the Middle East. (…)

Data centre delays threaten to choke AI expansion Almost 40% of such builds in US risk hold-ups, including projects tied to Microsoft and OpenAI

Delays to a swath of new US data centres threaten to slow the rollout of AI by the world’s biggest tech companies, with almost 40 per cent of all projects due this year at risk of falling behind schedule.

Major projects for Microsoft, OpenAI and other tech groups are likely to miss completion dates by more than three months, according to data shared with the FT by SynMax, a satellite and AI analytics group.

More than a dozen industry executives said campuses targeting hundreds of megawatts are being held up by permitting hurdles and chronic shortages of labour, power and equipment.

The bottlenecks are emerging as a key constraint on how quickly companies can turn vast spending on AI into revenue, raising concerns that billions in planned investment will take longer than expected to generate returns.

Hyperscalers are racing to build ever-larger data centres, pushing to bring facilities online that will draw at least 1 gigawatt of electricity — roughly a nuclear reactor’s output. (…)

OpenAI said: “Our historic data centre build-out is on schedule and we will accelerate from here. In partnership with Oracle, SB Energy and a broader ecosystem of partners, we are delivering rapid progress in Abilene, Shackelford County and Milam County in Texas.”

Oracle said: “Each data centre we’re developing for OpenAI is moving forward on time, and construction is proceeding according to plan.”

SB Energy said: “The Milam County Data Center is on schedule and on pace to be one of the fastest data centres of its kind ever delivered.” (…)

Satellite imagery shows land cleared for six planned facilities, but as of early April only one showed signs of development. SynMax estimates the earliest possible delivery date for the first building is December, while a timetable in line with most comparable projects would push it out to late 2027.

Other OpenAI-linked campuses also appear to be progressing slowly. In Milam County, Texas, where Greg Brockman last month said a 1.2GW site was “taking shape”, satellite imagery shows construction has begun on only one facility. Of the group’s major Texas projects, only one in Abilene is expected to complete this year. (…)

Two construction executives working on OpenAI-linked projects said there were not enough specialist workers, from electricians to pipe fitters, to meet demand across the build-out as companies race to construct clusters of increasingly large and complex facilities.

Strained grid capacity and shortages of equipment such as gas turbines and transformers are also causing delays. Remote locations are pushing labour costs up as much as 30 per cent, they added. (…)

Nebius said: “All capacity tranches under our agreement with Microsoft to date have been delivered on time, and we currently expect to deliver the remaining tranches on schedule. As of now we are not aware of issues that would materially affect this.”

Satellite imagery suggests the latest phases of the project are progressing more slowly, with structures in place but timelines slipping. Thermal imagery taken at the site indicates that equipment has yet to come online.

SynMax estimates more than 60 per cent of projects scheduled for next year have yet to begin construction, adding to concerns over delays to the industry’s expansion pipeline. (…)

FYI:

• “Weekly initial unemployment insurance claims continue to confirm that layoffs remain historically low. For the week ended April 11, they fell 11,000 to 207,000. Continuing claims edged up slightly to 1,818,000, but the four-week moving average declined to its lowest reading since June 2024, suggesting that hiring activity may actually be improving. That would not surprise us because corporate profits is at a record high. Profitable companies tend to increase their payrolls.” (Ed Yardeni)

China to Commission Seven Nuclear Reactors in 2026, CCTV Says

Seven nuclear power reactors are scheduled to be completed and commissioned in China this year, state broadcaster China Central Television reported, citing the nation’s atomic energy organization’s annual report.

China currently operates 60 commercial nuclear reactors, with 36 units under construction — including two that started this year — the world’s largest build-out, according to the report.

The government last month set a goal of 110 gigawatts of nuclear capacity by 2030 in its latest five-year plan draft, a 76% jump from the end of last year. The lofty target underscores the priority Chinese leaders have placed on the around-the-clock reliability of nuclear’s carbon-free electricity.

Small Business Checkpoint: One shock after another

Bank of America aggregated credit and debit card data shows gasoline spending per small business client rose 23% YoY in March – the strongest increase in several years – after declining over the previous two months. (…)

In Bank of America small business payments data, small wholesalers’ costs associated with inventory (i.e. distributors, truck/freight logistics and other delivery services) surged 62.6% YoY in March – the single largest monthly gain since the start of our data series in 2020.

This surge is echoed in the latest NFIB report, with the number of owners planning inventory investment in the coming months reaching the lowest level since May 2024. Additionally, of the small cohort of firms who pay tariffs directly, these payments were up almost 95% from the 2024 average level in March.

One silver lining may be that these payments are starting to fall, and, according to BofA Global Research, lower tariff rates following the Supreme Court’s reversal of tariffs imposed with the International Emergency Economic Powers Act are helping offset some of the pain at the pump. Still, compared to large companies, smaller firms are unlikely to feel relief in the near-term.

 

Payroll payments growth per small business client remained negative in March, marking three consecutive months of declines – the first such result in our series since 2021.

During this week’s earnings call, BofA CEO Brian Moynihan said that “BofA customers spent 6% more via credit and debit cards in the first quarter than they did in the same period a year earlier, reflecting a degree of confidence in their financial standing”, a statement relayed by several media and pundits. His CFO added that “Our data continues to tell us that the American consumer remains resilient.”

Three observations FYI:

• Gasoline prices exploded 40% in March. Nearly 60% of Americans use their credit card for fuel, around 40% use debit cards.
• In March, excluding higher gasoline spending, the MoM rise in total spending was a modest 0.1%, before inflation.
• YoY comps are upwardly biased against very weak spending 12 months ago, particularly on discretionary categories.

Unilever hikes price of Hellmann’s mayonnaise as suppliers try to offset rising fuel costs

Multinational food and packaged-goods conglomerate Unilever PLC is applying a 9-per-cent increase in the price it charges retailers for its Hellmann’s mayonnaise – another signal that soaring fuel costs are putting pressure on grocery prices.

The Anglo-Dutch company sent a notice to retailers late last week, saying the price hike – which will take effect in early July – reflects a “significant increase” in its costs. (…)

These conversations between suppliers and grocers are not just happening in Canada, said Henry Chambers, senior vice-president with Sentinel Management Consultants, a strategic advisory and commercial capability training firm that works with food suppliers around the world. “This is everywhere,” he said, as rising fuel costs have global effects, “… all the manufacturers have been hit.” (…)

Peter Chapman, founder of consulting firm SKUFood, said the impact of rising fuel costs might already be showing up in some grocery prices. Fresh produce, for example, operates under a pricing model in which increases in input costs such as fuel are incorporated almost immediately into prices, rather than being negotiated separately.

“It’s not $25 plus a fuel surcharge … it’s just broccoli this week costs $27,” he said. “The fresher it is, the sooner you’re going to see the change.”

• Downplaying fears about higher prices stemming from the war in Iran, he derided inflation as “fake” and said the war “is going along swimmingly,” (Bloomberg)

US, Iran Weigh Longer Truce as Pakistan Boosts Mediation Efforts

(…) The US and Iran are considering a two-week ceasefire extension, according to a person familiar with the matter, who asked not to be identified discussing sensitive matters. Neither side desires restarting fighting, said another person familiar with the discussions, with the war having devastated Iran’s infrastructure and sent energy prices soaring, including in the US. (…)

Iran has said it isn’t pursuing a weapons program. The country’s right to peaceful use of nuclear energy “cannot be revoked,” Foreign Ministry Spokesman Esmail Baghaei said Wednesday. However, the level and type of enrichment are “negotiable,” he added. (…)

• U.S. and Iran inch toward framework deal to end war, U.S. officials say

(…) A U.S. official said President Trump’s negotiating team — Vice President Vance, White House envoy Steve Witkoff and senior adviser Jared Kushner — continued making calls and exchanging draft proposals with the Iranians and mediators Tuesday.

• “They were on the phone and backchanneling with all the countries and they are getting closer,” the U.S. official said.
• A second U.S. official confirmed progress was made Tuesday.
• “We want to make a deal. And parts of their government want to make a deal. Now the trick is to get the whole of government over there to make the deal,” a third U.S. official said.
• Vance, who led the initial talks in Pakistan last week, said at a Turning Point USA event in Georgia Tuesday: “I think the people we’re sitting across from wanted to make a deal. … I feel very good about where we are.”
• “The details are complicated — you can’t do that in two days,” one U.S. official said.

Gulf states turn to private deals in $10bn wartime borrowing spree

Gulf monarchies have discreetly raised almost $10bn in private sales of bonds this month in their first international borrowing since the Iran war delivered a major hit to their economies.

Abu Dhabi has sold $4.5bn, Qatar $3bn and Kuwait $2bn in private placements of US dollar bonds since the start of April, sidestepping public markets where they typically issued debt before the war but where borrowing costs can be more uncertain. (…)

The Iran war is delivering a sizeable blow to their economies, with Qatar forced to suspend exports of liquefied natural gas and oil flows from Kuwait and the United Arab Emirates sharply reduced, hitting the bedrock of their economies.

“Even if the war ends soon, we expect all six Gulf states to record negative GDP growth this year of 5-10 per cent,” Capital Economics analysts said. (…)

Gulf state-owned banks have meanwhile raised hundreds of millions of dollars in recent weeks through private placements of bonds and other forms of short-term debt, sometimes through branches in Asia.

Iran’s Shadow Fleet Meets Its Match in U.S. Blockade A network of vessels has helped Iran evade sanctions but naval patrols pose a new challenge

(…) Early signs are that after years of dodging restrictions, the Iranian shadow fleet may have met its match in the U.S. naval blockade—its ships now appear unable to leave the Persian Gulf. (…)

On Wednesday, Centcom, which oversees U.S. forces in the region, said that no ships got through its blockade of Iranian ports in its first 48 hours. Nine vessels obeyed direction from U.S. forces to reverse course and re-enter an Iranian port on the Gulf of Oman, Centcom said.

At least 10 ships transited the strait on Tuesday, according to Lloyd’s, some with the hallmarks of shadow-fleet activity, shipping analysts say. (…)

Ships with ties to Iran have so far had a better time getting into the Persian Gulf than out, possibly pointing to the difficulty the U.S. Navy might have in determining where a vessel is heading before it arrives. (…)

Military and shipping analysts said the movements showed how operators of shadow ships were trying to test the limits of the blockade and probing to see whether the U.S. would take action to enforce the closure.

“I think that they’re trying to push the envelope to see. Is the U.S. going to really go the whole measure here,” said Bryan Clark, a former senior official with the U.S. Navy and now a senior fellow with the Hudson Institute. (…)

“How many ships are going to test the blockade? Does the Navy have enough ships, aircraft, assets, et cetera to keep up with that?” said Wills.

Windward (my emphasis):

[On April 14] A total of 19 vessels transited the Strait, including 5 inbound and 14 outbound crossings. Outbound traffic included two tankers flagged to Malawi and the Netherlands, one Panama-flagged bulk carrier, and eleven cargo vessels, including five Iran-flagged, four Comoros-flagged, one India-flagged, and one Oman-flagged vessel. (…)

On 15 April 2026, 15 vessels transited the Strait of Hormuz — 8 inbound, 7 outbound.

Five of the 8 inbound vessels are flagged to high-risk or sanctions-associated registries — Angola, Netherlands Caribbean (×2), Malawi, and Comoros — all classified as High smuggling risk.

Taken together, these cases show that the blockade is influencing vessel decisions in real time, but without consistent outcomes. Monitoring vessels that have not yet completed transit will be critical, as their progression, reversal, or disruption will define the next phase of enforcement behavior. (…)

Vessel behavior confirms a fragmented response to the blockade. Turnarounds, drifting, dark activity, and coastal routing all indicate hesitation and real-time adaptation rather than uniform compliance. (…)

The U.S. blockade is beginning to shape vessel behavior without yet fully constraining movement.

Centcom’s releases don’t verify with independent data…

Pentagon Approaches Automakers, Manufacturers to Boost Weapons Production Senior defense officials have talks with GM, Ford and others about shifting some capacity

The Trump administration wants automakers and other American manufacturers to play a larger role in weapons production, reminiscent of a practice used during World War II.

Senior defense officials have held talks about producing weapons and other military supplies with the top executives of several companies, including Mary Barra, chief executive officer of General Motors, and Jim Farley, CEO of Ford Motor, according to people familiar with the discussions. (…)

The Defense Department “is committed to rapidly expanding the defense industrial base by leveraging all available commercial solutions and technologies to ensure our warfighters maintain a decisive advantage,” a Pentagon official said.

The discussions are the latest by the administration to put military manufacturing on what Defense Secretary Pete Hegseth has called a “wartime footing.” (…)

A short pause here to let you absorb this…

***

Has the Era of the Mega-Layoff Arrived? From Snap to Block to Amazon, a new template for ‘right sizing’ the workforce is spreading through C-suites—and other companies are taking note

Snap is laying off 16% of its staff. Block lopped off 40% of its workforce. Oracle, meanwhile, is shedding thousands of employees, after Amazon.com cut about 30,000 in a matter of months.

Welcome to the era of the mega-layoff. In Silicon Valley and beyond, companies that are cutting staff are doing it with a big ax. Instead of laying off people in more incremental—and less disruptive—waves, employers are seizing on the potential financial upsides of severing swaths of their workforces at once. (…)

Behind the scenes at Block, something else happened: Leaders from across the corporate world messaged the payments company’s top executives, asking for the playbook on how they might replicate such sweeping cuts at their own companies, said Amrita Ahuja, Block’s chief financial officer and chief operating officer.

“We had people kind of coming out of the woodwork,” Ahuja said in an interview. Asked if she saw Block’s layoffs of 40% of its workforce as a new template, she said: “It’s an inevitability. As a CFO, I think it’s better to be a little bit early than to be too late here.” (…)

“Most companies, if not all, could cut 30% to 50% of their workforce at any time and see no material difference in performance,” said Mo Koyfman, founder of the venture-capital firm Shine Capital and a former executive at the media company IAC.

Sure, artificial intelligence has made some work processes more efficient, allowing for fewer people in some departments, he said. But “it also has given air cover, more importantly, to execute on the right sizing that you probably needed to do a long time ago.” (…)

Regardless of the why, executives said, companies are finding a way to slash jobs and are being rewarded by investors for it.

“Others are going to follow suit,” said Beth Steinberg, a veteran human-resources executive who has spent much of her career at technology companies. “A few companies will do it, they’ll get praise.” That, she said, will encourage other leadership teams to “come back to their companies and be like, ‘We have to do huge layoffs.’” (…)

He predicts many tech companies will cut teams by 20% to 50% by the end of 2026, if only because he is watching coding tools like Anthropic’s Claude Code and OpenAI’s Codex advance so rapidly. (…)

And while much of the pain has been in the tech sector, job cuts are also happening in warehousing, logistics and other industries that ramped up hiring during the Covid era, said Dana M. Peterson, chief economist at the Conference Board. (…)

• The BLS Layoffs and Discharges data has been creeping up but, through February, is not spiking upwards.
• Indeed Job Postings had stabilized since November but have turned downward in March (through March 27):

• The March 2026 Challenger Report, though titled “March Cuts Rise 25% From February, AI Leads Reasons” is not alarming overall:

In the first quarter, employers announced 217,362 job cuts, down 16% from the 259,948 recorded in the fourth quarter of 2025, and down 56% from the 497,052 cuts announced in the first quarter of 2025.

Technology announced 18,720 job cuts in March for a total of 52,050 in 2026. That is an increase of 40% from the 37,097 cuts in this sector announced in the same period last year. It is the highest year-to-date total for the sector since 2023 when 102,391 Technology cuts were recorded.

More layoffs are likely to come from Technology companies in 2026. Last month’s total was made up primarily on a workforce reduction at Dell Inc., according to their latest annual filing. Oracle reportedly began layoffs late last month, though the company has not released a total figure. Meta, meanwhile, is undergoing layoffs in its Reality Labs division as it focuses on pivoting to artificial intelligence.

“Companies are shifting budgets toward AI investments at the expense of jobs. The actual replacing of roles can be seen in Technology companies, where AI can replace coding functions. Other industries are testing the limits of this new technology, and while it can’t replace jobs completely, it is costing jobs,” said Challenger.

In March, Artificial Intelligence (AI) led all reasons for job cuts, with 15,341 announced during the month, 25% of total cuts.

So far in 2026, AI ranks fifth year-to-date with 27,645 cuts, or roughly 13% of all job cut plans.

In 2025, companies referenced AI for 54,836 announced layoff plans, 5% of total cuts during the year.

So, yes, AI-related job losses are gaining in importance, but mainly because non-AI related losses are declining.

JOB CUT ANNOUNCEMENTS

Hiring plans rose 157% in March to 32,826 from 12,755 in February. They are up 149% from the 13,198 hiring plans in March 2025.

So far this year, employers have announced plans to hire 50,887 workers, down 6% from 53,867 new hires announced during the same period in 2025.

The US labor market is at near-stalled speed which makes AI a nice headline grabber. But stats are no confirming “a new era of mega layoffs” so far.

EMPLOYMENT YoY%

The Fed’s Beige Book: “Labor markets held steady, with employment flat to slightly up in most districts, a marginal improvement from March’s more mixed picture. Wages remained modest to moderate across all districts, with no acceleration or deceleration reported.”

U.S. Import Prices Rise Less Than Expected in March Overall import prices rose 0.8% in March

Overall import prices rose 0.8% in March, slightly lower than the downwardly revised 0.9% increase in February, the data showed.

Year-on-year prices were up 2.1%, the BLS said.

Petroleum import prices increased 9.4% as the war in Iran drove crude oil prices sharply higher. Prices for nonpetroleum imports were up 0.1%, the BLS data showed.

“Less than expected”, but up 2.1% nonetheless, +2.6% ex-petroleum, and rising

Quarterly at annual rates (Import prices exclude duties, such as tariffs imposed on imports by the Trump administration, as well as transportation costs.)

The Fed’s Beige Book: “The most consequential shift from the March Beige Book is the energy price shock now hitting the economy. Higher energy costs are adding to residual tariff pressures, and an acceleration in input costs was universal across all districts. Selling price growth is lagging input cost increases, compressing margins. The short-term inflation picture has clearly worsened.”

German Companies Increasingly Favor Asia Over US Investments

Fewer German companies are investing in the US due to President Donald Trump’s trade tariffs and instead shift their focus to China and other Asian countries, according to a survey by industry lobby group DIHK.

Among around 1,700 manufacturers polled, 44% said they planned to invest in the US, four percentage points less than in the 2025 survey and the first significant decline since the Covid-19 pandemic, the DIHK said Thursday.

China was a declared investment target for 34% of respondents, up from 31%, while the figure for the entire Asia-Pacific region jumped by five percentage points to 26%.

“The trade dispute with the US is fueling uncertainty and leading companies to postpone decisions,” said Volker Treier, DIHK’s head of foreign trade. In Asia, firms are increasingly moving to both produce and sell their products in local markets, particularly in China and India, he said. (…)

Trump and His Federal Reserve Vendetta Firing Jay Powell would delay Kevin Warsh’s confirmation and nominee’s reform agenda.

If Mr. Powell doesn’t leave when his term as Chair ends on May 15, “I’ll have to fire him,” the President said, adding “I’ve wanted to fire him, but I hate to be controversial.” Who knew? His Administration manufactured the criminal probe with no evidence of criminal wrongdoing over the Fed renovation to bully Mr. Powell into stepping down.

Instead, Mr. Powell has dug in and promised not to step down from the Fed board until the probe is concluded. His term as a governor (unlike his four-year term as Chair) doesn’t end until January 2028. That means he can stay on the board for another two years if he wants. Mr. Trump knows this, which may be why he’s threatening to fire Mr. Powell.

There he goes again. President Trump on Wednesday renewed his threat to fire Jerome Powell if the Federal Reserve Chair doesn’t sail into the sunset when his term as Chairman ends next month. His threat may be bluster, but it’s also self-destructive. Readers may have noticed this is becoming a presidential habit. (…)

By the way, Mr. Trump’s new East Wing ballroom is exceeding its initial projections. Is that a sign of Presidential incompetence? (…)

The best way to replace Mr. Powell is to drop the pretextual Justice investigation and get Mr. Warsh confirmed. Why is this so hard for the President to understand?

Why?