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Newsom Vows 100% Tax On Trump "Anti-Weaponization Fund" Payouts

Authored by AG News Staff via American Greatness,

California Gov. Gavin Newsom said Wednesday that his administration will seek to impose a 100 percent tax on any California residents who receive money from President Donald Trump's newly created $1.776 billion "anti-weaponization" fund.

Speaking to reporters, Newsom denounced the fund as a "slush fund" and pledged to block Californians from financially benefiting from it.

"Anyone from California that receives any of those funds, we want to tax 100 percent of those proceeds," Newsom said during a press conference.

"He pardoned all of those folks that were beating up cops and absolved them, providing them 1.776 billion dollars," Newsom said. "So not only do you get a pardon, you get rewarded. That's why this is needed."

The fund was established as part of Trump's settlement with the Department of Justice stemming from his lawsuit against the IRS over the leak of his tax returns.

Trump has described the program as restitution for Americans harmed by what he called politically motivated government actions during the Biden administration.

Last week, Trump defended the fund as compensation for people "badly abused by an evil, corrupt, and weaponized Biden Administration."

Democrats in several blue states are now attempting to block recipients from keeping any payouts tied to the program.

In New York, Democratic Assemblyman Alex Bores introduced legislation that would similarly impose a 100 percent tax on recipients of the fund.

State Sen. Mike Gianaris said Democrats in Albany are pushing to advance the measure before the legislative session ends next week.

"There's widespread, bipartisan agreement that this is baldfaced corruption at its worst and if we have the ability in New York to combat it by ensuring that none of this money benefits anyone in our state's borders, I'd expect there'd be widespread support for that idea," Gianaris said.

Democratic lawmakers in New Jersey are also drafting similar legislation.

State Sen. Andrew Zwicker called the proposal "a brilliant counter move to Trump's corruption."

Tyler Durden Thu, 05/28/2026 - 11:20

Oklo COO Says Nuclear Waste Could Power America For 150 Years

Earlier this week, we covered Oklo’s approval by Chris Wright’s DOE to convert plutonium previously set for disposal into new fuel. “Fuel supply constraints are a key throttle to advanced reactor development,” Oklo CEO Jacob DeWitte said following the announcement. 

Jacob’s wife and Oklo’s COO Caroline DeWitte joined ZeroHedge and Radiant Energy Group’s Madison Hilly. Caroline laid out Oklo’s ambitious vision: recycle spent nuclear fuel, build fleets of reactors for AI hyperscalers like Meta, and turn what the industry currently treats as a liability (nuclear waste) into a strategic asset.

And unlike many of the “PowerPoint reactor” startups flooding the space, she says they are already building.

Nuclear Waste And A New Energy Order

One of the company’s core theses is that the U.S. is sitting on a massive untapped energy reserve in the form of spent nuclear fuel already stockpiled around the country.

“It has enough energy in it to power the entire country for 150 years. So let’s use it.”

Unlike conventional light-water reactors, Oklo’s fast reactors are designed to utilize fuel currently treated as waste, potentially bypassing future uranium bottlenecks while lowering long-term fuel costs.

The company is also pushing aggressively into isotope production, a market DeWitte suggested remains critically undersupplied after years of Western dependence on Russian supply chains.

“Some of these isotopes… if you had a kilogram, it might be a trillion dollars.”

Oklo is now racing to bring an isotope test reactor online in Texas and DeWitte says they hope to hit criticality around July 4th.

pic.twitter.com/fNjQsmgIoR

— ZeroHedge Debates (@zerohedgeDebate) May 27, 2026 Silicon Valley’s AI Boom Fast-Tracking Nuclear Energy

The AI infrastructure arms race has abruptly transformed advanced nuclear energy from a niche policy idea into a strategic national priority.

DeWitte said the current policy environment, under Trump’s energy secretary Chris Wright, has dramatically accelerated Oklo’s deployment timelines.

“It’s been a world of difference since about a year ago.”

According to DeWitte, working through a Department of Energy partnership framework allowed Oklo to begin construction activities roughly two years earlier than would have been possible under the traditional Nuclear Regulatory Commission process. And Oklo currently has six DOE projects underway.

The company’s recent deal with Meta highlights where much of the demand is coming from: hyperscale AI infrastructure desperate for reliable baseload electricity.

“Everyone needs as much as they can get as soon as they can get it.”

Public sentiment around nuclear power appears to be shifting as communities increasingly resist giant AI server farms.

“Is there going to be a data center in my backyard?... Oh no, no, no, just a nuclear power plant. And they’re like, ‘Oh, good.’”

pic.twitter.com/8TH2ImTNpe

— ZeroHedge Debates (@zerohedgeDebate) May 27, 2026

Check out the full interview below or listen on our Spotify.

Tyler Durden Thu, 05/28/2026 - 11:05

Remarkable Turns Of Events

By Michael Every of Rabobank

It’s remarkable screen oil prices are little changed at below $100 today after Trump said the US is “not satisfied” over talks with Iran, days after claiming a deal was imminent, and hours after saying the terms the Iranians had leaked that the US agrees to --a real TACO-- were a “complete fabrication.”

It’s more remarkable when Trump added Iran and Oman will not control the Strait of Hormuz, which they say they will; vowed to blow up Oman if it misbehaves; struck Iran again in another “defensive action”; and reiterated a deal requires the region to sign up to the Abraham Accords, underlining it has to be a turning point to a new geopolitical/economic architecture.

It’s truly remarkable given Trump added he can outwait Iran and dismissed the growing economic impact of this crisis and the looming midterm elections; and that Israel ordered the mass forced displacement for all the population of south Lebanon as the IDF-Hezbollah conflict intensifies, destroying terror infrastructure across thousands of civilian homes.

Meanwhile, another think tank report argues US munitions depleted by the Iran war will take until 2030 or 2031 to restore. That leaves a global shortfall already being felt in Europe and Asia and requiring them to develop their own systems, and supply chains, at very high cost – and it will require the kind of ‘reverse perestroika’ change to the US political-economy previously discussed for it to overcome that bottleneck more rapidly.

Relatedly, the UK claims half a million Russians are dead in the war, as a senior Ukrainian commander claims a 'turning point' in its favor, but Zelenskyy asked Trump for immediate air defence support that might not be available. On the other side, Russia is tasking bankers with shooting down Ukrainian drones. The grimness of war aside, and in the best Russian black-humour tradition, the latter brings to mind the joke about three econometricians shooting at a target, one 20 feet to the left, one 20 feet to the right, and the third crying, “I hit it!” without firing.

Brussels now has a timetable for Ukraine's and Moldova’s EU bids, which should be made public mid-June, as Albania says it will accept membership with a probation on vetoes as it is the “EU Taliban” in its fanaticism about joining. The former move will only increase EU-Russia tensions, as another ex-Soviet republic, Armenia, signs a strategic partnership deal with the US.

Elsewhere, India-Pakistan border tensions simmer; Japan welcomed the Philippines’ President Marcos as their defence ties deepen; China says it drove away a Dutch warship near the Paracel Islands; and US Secretary of War Hegseth is heading to Asia ‘with Taiwan questions swirling.’

In related geoeconomics, the ECB warned of a financial crisis triggered by the Iran war impact; a ‘plastic shock' is hitting Asia; Central Asia could turn to China over water security fears; and China and Cuba are holding agriculture talks as Beijing backs it against US pressure.

The US Trade Representative just stated, “We've just come to terms with the fact that there is not going to be some giant comprehensive reform of the way the Chinese political system works.” US policy will adapt accordingly. France said it may accept 'Made in Europe’ subsidies for UK cars; an EU wind turbine maker called non-western rivals ‘a security threat’; and it’s argued Germany can’t tariff China as its so reliant on inputs from it; as US tariffs and slumping EV sales are reportedly crippling the Canadian auto sector, with the local press asking if it will survive.

In technology, Nvidia chief Huang is to join a Tim Cook-chaired board at a prestigious Beijing university as the Chinese press share that their scientists claim AI is massively increasing China’s new weapon development speed – as it is in the US, of course, but not in those who don’t have that AI muscle.

In politics, what were once unthinkable Overton outcomes are becoming normal and so is political turmoil. New York lawmakers just passed a billionaire’s pied-a-terre tax; Australia is pressing ahead with its new property and capital gains taxes; Britain faces a ‘lost generation’ as youth worklessness heads for 1.25 million, claims one paper - as former PM Blair attacks current Labour PM Starmer and the pretender Andy Burns for a lack of vision; indeed, the Financial Times argues the UK has ironically become a European country since Brexit in that it now has high public debt and permanent political instability; and, in Europe, a police raid on the party headquarters of Spanish PM Sanchez, whose wife is already charged with corruption, has increased the pressure on him.

In markets, as oil --so everything else-- clutches at favoured straws, the FT has another op-ed which argues, ‘Want to predict central banker behaviour? Look to their birth date’, because “Formative experiences shape our views on future inflation as much as the data.” If so, what will the deeply dissatisfied youth growing up with the background described above take as normal regarding inflation and monetary policy?

Will they think in the same way those born when “I can’t get no satisfaction” was written, and look to technocratic econometrics as the answer to their multifaceted geopolitical and socio-economic problems? The election of Mamdani in New York, and of right and left populism globally, suggests not. Also note a 2025 YouGov poll showed a quarter of self-described US ‘very liberals’ say political violence is sometimes justified to achieve desired outcomes - as Luigi Mangione, on trial for murdering a US health executive, is as a social-media icon. Hikes followed by cuts can take on an entirely new meaning in that kind of socio-political context.

Of course, technocrats can clutch at straws, and at more technocracy, too. The Australian press this week saw a Rolling Stones-era author make a decent historical argument that immigration policy shouldn’t be politicized, and is complex, so “Perhaps it's time to consider relieving politicians of responsibility for it, just as they were relieved of monetary policy 30 years ago.” The Overton window looks so over!

But for now, it’s what is and isn’t over the Middle East that’s the primary focus.

Tyler Durden Thu, 05/28/2026 - 10:45

Chinese Navy Pushes Dutch Frigate From Claimed Waters Via Electronic Warfare

The Netherlands has become the latest Western nation to tangle with Beijing and exchange tense words after testing its sweeping claims to the South China Sea.

A tense military encounter unfolded involving a Dutch warship, identified as the HNLMS De Ruyter, after it had entered waters near the disputed Paracel Islands. China's military reportedly used electronic warfare measures to force it out of the China-claimed waters in the incident on Wednesday.

source: Defensie.nl

Chinese military spokesperson Zhai Shichen later charged that the Dutch ship violated "China’s territorial sovereignty and maritime and air security," while further alleging that the ship illicitly launched multiple helicopter sorties and entered Chinese airspace.

"The Dutch side’s actions…seriously undermine peace and stability in the South China Sea and could easily lead to misunderstanding and miscalculation," Zhai said.

"We firmly oppose such acts and solemnly demand that the Dutch side immediately cease its infringement and provocative actions. The Chinese military will maintain a high state of alert at all times and resolutely safeguard China's national sovereignty, security and regional peace and stability," the PLA statement added.

However, the Netherlands has rejected this account, instead saying "the frigate has not been in territorial waters" and "operates in accordance with international law," according to the words Dutch navy spokesperson Marinka Hiraldo Vos-van Kooten.

USNI News details the Dutch frigate's mission as follows:

The Royal Netherlands Navy De Zeven Provinciën-class frigate is deployed to the Indo-Pacific for Amsterdam’s five-month-long Pacific Archer mission. The mission aims to promote freedom of navigation and foster ties with allies and partners. De Ruyter is also set to attend the Rim of Pacific naval drills around Hawaii later this summer.

One week before the incident, De Ruyter moored in Manila for a port visit and activities with the Philippine Navy. The frigate’s captain told local media outlet Manila Bulletin that the ship’s previous interactions with a Chinese helicopter was “professional” and did not involve a territorial challenge.

Following a brief but intense naval clash with Vietnam in the 1970s, Beijing seized control of the Paracel Islands. There remain overlapping claims among many nations in the region.

Encylclopaedia Britannica

In the decades since, China has systematically militarized the region, constructing extensive military infrastructure across a network of sprawling artificial islands. The US, Europe, and regional allies see much of this as international territory and waters.

Tyler Durden Thu, 05/28/2026 - 10:15

US New Home Sales Tumbled In April As Prices Soared

With Case-Shiller reporting existing home price declines in half of America's largest cities, and after two straight months of rip-roaring demand, NAR reports that New Home Sales in April tumbled 6.2% MoM (almost twice as bad as the 3.2% MoM decline expected). March's 7.4% MoM spike was revised down bigly to just +3.4%, all of which left new home sales down 

Source: Bloomberg

Overall, new home sales have really gone nowhere for four years...

It seems lower mortgage rates did nothing to help new home sales...

Finally, while existing home prices are lower, median new home price rose 2.2% y/y to $422,500; average selling price at $508,800.

This was the biggest MoM jump in median new home prices since 2019...

Not great for affordability.

Tyler Durden Thu, 05/28/2026 - 10:07

US Charges Google Employee With Pocketing Millions From Insider Trading Bets On Polymarket

Authored by Stephen Katte via CoinTelegraph.com,

US authorities have charged a Google employee with allegedly using information from the company to make bets on Polymarket and profit $1.2 million.

The Justice Department said on Wednesday that it unsealed charges against Google software engineer Michele Spagnuolo, accusing him of accessing unreleased internal information at Google and placing 25 bets worth $2.7 million on markets related to the most searched individuals on Google in 2025.

Prosecutors said Spagnuolo owned the Polymarket account “AlphaRaccoon”, which profited $1.2 million on “outcomes that the market treated as unlikely” when Google published information on the most searched individuals in December.

The Commodity Futures Trading Commission filed a twin complaint against Spagnuolo on Wednesday, making similar allegations of insider trading.

Prediction markets are facing growing scrutiny over insider trading, with Congress launching a probe into Polymarket and Kalshi on Friday, questioning the companies’ response to incidents of insider trading on the platform, with lawmakers concerned that government officials are using insider knowledge to make bets.

Manhattan US District Attorney Jay Clayton said in a statement that the charges “reinforce a decades-old message: Corporate insiders cannot use confidential business information to turn a profit in our markets.”

Source: US Attorney Southern District of New York 

AlphaRaccoon account allegedly changed name 

According to the court documents, communities on Discord and X started discussing the possibility that AlphaRaccoon was a Google insider in December. Soon after, the username was allegedly changed to a wallet address.

Prosecutors alleged that the funds in the AlphaRaccoon account were also sent to a decentralized crypto swapping service and to an unnamed transfer service that offers privacy protection for blockchain transactions

The Justice Department charged Spagnuolo with commodities fraud, wire fraud and money laundering, and could face a maximum sentence of 50 years in prison.

In its complaint, the CFTC seeks restitution, disgorgement, civil monetary penalties and trading and registration bans. 

CFTC Director of Enforcement David Miller said in a statement that “the division is a cop on the beat in policing the illegal use of inside information in the prediction markets and other markets within the CFTC’s jurisdiction.”

Source: CFTC

“We will continue to take action to protect markets from insider trading and other forms of fraud, abuse and manipulation,” Miller added.

It comes after the Justice Department charged a US soldier in April with using classified information to place bets on the US capture of former Venezuelan President Nicolás Maduro.

Tyler Durden Thu, 05/28/2026 - 09:50

Tony Blair Calls For UK To Get Closer To Trump And Ease Climate Change Targets

Authored by Rachel Roberts via The Epoch Times,

Former British Prime Minister Tony Blair, who led the Labour Party to three election victories, said the government should repair its relationship with the United States rather than look to rejoin the European Union.

Blair, who remains a deeply divisive figure within the party, published an essay on Tuesday amid a crisis engulfing Prime Minister Keir Starmer, with a leadership challenge widely expected by September.

The influential former premier, who took the UK into the Iraq War in 2003 based on what an official UK inquiry later concluded was faulty intelligence, wrote that Starmer should not have prevented Washington from using British bases in the United States and Israel’s ongoing war with Iran.

“The initial request was simply for the use of our military bases for the refuelling of American planes. I understand the reasons for refusal but it’s not the best way to treat our ally,” Blair wrote, arguing this decision had made the UK’s partnership with the United States “weaker.”

America’s ‘Staunchest Supporter’

He wrote: “I know how hard it is to be an ally of the USA. We were its staunchest supporter post 9/11. We went through Afghanistan and Iraq together. But it mattered deeply to America and so it mattered to us also. America remains the indispensable core of Britain’s security alliance. But staying with it means even when it is difficult or unpopular.”

Blair argued for the government to smooth relations with U.S. President Donald Trump, who has been critical of Starmer over immigration and free speech issues as well as his decision not to back military action in Iran.

Polling in the UK suggests that while Starmer is personally unpopular as PM, most Brits back his decision not to involve the country in the war.

Blair also criticized cuts to international aid, which he said had weakened Britain’s influence on the global stage, including for the purpose of EU negotiations.

Known for his staunchly pro-European Union views, Blair said that Labour must resist reversing or weakening Brexit to please those within the party who view it as an economic disaster.

Likely Labour leadership contender Wes Streeting has made clear his desire to see the UK back in the EU “one day,” while another possible contender, Andy Burnham, has made similar musings in the past.

Blair was ​the party’s longest-serving premier, holding office between 1997 and 2007, and transforming the party from one with a traditional working-class voter base through his centrist “New Labour” ideological vision.

Starmer is currently being circled by party rivals after Labour’s disastrous results at the recent local elections, largely at the hands of Nigel Farage’s populist Reform UK, but also losing votes to the left-wing Green Party.

The former premier, who published the 5,600-word essay for his influential think tank, the Tony Blair Institute for Global Change, said the government should dial down its net zero commitment, intended to combat climate change.

Britain's Prime Minister Keir Starmer speaks to small business owners during a visit to Home Cafe and Kitchen in London, on May 18, 2026 Yui Mok/Pool Photo via AP

‘Cheap’ Over ‘Clean’ Energy

Blair backed the UK making the most of its resources to address the ongoing energy crisis, writing: “We must prioritise cheaper energy and electrification over net zero and use what is left of our North Sea oil and gas resources.

“At a minimum, the government should try to limit the effect of the changes made and, as we have argued consistently, remove those parts of the net-zero agenda which prioritise clean energy over cheaper energy; and from now on make sure the actions match the words on growth.”

Blair urged Labour, which won the last national election by a landslide in July 2024, to concentrate on policy to improve its standings in the opinion polls, as Starmer battles some of the lowest approval ratings historically of any leader.

“The government’s principal problem isn’t Keir’s personality. Or a ​failure to communicate ‘our achievements’. Or a need to assert more strongly Labour’s ’values’,” Blair wrote.

“Whether there is a ‌leadership change ⁠or not is irrelevant if it doesn’t start with a policy debate.”

Blair, who swept to power with his own landslide in 1997 following 18 years of Conservative rule, appeared to take aim at both Streeting and Burnham in his polemic.

Burnham, the current Mayor of Greater Manchester, who needs to win an upcoming by-election in order to return to national level politics before he can mount a challenge, is regarded as being on the so-called “soft left” of the party.

Streeting, who recently quit as health secretary, is considered further to the right. Streeting has been described by others as a Blairite but rejects the label.

Polling shows the party members prefer Burnham, a more experienced politician, who served as a junior minister in Blair’s government, and that he would defeat Starmer in a head-to-head leadership contest, whereas the prime minister would win in a one-on-one with Streeting.

Blair argued against both Streeting and Burnham’s mooted solutions to Britain’s various problems—either an attempt to rejoin the EU or a shift to the left.

The Labour mayor of Greater Manchester, Andy Burnham, on a morning run in Manchester, England, on May 18, 2026. Jon Super/AP Photo

De-Brexit ‘Not the Answer’

“It is one thing when in opposition to indulge this perennial delusion that when we lose seats to the ​right the country is really signalling it wants Labour to move ​left; it ⁠is dangerous to do it in government,” he wrote.

“Just as Brexit was never the answer to Britain’s challenges back in 2016, reversing it isn’t the answer to the country’s far worse ⁠situation in ​2026.”

Blair wrote that the government should instead try to forge “a structured, formal relationship” with the EU—akin to Starmer’s stated ambitions for closer ties with the bloc while stopping short of an attempt to rejoin.

Blair suggested it was a mistake for Labour to remove Starmer as leader, writing: “The Labour party is playing with fire; or, more accurately with its future, and that of the country.”

“Trying to force the prime minister out, before we know what policy direction we’re bringing in, is not a serious way of conducting ourselves.”

Blair said there are two “epochal changes” happening in the world today—one geopolitical, with the rise of China and India, and the other technological, through artificial intelligence, with Britain “not prepared for either.”

‘The Radical Centre’

He said that these two shifts “require radical change in policy, system of government and politics,” and that in his view, the best political position from which this could be achieved is what he terms “the Radical Centre.”

“[Any renewal of Britain] requires a fundamental reset,” he wrote. “Labour’s only ​electorally viable strategy is to become the Radical Centre.”

Blair said there is “no point in debating“ whether the AI revolution ”is a good or bad thing.”

“Just know it is a ‘thing’. In fact, it is ‘the thing’. It will displace jobs, though creating new ones, but no one yet knows the full consequence,” he wrote.

Under a subsection entitled, “The New World Order,” Blair said he understood Europe’s anxiety over Trump’s “America First” policies, but countered that the U.S. president has identified “the principal threats—in the Arctic from Russia; longer term, globally, from China; and in the Middle East from Iran—no differently from how Europe sees the world.”

“President Trump has demanded increases in NATO spending not dissolution of the alliance,” Blair added.

He said that Starmer had been “absolutely right” to visit China in January because “we need a functioning relationship with the other superpower.”

The wide-ranging essay sparked much commentary and debate within the UK media, with criticism coming mainly from the left faction of the Labour Party. Starmer has made no public response so far.

Burnham, who will contest the Makerfield by-election in the northwest of England on June 18, told the Observer that Blair had misunderstood why voters had abandoned the political center in the first place.

Burnham said Blair’s essay “doesn’t mention inequality once” and argued that 40 years of widening inequality and declining living standards for many people were the driving reasons for voters turning away from the two main parties.

“If you don’t get how that’s driving politics now, if you are not rooting your analysis in the fact that people are unable to live and that things that were taken for granted are no longer affordable, then you are not understanding what’s going on,” Burnham said.

Tyler Durden Thu, 05/28/2026 - 09:15

'He's Having A Stroke': Jill Biden Admits Joe's Debate Disaster Scared Her 'To Death'

Opportunistically timed to boost sales of her soon-to-be released memoir, Jill Biden has come clean on her reaction to Joe Biden's catastrophic performance in his June 2024 debate with Donald Trump. Though she publicly lauded his performance at the time, now she admits she thought her husband was having a stroke. 

Immediately after the debate, Jill took a stage with Joe to tell him how well he had performed, in a manner that some at the time compared to a teacher praising a kindergartner:  "Joe, you did such a great job. You answered every question, you knew all the facts."  

Former First Lady Jill Biden previously said she thought then-President Biden did a “great job” after his 2024 debate. She now tells CBS News that she thought he was “having a stroke.” https://t.co/JVINZzMu0h pic.twitter.com/O2e7mgsSIo

— Akayla Gardner (@gardnerakayla) May 27, 2026

Now, however, Jill Biden says he did so terribly that she thought he was having a major medical episode that was affecting his brain. “I don’t know what happened,” Jill Biden told CBS News Sunday Morning. “As I watched it, I thought, ‘Oh, my God, he’s having a stroke.’ And it scared me to death.”

Timing is everything: Next week, the former first lady will release her memoir, "View From The East Wing." Publisher Simon & Shuster's promotional copy for the $32 book quotes an unnamed novelist "who once wrote, 'There are stories one must tell, and years when one must tell them.' Jill Biden’s time to discuss her four years in the White House is now." 

Trump just released a brutal 95 second ad of Joe Biden's debate lowlights: pic.twitter.com/enusIKHhwN

— End Wokeness (@EndWokeness) June 28, 2024

Though Jill Biden may be offering some overdue candor about the debate that led to a tumultuous summer for the Democratic Party -- culminating in Biden withdrawing from the race after the Democratic primaries had already run their course -- she's not done putting Americans' credulity to the test. In particular, anyone who observed any number of painfully awkward Joe Biden press conferences and interviews in 2024 is going to have a hard time buying Jill Biden's ending of this sentence in her CBS interview:  "I wasn't horrified, I was frightened, because I had never, ever seen Joe like that, before or since."  

Jill Biden said she feared Joe Biden was “having a stroke” during his widely criticised 2024 debate against Trump.

In an interview with CBS News, she said she had “never seen Joe like that before or since” and was “frightened” by his performance.pic.twitter.com/e2jgY0nRST

— Clash Report (@clashreport) May 27, 2026

Even some Biden-administration insiders are scoffing at Jill Biden's new-found honesty. “Unfortunately, when you wait this long to tell your own story in your own words, it’s extremely hard to put the toothpaste back in the tube," Michael LaRosa, Jill Biden's communication director in 2021, told the New York Post. "She owed it to herself to be candid and transparent in the moment or the days after.” Another said her memoir should be called, "View From the East Wing, Blindfold On," adding, "Find it in the fiction aisle of your local bookstore."

As Americans staggered away from their televisions, the Biden White House tried to attribute the fiasco to jet lag and a common cold. “Why did we push out he had a cold if she thought he had a stroke?” an anonymous former Biden administration team member rhetorically asked the Post. 

Though the debate sealed Biden's political doom, it risked being a strategic disaster for then-incumbent Trump. Recall that, even as he led the polls, Trump aggressively pushed for an extraordinarily-timed debate to take place even before the Democratic convention officially made Biden the nominee. By prematurely thrusting Biden's crumbling mental capacity into the spotlight, Trump opened the door for the Democrats to substitute a more formidable foe. Fortunately for Trump, the leftists completely squandered the opportunity, railroading profoundly uncharismatic Kamala Harris into the presidential-nominee slot, and the rest is history. 

Tyler Durden Thu, 05/28/2026 - 08:50

Americans' Savings-Rate Slumps In April As Fed's Favorite Inflation Signal Soars

After accelerating significantly in March, The Fed's favorite inflation indicator - Core PCE (a measure of price changes in consumer goods and services that excludes volatile food and energy costs) - rose 0.2% MoM in April (less than expected +0.3% MoM), but pulled up the YoY measure to +3.3% (as expected) - its highest since Nov 2023.

The rise in Services costs (headlined by Housing & Utilities, Financial Services, and Healthcare) dominated the increase in Core PCE YoY...

The headline PCE jumped 0.4% MoM (+0.5% MoM exp) dragging the YoY up to +3.8% - the hottest read since May 2023

The impact of the war is evident in crude prices and the PCE's energy index, but arguably, this is as bad as it gets in terms of inflation...

Higher prices were met with higher spending (+0.5% MoM notional) but flat income growth (0.0% MoM)...

With the growth in spending versus de-growth in incomes more evident below...

Sending the savings rate plunging to its lowest since June 2022...

With the savings rate barely above record lows, it seems that Americans are digging into their savings to keep up with inflation. No wonder sentiment is so low...

Tyler Durden Thu, 05/28/2026 - 08:41

"It Wasn't Copied": Ferrari CEO Defends First EV After Design Backlash

Ferrari shares trading in Milan have not recovered since plunging the most in nearly eight months after the company unveiled its first EV sports car earlier this week, breaking with eight decades of petrol-powered tradition. The debut drew immense criticism, with one Wall Street analyst calling the new EV a "mix between a Honda Accord EV and Tesla."

By Thursday, Ferrari CEO Benedetto Vigna was on damage-control duty at an event in Modena, where he defended the design of the battery-powered, four-door, five-seat Luce, which costs a staggering €550,000 ($638,660), according to Bloomberg.

"The Ferrari Luce has nothing to do with electric cars you have seen from other players," Vigna said earlier today. "You have to see it and drive it to understand that it wasn't copied — not the interiors, not the exterior, not the performance."

Pope Leo was shown Ferrari’s first fully $640,000 electric car in Rome on Tuesday. The pope sat inside the Ferrari Luce and was presented with the vehicle’s steering wheel by Ferrari CEO Benedetto Vigna. pic.twitter.com/mIxAniwULm

— CBS News (@CBSNews) May 27, 2026

Vigna said, "Look at the people writing to us, the people placing orders. Some are existing clients and others are new."

"Maybe some people understood that Ferrari was going only electric. We will continue to make all types of powertrains," he added.

Vigna noted, "The final answer comes from clients."

Customers have already shunned Ferrari hybrid models, as a recent report by Goldman analyst Christian Frenes noted that these hybrid sports cars are depreciating far faster than their petrol-powered counterparts, suggesting buyers still prefer V-8 and V-12 combustion engines.

Earlier this week, AIR Capital analyst Pierre-Olivier Essig said the Luce looks like a "mix between a Honda Accord EV and a Tesla."

Frenes noted today that Luce's negative reaction was "overblown" ...  

He explained:

We view the strong market reaction to the Luce reveal as overblown and of less investment significance than media commentary suggest. While the Luce is Ferrari's most controversial product launch of late, we see limited near-term risk to estimates given that both investor and management expectations were already conservative ahead of the event. On long-term product strategy concerns, we equally view recent public commentary as an overreaction: management has explicitly reaffirmed its commitment to powertrain flexibility and made clear that the Luce's design language does not define future models.

Ferrari Luce vs. EU Peers: Specification and Pricing Benchmarking

For a fraction of the cost and with better all-around performance, the Tesla Model S Plaid outperforms the Luce.

Ferrari has been benchmarking the Model S Plaid.

Still valid imo, since Ferrari has been benchmarking this car for a couple of years: https://t.co/Td5h6F1Xez

You’d think they would surpass it. pic.twitter.com/trLuWBWX3C

— Nic Cruz Patane (@niccruzpatane) May 27, 2026

If car enthusiasts don't care about performance but want a similar design to the Luce, there is the Nissan Leaf.

The Luce risks joining the Mondial in Ferrari's hall of shame.

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Tyler Durden Thu, 05/28/2026 - 08:20

Futures Fall, Oil Rises As Mideast Violence Flares Up

US futures are but well off session lows, as part of a weaker risk tape after the US and Iran exchanged strikes, fueling doubts whether an end to the war is imminent and crushing hopes for a Hormuz deal (gasp). Overnight, US forces carried out airstrikes on an Iranian military site which Centcom described as "purely defensive" and designed to maintain the ceasefire; it also imposed new sanctions to prevent Tehran from profiting from vessels transiting the Strait of Hormuz. In response, Iran targeted the American airbase from which the attack originated. Centcom said that Kuwait also intercepted a ballistic missile launched toward it. While S&P futures initially tumbled as much as 0.5% on the news in overnight trading, they since recovered much of the losses, but were still down 0.2% as of 8:00am, with Nasdaq futures down 0.5%. In premarket trading, Mag7 names are mostly lower as Semis are sold and Software bid post earnings releases. Defensives and Energy are the notable outperformers as the market resumes its US / Iran playbook; EM likely to underperform DM. Bond yields are up 1-2bp as the yield curve bear flattens; the 10Y is up to 4.50%, after earlier rising to 4.53%. Crude prices are not seeing as dramatic of a response as earlier in the conflict; natgas is trading lower, Ags higher, and metals for sale as USD sees a bid. Today’s macro data focus is on PCE, Income, and Spending to gauge the depth of the impact from the Middle East Conflict with add’l updates to Durable / Cap Goods, Jobless Claims, and 26Q1 GDP revisions. Aside from a resumption of the kinetic conflict / failure for a deal, JPMorgan views inflation as the biggest risk to Equities with bond yields as the transmission mechanism. Today’s print will be important but given the status of the conflict, next month’s CPI print is likely the more important print. 

In premarket trading, Mag 7 stocks are mostly lower (Microsoft +0.9%, Meta +0.2%, Apple -0.2%, Amazon -0.4%, Alphabet -0.5%, Nvidia -1.1%, Tesla -1.3%)

• Braze Inc. shares (BRZE) are down 11% after the cloud—based software company reported its first-quarter results and gave an outlook. Despite the stock’s decline, analysts are broadly positive, and recommended buying on weakness.
• BRP Inc. (DOO) rises 8.1% after it boosted its revenue guidance for the full year, which beat the average analyst estimate.
• Caesars Entertainment (CZR) rises 2% after Fertitta Entertainment agreed to acquire the company in an all-cash transaction valued at about $17.6 billion.
• Dollar Tree shares (DLTR) rise 10% after the retailer boosted its adjusted earnings per share guidance for the full year above the consensus estimate after stronger-than-expected performance in the first quarter.
• Dominion Energy Inc. shares (D) rise 0.5% after Jefferies raised its recommendation on the utilities company to buy from hold on the NextEra Energy merger.
• Everpure shares (P) fall 11% as the computer storage company gave a full-year revenue guidance that implied slower growth in the second half of the year amid higher prices.
• HP Inc. shares (HPQ) drop 1.6% as higher memory chip prices weigh on the PC maker’s profit forecast for the third quarter.
• Marvell Technology shares (MRVL) fall 2.7% as the chipmaker’s modest beat failed to impress investors with high expectations.
• NCino shares (NCNO) rise 12% after the cloud banking company boosted its revenue guidance for the full year as subscription revenues increase on AI demand.
• Photronics shares (PLAB) fall 26% after it forecast adjusted earnings per share for the third quarter that missed the average analyst estimate.
• Shares in drone-related firms (UMAC +27%, RCAT +15%) are rallying after the Wall Street Journal reported the Trump administration is exploring funding deals with a group of drone companies.
• Synopsys shares (SNPS) are down 2% after the electronic design automation software company reported its second-quarter results.

In other news, Snowflake surged after the software maker gave a stronger-than-expected annual outlook and signed a $6 billion multi-year agreement to use Amazon’s cloud services and chips. In contrast, Salesforce results and outlook didn’t do enough to erase concerns over AI-related disruption. D.A. Davidson’s Gil Luria said the shift to AI for Salesforce is taking longer than expected. In terms of space exploration and drone technology, the Trump administration is said to be negotiating funding deals with drone companies designed to boost production and lower weapon costs, according to the WSJ. Space exploration has all the ingredients “for the next bubble squeeze,” according to Mike O’Rourke of Jonestrading. 

The latest flare-up between the US and Iran showed the fragility of their ceasefire, despite most traders viewing a lasting deal between the sides as only a matter of time. The prospect of oil-driven inflation is also building, prompting central bankers to increasingly warn that interest rates may need to rise. 

“The market is caught between two very different worlds,” said Aneeka Gupta, director of macro-economic research at Wisdomtree. “One where we get a deal, and you have a follow-through of a very powerful cyclical recovery, and another where the conflict process deepens the stagflation impact on the economy.”

WTI crude oil rose but remained below levels seen earlier in the week. Bloomberg Economics notes that Trump retains market-moving power on the commodity. “If we adjust for the drop in background volatility since the ceasefire with Iran began, each headline from the White House still moves crude-oil prices by the same amount as it did in the early days of the war,” he says. For stocks, volatility remains low and the ‘vol of vol’ gauge hit a rarely seen sub-90 reading on Wednesday.

Less than a day after Federal Reserve Governor Lisa Cook warned that inflation was headed in the wrong direction, Minneapolis Fed  President Neel Kashkari told CNBC that consumer prices were still “much too high.” The Fed’s Philip Jefferson said that inflationary risks remained tilted to the upside even as he expects the effects of tariffs and higher energy costs to wear off. The ripple effects of the war will occupy the European Central Bank even after the conflict is resolved, according to Chief Economist Philip Lane.

Elsewhere, the AI bull case faces a headwind in the form of rising token costs, raising the question of whether escalating Large Language Model expenses now present a bigger risk to the AI trade than equity valuations. The Silicon Data LLM Token Expenditure Index, measuring the dollar cost per one million tokens, has doubled in six months. 

Goldman's Delta One head Rich Privorotsky joined the discussion overnight with the following observation on Token economics:

"Reading that DeepSeek reportedly cut token pricing by 75% and Xiaomi’s MiMo by almost 99% immediately brought back memories of the old Groupon subsidy wars and the inevitable race to the bottom economics of commoditized delivery. There’s also been a massive rise in open-source enthusiasm. I was honestly blown away running an 8B version of Qwen locally on a four-year-old MacBook last night (ok it couldn't do much but it felt downloading the internet in 5gb...18ms ago you would have need a data center for this!). Notably, Chinese onshore datacenter and AI infrastructure names have diverged sharply post release (they all went down).  Maybe a bit of a leap here but I think the market is beginning to ask whether token cost compression temporarily breaks the logic of pure Jevons paradox demand expansion. It's not whether demand ultimately rises… it probably does… but whether there is a meaningful lag where cheaper tokens simply cannibalize higher cost inference before entirely new use cases emerge. Nobody is arguing open source models are fully comparable to frontier systems, although the quality gap is clearly narrowing quickly. The more important point is that a huge percentage of enterprise tasks simply do not require frontier level reasoning or expensive inference. That becomes a major boardroom conversation into Q2/Q3. Rationalization of token spend may become just as important as the AI growth narrative itself, particularly when “90% of the output for 10% of the cost” becomes increasingly viable through open source alternatives."

Earnings and economic data will also be in focus for traders today looking for signs of the “K-shaped” economy with results from a number of consumer facing corporates, while the Fed gets an important inflation print ahead of Kevin Warsh’s first FOMC meeting as chair next month. Bloomberg expects the PCE deflator to slow from March’s red-hot print to a still-hot reading in April, driven by gas and food prices. A number of Fed speakers gave views overnight. Jefferson said he expects inflation to cool later this year as the effects of tariffs and higher energy costs wear off, though he warned inflationary risks remain tilted to the upside. Kashkari warned that consumer prices remain “much too high.” Meanwhile Goolsbee again cautioned that increased investment and spending due to a projected surge in future productivity growth may be inflationary. 

Thursday data is expected to show that the US personal consumption expenditures price index jumped 3.8% in April from a year ago. That would put inflation a full percentage point higher than it was in February, marking the biggest two-month acceleration since 2021.

Holger Schmieding, chief economist at Berenberg Bank, said the fact that markets have given up on Fed rate cuts for the foreseeable future means it will take a major downside surprise in core PCE for bonds to move significantly. “For the question if and by how much the Fed may raise rates later on, we need to watch whether the Iran shock filters through into non-energy prices,” Schmieding said.

The caution in markets and worries that equities have run too hard are misplaced, said Mathias Heim, chief investment officer at Belle Capital. “If a peace deal takes another two weeks or two months, I don’t think markets care as much anymore unless oil meaningfully breaks higher,” Heim said. “The elephant in the room is the AI capex cycle, which drives profit growth and multiples. Structurally, equities remain the go-to asset class.”

In other news, Perella Weinberg Partners is cutting almost 10% of its workforce, including a dozen partners, to channel resources into higher-performing areas of its business. Eli Lilly said it will press ahead with global drug launches despite uncertainty over the Trump administration’s Most-Favored-Nation (MFN) pricing proposal.

Europe’s Stoxx 600 fell 0.7%; tech saw the biggest gains, rebounding from losses in the prior session, while healthcare and media fell. Here are the biggest movers Thursday:

• Soitec shares climbed as much as 21%, resuming their stellar year-to-date rally after three days of losses
• PPHE Hotel Group jumped as much as 25%, the biggest jump since 2011, after the owner and operator of upscale hotels said it received an indicative takeover proposal worth £22 per share from Fattal Hotel Group
• Salvatore Ferragamo gained as much as 9.3%, the most since May 7, after saying it has launched a share buyback program for up to 5% of its share capital
• Computacenter shares rose as much as 1.9%, hitting a record high, after the company said it is buying a value-added reseller focused on the US federal government market, which will immediately boost earnings upon completion
• X-Fab shares fell as much as 8.7% on Thursday, giving back some gains after the stock was recommended by a popular X account a day earlier
• Shares in UK homebuilders fell after a series of downgrades from Goodbody, which highlights the sector’s profit-margin headwinds stemming from a weakening macro climate, particularly higher interest rates, and build-cost inflation
• Elekta shares dropped as much as 16%, the most since July 2025, after the Swedish medical technology firm reported sales and orders for the fourth quarter that disappointed analysts

A gauge for Asian stocks snapped its longest winning streak since February: Asian equities retreated from a record, ending a five-day winning streak, as investors assessed conflicting signals from the US and Iran on prospects for a deal to end the war. The MSCI Asia Pacific Index fell as much as 1.9%, the most since May 15. Most equity benchmarks in the region were in the red, with the Hang Seng Index falling nearly 2%. Taiwan’s Taiex Index turned negative after hitting an intra-day record earlier in the day. The MSCI Asia Pacific Index gained 5.3% in the past five sessions. Investor sentiment has turned cautious due to elevated energy prices and the risk of renewed inflation, with the Strait of Hormuz still effectively shut. President Donald Trump said he was “not satisfied” in negotiations with Iran, dampening expectations for an imminent breakthrough in the Middle East conflict. Elsewhere in Asia, Chinese semiconductor stocks extend gains as Huawei’s chip breakthrough continues to buoy market sentiment. Markets in India and Indonesia are closed for holidays.

In FX, the Bloomberg Dollar Spot Index is edging higher for a third straight day while the Japanese yen is the best performing G-10 currency, rising a few pips against the greenback. GBP/USD declines 0.2% to 1.3405, down a third day

In rates, treasury futures are off session lows in early US session, but remain under pressure with yields 1.5bp-3bp cheaper across a flatter curve. Front-end tenors lead the selloff with yields 3bp cheaper on the day after climbing nearly 5bp; WTI crude futures remain 2.7% higher after rising as much as 3.8%. 10-year TSY near 4.5% is 1.6bp higher, slightly underperforming bunds and gilts in the sector. Gains in oil weigh after renewed attacks in the Persian Gulf erode expectations of a peace accord. New Zealand’s bonds pared losses after the government announced a plan to reduce bond issuance in the coming years. Focal points of US session include 7-year note auction at 1pm New York time and economic data including PCE price indexes and 1Q GDP revision.  This week’s Treasury auctions conclude with $44 billion 7-year note at 1pm New York time, following solid results for 2- and 5-year note sales. WI 7-year yield near 4.34% is about 16.5bp cheaper than last month’s, which tailed by 0.5bp. IG dollar issuance slate empty so far, however at least one issuer stood down Wednesday, when 12 offerings totaling $21.3 billion were priced, led by Goldman Sachs’ $9b four-part transaction. Issuers paid about 3bps in new issue concessions on deals that were 3.7 times covered.

In commodities, Brent crude futures for July are up 3% near $97 a barrel having topped $98 earlier after renewed attacks in the Persian Gulf fueled doubts over whether an end to the Iran war is imminent. Precious metals and Bitcoin are declining. 

Today's economic data slate includes April personal income/spending (with PCE price indexes), weekly jobless claims, April durable goods orders, 1Q GDP revision (all at 8:30am) and April new home sales (10am). Fed speaker slate includes Williams (8:55am), Musalem (10:15am, 1:10pm) and Barkin (3pm). 

Market Snapshot

Top Overnight News

• The US struck Iranian military targets for the second time this week and Kuwait said it responded to missile and drone threats. Iran targeted the US base where the strikes originated, state-run Press TV reported. BBG
• A US oil tanker intended to cross the Strait of Hormuz by turning off radar system, but IRGC Navy fired at it and forced it to turn back, while US army fired into Bandar Abbas but caused no damage. This was the cause of the earlier reported explosions. No casualties or damages were caused by the US, which fired at a scorched-earth area. Separately, Iran's Navy forced four vessels to turn back in the Strait of Hormuz by firing warning shots: Tasnim
• China's central bank has instructed banks to boost lending this month, people with knowledge of the matter said, underscoring Beijing's continued efforts to support an economy squeezed by higher energy costs ‌and stubbornly weak domestic demand. RTRS
• Hong Kong plans to launch a gold-clearing system by July, giving it a first-mover advantage over rival Singapore, which has announced similar plans without a timeline. BBG
• South Korea’s central bank held rates steady at its first meeting under Gov. Shin Hyun-song, though it signaled tighter policy ahead as it raised its forecasts for economic growth and inflation. WSJ
• Federal Reserve governor Lisa Cook said she is prepared to raise interest rates if disinflation does not appear in a timely manner. For now, the right course of action is to hold rates steady, but risks still remain tilted toward higher inflation. WSJ
• Goolsbee warned that the persistent combination of energy shocks and stubborn inflation could push the U.S. economy into a “stagflationary” direction characterized by a simultaneous rise in unemployment and price growth. WSJ
• South Africa’s central bank is set to raise borrowing costs for the first time in three years today, with the benchmark interest rate forecast to increase to 7%. BBG
• The ECB’s Philip Lane said ripple effects of the Iran war, such as on the labor market, will occupy policymakers even after the conflict is resolved. BBG
• Amazon Web Services has signed up cloud storage company Snowflake as its latest chips customer, as the proliferation of artificial intelligence agents continues to drive high levels of demand for computing hardware. SNOW plans to pay $6 billion over the next five years for access to Amazon’s Graviton chips inside AWS data centers. SNOW +35% premkt on strong outlook from last night’s print.  WSJ
• "The momentum factor has historically stalled around May and July but seen a significant ramp up in June with the factor actually being the highest performing seasonally in the month. We do think the move higher came early this year, and while we still think there is a potential for upside in the leaders, we are more concerned with unwind risk and squeezes in the laggards at the current moment": Goldman

Iran conflict news

• US official said US military carried out new strikes on an Iranian military site and shot down multiple Iranian drones that posed a threat to US forces and commercial maritime in the Strait of Hormuz.
• IRGC said it targeted the US air base in response to the US aggression earlier near Bandar Abbas Airport, according to Tasnim. said:. Any further US attacks would trigger a more decisive response. Washington bears responsibility for consequences.
• Military source tells Tasnim that hours ago, a US oil tanker intended to cross the Strait of Hormuz by turning off radar system, but IRGC Navy fired at it and forced it to turn back, while US army fired into Bandar Abbas but caused no damage. This was the cause of the earlier reported explosions. No casualties or damages were caused by the US, which fired at a scorched-earth area.
• Iran's Navy forced four vessels to turn back in the Strait of Hormuz by firing warning shots, according to Tasnim.
• Sound of three explosions heard from the east of Bandar Abbas, Iran, with exact location and source of the sounds still unclear, while air defences were activated for a few minutes, according to Fars News Agency.
• "Hearing the sound of multiple explosions in Kuwait", ISNA reported, "Kuwait’s official news agency stated that air defense systems are currently countering missile and drone attacks" [likely referring to earlier reported].
• Air raid sirens sounding in Kuwait, while Kuwaiti Army said air defense intercept hostile missile and drone attacks, according to Al Hadath.
• US Treasury Secretary Bessent said Gulf Strait Authority action targets Hormuz tolls, adds the Treasury is maintaining maximum pressure on Iran.
• Iranian National Security Council Official Bagheri said Iran’s assets must be released unconditionally, Tasnim reported.
• US issues fresh Iran-related sanctions by adding Persian Gulf Strait Authority to its SDN list.
• US has carried out a defence operation in Bandar Abbas, Iran, according to Faytuks Network citing an official that said, “the US will act to safeguard its regional interests, and this does not affect the ceasefire”.
• Iran Supreme National Security Council Deputy Secretary Baqeri met with Russian Deputy Foreign Minister Ryabkov, and discuss a number of important issues on the current international agenda with focus on the situation around Iran's nuclear program. Via IRNA/Telegram.
• Deputy Head of Public Relations for the IRGC Aerospace Force, Ali Naderi, said on Wednesday If enemies launch military action again, the Islamic Republic's response will be different from anything seen so far. said: "...they will face a new image of Iran".
• Head of Iranian Parliament National Security Committee said Iran will not be pushed back by US President Trump's rhetoric from its red lines: rights to enrich uranium and its possession, authority over the Strait of Hormuz and removal of sanctions.
• IRIB reporter said no signs of an explosion have been seen in Bandar Abbas, while some people have heard the sound of this explosion and none of the officials concerned about the matter have issued any official statement.
• Axios reported that US military had shot down 4 Iranian drones targeting ships and an Iranian drone launcher on the ground.
• Israeli fighter jets carry out attack on the city of Tyre in southern Lebanon, according to Mehr News Agency.
• Hamas spokesperson said the Gaza ceasefire agreement faces risk of collapse due to occupation's crimes and ongoing violations, Al Jazeera reported.
• IDF said it's striking Hezbollah infrastructure in the area of Tyre in southern Lebanon.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were pressured amid a flare-up of geopolitical tensions in the Middle East after the US conducted another defensive operation in which it attacked a launch site and shot down drones after they posed a threat to US forces and commercial maritime in the Strait of Hormuz, while the IRGC said it responded by attacking the US base where the US aggression originated from. ASX 200 retreated amid the geopolitical escalation and with sentiment not helped by mixed data in which capex topped estimates, but household spending disappointed. Nikkei 225 was initially choppy but ultimately retreated amid the rebound in oil prices and increased geopolitical tensions between the US and Iran. Hang Seng and Shanghai Comp were negative but to varying degrees, with the Hong Kong benchmark underperforming following recent earnings and mixed tech fortunes.

Top Asian News

• S&P affirms Hong Kong at AA+, outlook stable.
• Japan's ruling party proposes allowing the government to issue bridging bonds to fund certain expenditures, which can be excluded from debt-to-GDP ratio and primary balance calculations.
• Australia's APRA maintained current macroprudential policy setting following a review.
• Japan considers bridging bonds for growth investments, according to Nikkei.
• Korea's NPS has lifted its domestic stock weight target to 20.8% (prev. 14.9%), Bloomberg reports

European bourses (STOXX 600 -0.6%) are broadly lower this morning as markets digest the recent flare-up between the US and Iran. In brief, the US struck Iranian military bases, whilst the IRGC responded with its own attacks on US air bases. Furthermore, Iran’s Navy stated it forced four vessels to turn back in the Strait of Hormuz by firing warning shots. Aside from these flare-up, updates since have been lacking – with markets tentatively waiting for whether this round of strikes will lead to further escalation. As a reminder, Iran has taken the position that further strikes on its land will lead to a war outside of the region. European sectors hold a strong negative bias. Tech leads, followed closely by Energy, whilst Media and Healthcare lag. Tech appears to be rebounding from recent losses, with fundamental drivers lacking, despite the higher yield environment; action potentially driven by post-earnings strength in Snowflake, whilst Marvell’s headline metrics were strong. US equity futures (ES -0.1% NQ -0.3% RTY -0.3%) are in the red this morning, following the action seen in APAC/European trade. The day ahead is packed with key US data, including US PCE (Apr), GDP 2nd estimate and jobless claims. Previewing PCE in brief, following hotter than expected CPI and PPI reports, analysts updated econometric models point to April core PCE inflation of between +0.3-0.4% M/M (prev. +0.3%). In terms of pre-market movers: HP (-2.2%, strong headline metrics, though downgraded its FY outlook), Marvell (-1.5%, headline metrics beat and provided upbeat outlook; though highlighted supply chain constraints), Snowflake (+35%, secures a USD 6bln Amazon deal).

Top European News

• Italian Consumer Confidence (May) 93.4 (Prev. 90.8).
• Italian Business Confidence (May) 87.9 (Prev. 87.9).
• Swedish Economic Tendency Indicator (May) 99.3 (Prev. 99.0).
• Swedish Consumer Inflation Expectations (May) 5.9% (Prev. 6.8%).
• Swedish Consumer Confidence (May) 92.4 (Prev. 91.5).
• Swedish Business Confidence (May) 103.3 (Prev. 103.3).
• Swedish Balance of Trade (Apr) -7.30B (Prev. 9.3B).
• Spanish Retail Sales MoM (Apr) M/M -1.5% (Prev. 1.2%).
• Spanish Retail Sales YoY (Apr) Y/Y 0.8% (Prev. 4.1%).

FX

• G10s are broadly lower against the Buck with the Dollar Index +0.1% as oil prices rebound on US and Iran exchanging fire. General sour sentiment across assets sees high-beta underperform despite central bank pricing moves re. Antipodeans on Wednesday, while cyclicals are also weaker. JPY is a touch firmer against the USD, and trades around 159.30.
• The Buck marks its third consecutive session of gains and marked a fresh May high amid the US-Iran flare-up (See Iranian War Day 90 analysis on headline feed). The Dollar index has moved further away from significant DMAs, which are now well below and with no sign of an immediate resolution and repricing of G10 rates, with oil far from recent highs and Waller shifting hawkish, the recent drivers. Today’s driver will be the PCE and GDP reports, alongside Fed speak from Williams, Musalem and Barkin.
• AUD is the weakest currency in the G10 space on the day amid the general geopolitical risk tone, lower-than-expected Aussie inflation data and the popular carry trade against NZD vulnerable to a Hawkish RBNZ this week. On Wednesday, headlines pointed out that the Antipodean cross marked the largest one-day decline since 2016. The cross found some buyers just above 1.2050, though not enough to halt its declines. AUD/NZD -0.1% on the day. MUFG writes “...with the pre-emptive nature of the RBA policy approach allowing a longer period of pause, a further extension lower in AUD/NZD seems likely.”
• EUR is a touch lower against a stronger Buck with firmer energy benchmarks hurting the single currency. Remains a lack of EZ-specific newsflow as focus exclusively lies on geopolitics, which drives the Greenback. 1.16 remains supported for now, where it found buyers below overnight. ING highlights risks “in our view, should the US-Iran stalemate continue. We still see some risks of a 1.150 test before a rebound, but intraday trading remains highly headline-dependent.”

Central Banks

• Fed's Goolsbee (2027 voter) said energy inflation has been more persistent than expected and warns that Asia faced an old-style stagflation shock.
• Fed Vice Chair Jefferson (voter) said focus remains on 2% inflation target and noted US labour market is very resilient to the energy shock.
• Fed's Kashkari (2026 voter) said labour market is in decent shape, consumer prices remain too high, and inflation remains the top priority.
• Fed Vice Chair Jefferson (voter) said has not prejudged outcome of June FOMC meeting and monetary policy is well positioned to respond to the economy. said:. Is firmly committed to getting inflation back to 2%. Risks around inflation outlook are tilted to upside. Expects inflation to wane later this year on fading tariff, energy hits. Energy shock downside risk to growth, upside risk to inflation. Recent US economic activity has been solid. Labour market stable with risks tilted toward downside. US is not immune to oil-related energy shocks.
• Fed's Cook (voter) said she is atuned to inflation expectations, also watching oil. Would be problematic if oil prices move in the wrong direction.
• Japanese Finance Minister Katayama said expects the BoJ to closely coordinate with the government, adds cabinet is in agreement specific monetary policy means are left to the BoJ. said:. Hope the BoJ will conduct appropriate monetary policy to achieve 2% price targets stably, sustainably and rising wages. There is nothing she can add regarding the PM's meeting with BoJ Governor Ueda beyond what Governor Ueda revealed after the meeting.
• BoJ Governor Ueda said we have seen supply shocks in food and energy, which even if temporary, can lift the overall inflation rate because of their cumulative impact.
• ECB President Lagarde speaks on "When It Matters Most: Upholding Independence in Challenging Times".
• ECB's Lane said even if initial energy shock starts to reverse, the second round will be with us for a while. said: Even if there is some kind of resolution to the Iran war, conflict has gone on for so long, there may be repositioning in terms of optimal diversification strategy.
• RBNZ Governor Breman said the board considers that inflation pressures will intensify in the future and the cash rate needs to be raised further.
• RBNZ Governor Breman said the weak labour market will suppress wage growth, adds certain parts of the New Zealand economy remain in good shape including agriculture and parts of manufacturing. said it will take some time to see the full effect of higher oil prices across wider sectors.
• China's PBoC is to reportedly guide banks to boost May lending amid weak credit issuance, sources suggest.
• BoK keeps 7-day Repo Rate unchanged at 2.50%, as expected.
• BoK Governor Shin said we will act decisively to stem any herd-like behaviours in the FX market, adds there may be technical differences within board members about when to hike, but board members agree the direction should be tightening.
• BoK Governor Shin said Middle East war uncertainty persists and oil stability is to take time to return, adds local growth expansion driven by semiconductor boom.
• BoK said board members Ryoo and Chang dissented to Thursday's rate decision and called for a rate hike.

Fixed Income

• A softer start to the day for fixed benchmarks, as the energy space reacts to renewed strikes from both the US and Iran. Bunds and USTs hit lows overnight, with downside of c. 45 and 12 ticks respectively. Since, the space has lifted off worst levels as the intensity of newsflow slows and energy eases from best. However, the space remains in the red heading into a relatively busy session, particularly in the US.
• Bunds hit a 125.53 low overnight, reacting to the US and Iran action, and also as the language from US President Trump regarding Oman got greater attention. The intensity of newsflow has since slowed, and Bunds have managed to lift off lows but remain in the red by a handful of ticks.
• Today's European docket has several ECB officials and the April Minutes. From the officials, any remarks which decrease/increase the odds of a June move will, of course, be eyed. Similarly, from the Minutes, insight into how broad the discussion was around tightening and while the decision was unanimous for a hold, did any member(s) initially express a preference for taking action at that point.
• Gilts gapped lower by 35 ticks, taking out the trough from Tuesday at 87.99 and as such notching a new WTD low. Though, one that remains comfortably clear of last week's 84.96 contract base. For the UK newsflow remains relatively light as we count down to the mid-June by-election, after which the Labour leadership contest will step up a gear, irrespective of the result.
• USTs in-fitting with Bunds. Notched a 109-17+ base overnight, and has lifted a 109-29 high, to unchanged on the session. The US docket ahead is packed with multiple Fed officials, whose remarks will continue to be scrutinised for insight into what the outcome of the first meeting under Warsh will be. Additionally, April's PCE is seen ticking higher to 3.8% Y/Y (prev. 3.5%), but moderating to 0.5% M/M (prev. 0.7%).
• UK sells GBP 1bln 0.375% 2030 Gilt via tender: b/c 4.19x (prev. 2.97x), average yield 4.277% (prev. 3.796%).
• Italy sells EUR 7.25bln vs exp. EUR 6-7.25bln 3.15% 2031, 3.80% 2036, 2.25% 2036 BTP and EUR 3.75bln vs exp. EUR 2.5-3.75bln 3.237% 2036, 3.237% 2035 CCTeu.

Commodities

• Overnight, the main geopolitical update has been the US-Iran flare-up. The US carried out new strikes near Bandar Abbas after accusing Iran of threatening maritime traffic in the Strait of Hormuz. Meanwhile, Iran responded with strikes on a US air base and claimed it forced vessels, including a US-linked tanker, to turn back in Hormuz. Air raid sirens sounded in Kuwait as Kuwaiti air defences intercepted hostile missiles and drones.
• Despite this, efforts for negotiations are seemingly continuing. As a reminder, the US rebuffed the unofficial MoU released by Iranian State Media (which suggested Iran and Oman are to manage the Strait of Hormuz).
• Russia's Transneft plans to expand capacity of Espo oil pipeline, RIA reported; oil shipments for export via the Transneft system in 2026 will be comparable to the 2025 level.
• WTI Jul and Brent Aug futures rose to highs of around USD 92.50/bbl and USD 96.00/bbl, respectively, amid the skirmish. Prices have since waned off highs back to around USD 90.75/bbl and USD 94.50/bbl respectively amid a lack of further attacks and with nothing to suggest negotiations are not still intact. Dutch TTF similarly rose above EUR 48/MWh before settling around EUR 47.50/MWh at the time of writing, +2.5% intraday.
• Spot gold and silver are softer but off lows, in tandem with price action across energy. Spot gold briefly dipped under its 200 DMA (USD 4,394/oz) and trades towards the lower end of a USD 4,366-4,462.58/oz range. Traders may be looking ahead to the US PCE metrics as a source of impetus. Following hotter-than-expected CPI and PPI reports, analysts’ updated econometric models now point to April core PCE inflation of +0.3-0.4% M/M, up from the prior +0.3%. That being said, a major geopolitical update could overshadow the data in this fluid environment.
• Base metals are mostly softer, and to varying degrees, with price action somewhat muted given the lack of macro newsflow. Overnight, copper extended declines amid the downbeat mood in Asia following reports of the US and Iran's retaliatory strikes, but clambered off its worst levels since. 3M LME copper resides towards the top end of a USD 13,465.80- 13,595.97/t range.
• Iran has restored production at the South Pars industrial hub to its pre-war capacity following an intensive repair operation, according to PressTV.
• US Private Inventory Data (bbls): Crude -2.8mln (exp. -4.4mln), Distillates +11.0mln (exp. -2.0mln), Gasoline -3.2mln (exp. -2.9mln), Cushing -2.9mln.

Trade/Tariffs

• China's MOFCOM said it is negotiating with the EU within the WTO over EU steel curbs; adds China-EU economic relations are mutually beneficial.
• EU is to broaden import quotas and tariffs against China, according to the bloc's industry commissioner, cited by FT.

Geopolitics (ex Iran)

• Russia's Transneft plans to expand capacity of Espo oil pipeline, RIA reported; oil shipments for export via the Transneft system in 2026 will be comparable to the 2025 level.
• Russian intelligence chief said NATO is making preparations for a large-scale conflict on the eastern border, Sky News Arabia reported.
• Ukrainian military said it has attacked Russia's Tuapse oil refinery (240k BPD).
• EU Foreign Affairs Policy Chief Kallas said Russia is on the back foot on the battle field, adds should not walk in Russia's trap concerning discussions who should be at the negotiating table and it should be about substance.
• Ukraine President Zelensky submits a draft law on ratification of loan agreement between the Ukraine and EU, according to the Ukraine Parliament website.
• North Korea's Foreign Ministry states that the country will never denuclearise, while it accused US-led Quad of maintaining hostile stance towards Pyongyang and other regional nations, according to KCNA.

US Event Calendar

• 8:30 am: Apr Personal Income, est. 0.4%, prior 0.6%
• 8:30 am: Apr Personal Spending, est. 0.5%, prior 0.9%
• 8:30 am: Apr PCE Price Index YoY, est. 3.8%, prior 3.5%
• 8:30 am: Apr Core PCE Price Index MoM, est. 0.3%, prior 0.3%
• 8:30 am: Apr Core PCE Price Index YoY, est. 3.3%, prior 3.2%
• 8:30 am: May 23 Initial Jobless Claims, est. 210.5k, prior 209k
• 8:30 am: May 16 Continuing Claims, est. 1784k, prior 1782k
• 8:30 am: Apr P Durable Goods Orders, est. 4%, prior 0.8%
• 8:30 am: Apr P Durables Ex Transportation, est. 0.5%, prior 0.9%
• 8:30 am: 1Q S GDP Annualized QoQ, est. 2%, prior 2%
• 8:30 am: 1Q S Personal Consumption, est. 1.6%, prior 1.6%
• 8:30 am: 1Q S GDP Price Index, est. 3.6%, prior 3.6%
• 8:30 am: 1Q S Core PCE Price Index QoQ, est. 4.3%, prior 4.3%
• 10:00 am: Apr New Home Sales, est. 660.09k, prior 682k

Central Bank speakers

• 8:55 am: Fed’s Williams Speaks at Reykjavík Economic Conference
• 10:15 am:Fed’s Musalem Speaks in Reykjavik
• 1:10 pm: Fed’s Musalem Appears on Bloomberg TV
• 3:00 pm: Fed’s Barkin Speaks in Moderrated Discussion

DB's Jim Reid concludes the overnight wrap

One skill required in this job at the moment is adaptability as the tone has all changed in the last couple of hours with Oil back up and equities down after the US carried out another series of defensive strikes and imposed sanctions preventing Iran from profiting from Strait of Hormuz traffic. According to a US official they shot down some Iranian drones fired at a commercial ship and also struck an Iranian drone launching site near the strait. They claim the ceasefire still holds with the Irainian's claiming they targeted a US airbase in retaliation.

This has led to Brent rallying +3.92% this morning to $97.99/bbl after falling -5.31% yesterday and to a one-month low of $94.29/bbl. Equity markets are lower across the board after a decent day yesterday.

It's been a busy 24 hours for headlines on the war.

The main one yesterday came from Iran’s state TV, who reported on an unofficial draft for an interim peace deal. According to them, this proposal would see maritime traffic through the Strait of Hormuz return to normal within a month, while the US would lift its blockade on Iranian ports. So initially, there was a clear rally as hopes grew that the Strait would reopen. However, we then heard from the White House later on, who said this report was a “complete fabrication”, which dampened hopes for an imminent deal. And Trump also said in a PBS interview that Iran wouldn’t get sanctions relief for giving up their highly enriched uranium. Just after Europe closed Trump said that he was "not satisfied" with the current state of negotiations and that "Maybe we have to go back and finish it".  And shortly after the US close, we heard a senior Iranian parliamentarian push back on Trump’s rhetoric, saying it would not deter Iran from its “red lines” on enriched uranium, authority over the Strait of Hormuz, and the removal of sanctions.

Given the rally in Oil, US Treasury yields are back up 4 to 4.5bps across the curve this morning with the 10yr yield at 4.53% as I type after a 5-day rally. S&P (-0.37%) and Nasdaq (-0.80%) futures are lower after the cash markets in yesterday's session hit all time highs at the same time, along with the DOW, for the first time in 2026.

In Asia the KOSPI (-3.61%) is the largest underperformer with the Hang Seng (-2.12%) also burdened by weakness in technology shares, along with the Nikkei (-1.34%). The S&P/ASX 200 (-1.59%) is also weak. Mainland Chinese stocks are down less than a percent.  
The session yesterday went pretty well with the decline in oil prices meaning that concerns about inflation eased, with investors pricing out the chance of aggressive rate hikes this year. We saw that in several ways, but the US 1yr inflation swap (-2.2bps) hit a two-month low of 3.03%, and the Euro 1yr inflation swap (-9.3bps) also fell to 3.36%. So that pushed central bank pricing in a slightly more dovish direction, with the probability of a Fed rate hike by December down to 62% by the close, having been at 66% the previous day. Similarly at the ECB, the amount of hikes priced by December was also down to 58bps by the close, down –2.1bps from the previous day. These are all giving up some of these gains this morning.  

We have US core PCE to look forward to today which is an important number. This comes after some hawkish comment from Fed Governor Cook late in the US session, who said she was “attuned to the risk that elevated inflation will become embedded” and “prepared to raise rates, if the expected disinflation does not appear in a timely manner”.

Before this morning's sell-off, equities saw a mixed performance yesterday as investors grappled with the various headlines. In the US, the S&P 500 (+0.02%) and Nasdaq (+0.07%) narrowly posted new record highs, while the Mag-7 (+0.92%) outperformed. Those gains came despite the Philly semiconductor index retreating (-1.36%) and decliners outnumbering advancers in the S&P for a second session running. In Europe, the STOXX 600 (+0.03%) closed within 1% of its record high from February, with gains for the FTSE 100 (+0.13%) and the CAC 40 (+0.43%) outweighing a decline for FTSEMIB (-0.64%). European Stoxx futures are down -1.3% this morning as I type in a big reversal for this time of day.  

Otherwise yesterday, there wasn’t much data, although a few releases from the US were generally positive. For example, the ADP’s weekly report of private payrolls showed a healthy increase of 35,750 per week in the four weeks ending May 9. Then shortly after, we also found out that the Richmond Fed’s manufacturing index was up to a 4-year high of 13 in May (vs. 4 expected). So overall, the numbers cemented the picture of ongoing resilience in the US economy.  

Looking at the day ahead, and US data releases include the PCE inflation for April, weekly initial jobless claims, and the second estimate of Q1 GDP, Otherwise, Central bank speakers include ECB President Lagarde, the ECB’s Lane, Cipollone and Schnabel, the Fed’s Williams, Musalem and Barkin, and the BoE’s Breeden. We’ll also get the ECB’s account of their April meeting.

Tyler Durden Thu, 05/28/2026 - 08:14

FBI Arrests CIA Official With $40 Million in Gold Bars, $2 Million In Cash Stashed in His Home

In what may be the most bizarre story of the week, if not all of 2026, the NYTimes reports that a senior CIA official was arrested last week after investigators found hundreds of gold bars worth over $40 million stashed in his Virginia residence, a non-fiat fortune that he apparently brought home from work, according to court papers.

The CIA official, David Rush, is being held in jail while he awaits a detention hearing in the coming days on charges of stealing public money by filling out fraudulent time sheets. But, as the NYT admits, the charging documents filed in Alexandria, Va., still leave a lot unanswered about his recent conduct.

The only formal charge lodged against Rush is that he inflated his academic credentials and obtained military leave pay worth tens of thousands of dollars. The authorities say he falsely claimed to be a member of the Navy Reserve when he was discharged.

In a 2009 application for a government position for which he was subsequently hired, Rush allegedly lied about obtaining a bachelor's degree from Clemson University and a master's degree from Rensselaer Polytechnic Institute, according to the affidavit. The investigation revealed that Rush never attended or obtained a degree from either institution, according to the affidavit. 

The court papers describe Rush as a “former senior executive service-level employee at a United States government agency.” According to NYT sources, he until very recently held a senior position at the CIA.

In a joint statement, the CIA and FBI said the arrest occurred on May 19, after the agency alerted the bureau.

“After a C.I.A. internal investigation identified potential violations of the law, C.I.A. Director John Ratcliffe referred the information to the F.B.I. for a law enforcement investigation,” the statement said.

From last November to March, the court papers say, Rush asked for, and received, “a significant quantity of foreign currency and tens of millions of dollars in gold bars for work-related expenses.”

When the CIA conducted a review of where the gold and currency were stashed, the agency was “unable to locate the gold bars or significant amounts of the foreign currency,” according to court papers.

On May 18, FBI agents searched Rush’s home and found “approximately 303 gold bars, each of which weighed approximately one kilogram,” according to an affidavit. Based on the price of gold, the affidavit said, the estimated value of the gold exceeded $40 million. Investigators also seized nearly three dozen luxury watches, many of them Rolexes.

The affidavit also claims that Rush lied about his military credentials while applying to enter the senior executive service level ranks and committed "timecard fraud" regarding military leave. He allegedly claimed 744 hours of military leave, resulting in $77,000 in compensation, since being honorably discharged from the Navy in 2015, according to the affidavit.

The biggest question of all remains unanswered: the court papers do not indicate why Rush appears to have kept so much gold, and $2 million in U.S. currency, not to mention 35 Rolexes in his home, or what work project would have required him to amass such wealth.

Below is the full charging affidavit from the criminal case (1:2026mj00177 USA vs Rush, Virginia Eastern Court).

David Rush Affidavit by Zerohedge

Tyler Durden Thu, 05/28/2026 - 07:55

UK Targets Kremlin-Linked Crypto Network In Latest Sanctions Round

Authored by Micah Zimmerman via BitcoinMagazine.com,

The United Kingdom has unveiled a fresh package of sanctions against Russian financial structures that use crypto and offshore payment routes to sidestep restrictions imposed after the invasion of Ukraine. 

The measures focus on the Kremlin-backed A7 network, a ruble-based settlement system, and a cluster of exchanges and firms that route payments through Kyrgyzstan and Georgia.

Announced by Foreign Secretary Yvette Cooper, the package covers 18 new designations that target what London describes as the backbone of Russia’s illicit finance channels. 

Officials say the list includes a Kyrgyz bank suspected of handling A7 flows, a major global cryptocurrency exchange that has sent more than 1.5 billion dollars to entities close to the Kremlin, and three Georgian companies that run Russia-focused trading platforms.

The A7 network has emerged as a central hub in Russia’s attempts to blunt the impact of Western sanctions on its war economy. Investigations by independent researchers describe A7 as a cross-border settlement platform that uses a ruble-backed token, branded A7A5, and links to Promsvyazbank, a state lender that supports the Russian defense sector.

According to the UK government, A7 claims to have moved more than 90 billion dollars during the past year, a sum that officials say approaches half of Russia’s annual military spending. 

Separate journalistic probes have found that A7-connected wallets and entities handle a significant share of cross-border transfers for sanctioned oligarchs and state-linked businesses.

The crackdown lands at a moment when Russia’s own forecasts show a weaker outlook for growth under sanctions pressure. This month the Economy Ministry cut its 2026 growth projection to 0.4 percent from 1.3 percent and reduced the estimate for 2027 from 2.8 percent to 1.4 percent, an admission that extended war spending and trade limits weigh on expansion.

Crypto is replacing bank links for Russia

Western authorities and crypto analytics firms have flagged crypto as a key tool in Russia’s effort to replace severed bank links. Research into related platforms such as A7A5 and exchanges that serve Russian users has traced billions of dollars in stablecoin and token flows that bypass traditional banking checks, much of it through venues in Central Asia and the Caucasus.

Cooper framed the new sanctions as part of a broader drive to hit the financial lifelines of Moscow’s war machine and close off safe havens for enablers of the invasion. She said the UK would keep working with allies to expose, disrupt and dismantle the structures that move money and goods for Russian forces.

Since the start of the full-scale invasion in 2022, Britain has sanctioned more than 3,300 individuals, companies and vessels linked to the Kremlin, from banks and energy giants to defense suppliers.

The government estimates that international sanctions have stripped more than 450 billion dollars from Russia’s economy, a loss equal to an estimated two years of funding for its war against Ukraine.

Tyler Durden Thu, 05/28/2026 - 07:45

Drone Stocks Erupt After Report Of Pentagon Funding Deals

President Trump's war economy is accelerating, with a new report indicating that the Department of War is set to unleash funding deals across a handful of drone companies. The effort comes as the DoW's procurement program now favors startups, and there has been an emphasis within the department on ramping up America's drone manufacturing base, as hyper-innovation from the war in Ukraine has brought forward 2030s-era war technology.

The Wall Street Journal reports that the DoW has been in talks with a group of drone startups and suppliers, including Performance Drone Works, Unusual Machines, and Neros Technologies, about potential funding packages that could include debt, conditional loans, and possible equity stakes.

The financing would not be used to purchase batches of suicide drones directly. Instead, the plan is to expand domestic manufacturing capacity, lower unit costs, and help these war-unicorn startups ramp up production ahead of a major stockpiling effort by the DoW.

The DoW's $1.1 billion Drone Dominance initiative aims to stockpile 300,000 low-cost attack drones by the end of 2027 at a unit price of less than $5,000.

The WSJ's report sent drone-related firms soaring in premarket trading, with Unusual Machines soaring 33%, Red Cat up 13%, AeroVironment up 8%, Kratos Defense & Security Solutions up 8.4%, and Airo Group up 2.9%.

None of this should be surprising to readers, as we've detailed the Trump team's playbook with the DoW to reset procurement programs, funneling funding into defense startups while building out production lines for low-cost war machines, such as drones and robots.

We identified Axon, which plans to import Ukrainian war tech into the US to build up US stockpiles faster.

Meanwhile, Ukraine is becoming a drone manufacturing hub for allied forces that stretch across Eurasia.

Let's remind readers of our forward-looking theme published in January. 31: 

• "Explosion In AI Data Center Buildouts Will Demand Next-Gen Counter-Drone Security"

Then, after a couple of data centers in the Gulf area were hit by Iranian attack drones, we note:

• "Micro AI Sentry Guns May Be Next Layer Of Defense For Data Centers Against Kamikaze Drones"

Beyond one-way attack drones and interceptor drones, we suspect counter-drone threat systems, such as passive acoustic detection, will become popular in the US because there is a missing layer of air defense around critical infrastructure, from power grids to data centers.

Tyler Durden Thu, 05/28/2026 - 07:20

Home Refi Activity Plummets As Mortgage Rates Hit 9-Month Highs

Refinancing activity in the U.S. housing market plummeted last week as mortgage rates hit their highest level in nine months, new industry data released on May 27 show.

Refinancing decreased by 18 percent for the week ending May 22 and is up by 19 percent from the same time a year ago, according to the Mortgage Bankers Association.

“Many borrowers understandably backed away from refinancing last week,” Joel Kan, the firm’s vice president and deputy chief economist, said in a statement.

The decline was largely driven by the 30-year fixed-rate mortgage rising by 30 basis points over the past five weeks to 6.65 percent - the highest level since August 2025.

As Andrew Moran reports for The Epoch Times, activity to refinance home loans was spread across the board. Conventional refinance applications fell by 14 percent, Federal Housing Agency applications dropped 18 percent, and Veterans’ Affairs applications tumbled 34 percent.

Overall, refinance loans accounted for 38 percent of all mortgage applications, the smallest share in nearly a year.

But purchase applications also slipped from the previous week, sliding by almost 9 percent.

“Purchase applications were slightly lower across all loan types but still ran at a stronger pace than last year’s pace,” Kan said.

“The average loan size for a purchase application reached another survey high at $473,600, as borrowers with smaller loan sizes were less active given the higher rate environment and its negative impact on their purchasing power.”

Meanwhile, the Federal Housing Finance Agency reported on May 26 that single-family home prices backed by Fannie Mae and Freddie Mac rose by 0.1 percent in March, up from a downwardly revised 0.1 percent drop in February.

‘Sensitive to Headlines’

Mortgage rates, which generally track long-dated U.S. Treasury yields, have accelerated since the war in Iran began in late February, driven by renewed war-driven inflation risks.

The main benchmark 10-year yield reached a one-year high of 4.66 percent last week. The 30-year climbed to 5.18 percent, its highest level since the global financial crisis.

Modest relief could be on the way amid increasing optimism that the United States and Iran are inching closer to establishing a peace deal.

Yields have eased by approximately 20 basis points over the past week, translating into lower rates for homeowners and prospective homebuyers.

As of May 27, the 30-year fixed-rate mortgage dipped to 6.61 percent, but the gap between current rates and the effective (aggregate) rates that Americans are currently carrying on their homes remains vast...

How long this trend lasts depends on what happens between Washington and Tehran, says Jeff DerGurahian, head economist at loanDepot.

“But with geopolitical tensions still front and center and inflation expectations starting to pick back up, the outlook remains uncertain,” DerGurahian said in a note emailed to The Epoch Times.

“Until there’s more clarity, rates are likely to stay sensitive to headlines, with the direction from here tied closely to how events unfold overseas.”

Inflation data could also play a role in both the broader financial markets and monetary policy.

A de-escalation in the three-month-old Middle East conflict could help mitigate medium- and long-term inflation pressures. But the length of persistent inflation could hang over the Federal Reserve.

Federal Reserve Chairman Kevin Warsh at the White House in Washington on May 22, 2026. Madalina Kilroy/The Epoch Times

Traders have recently made an interest rate hike over the next year their base case scenario.

The 2-year yield, which follows expectations for Fed policy, remains above 4 percent. Futures market data suggest a quarter-point increase in March.

Market watchers, however, say the criteria for following through on a rate hike are high.

“From a policy standpoint, the expectation is that the Fed will likely stay on hold for a while,” DerGurahian said.

“The bigger question is how inflation plays out over the next few months, especially if higher energy prices start to show up more broadly across the economy.”

May’s annual consumer inflation rate is expected to reach 4.2 percent, according to the Cleveland Fed Nowcasting Model. If accurate, it would be the highest level of inflation since May 2023.

Ignoring Interest Rates

Despite President Donald Trump’s calls for lower interest rates to support his economic agenda, the data suggest the economy has been indifferent to elevated rates.

Recent growth has been fueled by consumer spending and business investment, mainly artificial intelligence-driven capital expenditures.

Even with markets pricing in higher rates, capex spending plans continue to be adjusted higher.

“It doesn’t matter what the Fed does. There is FOMO [fear of missing out] among hyperscalers, and AI spending is not sensitive to higher interest rates,” Torsten Slok, chief economist at Apollo Global Management, said in an emailed note to The Epoch Times.

“In fact, despite the move higher in rates in recent months, the consensus forecast for capex in 2027 continues to rise.”

If Fed officials tighten policy, it might combat inflation but do little to harm the growth prospects.

Tyler Durden Thu, 05/28/2026 - 06:55

The Fragile Balance Between Compassion And Civilization

Authored by Armstrong Williams via The Epoch Times,

What is unfolding across parts of Europe, particularly in the UK under Prime Minister Keir Starmer, should serve as a warning to every Western democracy wrestling with questions of immigration, national identity, social cohesion, and the limits of political tolerance.

A nation can be compassionate without becoming careless. It can welcome newcomers while still expecting assimilation, civic responsibility, and respect for the laws and traditions that hold a society together. But when governments become so consumed with appearing morally virtuous that they neglect order, border enforcement, public safety, and cultural confidence, the social fabric eventually begins to fray.

Across Europe, many citizens increasingly feel that they are watching this happen in real time.

Businesses struggle under layers of regulation and insecurity. Historic neighborhoods in cities such as London, Paris, Brussels, and parts of Germany face growing tensions between communities living side by side but not necessarily living together. In too many places, political leaders have become hesitant to speak honestly about integration failures for fear of being labeled intolerant or divisive. Yet avoiding difficult conversations does not eliminate problems; it merely delays them until frustration hardens into anger.

This is why political movements once considered fringe are now gaining traction throughout Europe. Voters are not simply reacting to economics. They are reacting to a deeper fear that their nations are losing coherence, confidence, and cultural continuity. People want safe streets. They want functioning schools. They want borders that mean something. They want governments willing to defend the rule of law consistently and unapologetically.

And Americans should understand clearly why this debate resonates so strongly at home.

Many believe that the United States would have headed down a similar path had Vice President Kamala Harris been elected president and continued the policies of the previous administration. Whether one agrees with that assessment or not, the concern itself reflects a growing anxiety felt across the Western world: that governments have become more focused on symbolic compassion than sustainable governance.

But this conversation must be approached with moral clarity and balance.

Immigration itself is not the enemy. In fact, immigration has been one of the great strengths of both America and many European nations for centuries. The United States remains history’s greatest example of people from vastly different backgrounds building a common national identity rooted in shared civic values rather than bloodlines or ethnicity.

However, the key word is assimilation.

Successful societies require more than diversity. They require unity of purpose. They require a shared language of civic responsibility, mutual respect, constitutional order, and national loyalty. People can absolutely preserve the beauty of their cultural traditions, religious practices, cuisine, music, and family customs while still embracing the values and identity of the country they are joining.

America succeeded for generations because millions of immigrants came not merely seeking economic opportunity but seeking to become Americans.

That distinction matters enormously.

Previous generations of immigrants often viewed assimilation as a source of pride rather than oppression. Italian, Irish, Jewish, Korean, Indian, Vietnamese, Nigerian, Cuban, and countless other communities maintained elements of their heritage while simultaneously embracing the broader American civic culture. Their children attended U.S. schools, learned English, served in the military, opened businesses, participated in civic life, and gradually became woven into the national fabric.

And importantly, this process continues to endure successfully in many places today.

One can look across countless immigrant communities throughout the United States where assimilation and cultural pride coexist beautifully. Indian American families dominating medicine, engineering, and entrepreneurship while maintaining strong family traditions. Nigerian immigrants excelling academically and professionally while contributing deeply to churches, local businesses, and civic institutions. Hispanic immigrants serving in law enforcement, the armed forces, and small-business ownership while maintaining rich linguistic and cultural traditions. Asian American communities revitalizing neighborhoods, building thriving schools, and producing some of the highest educational outcomes in the country.

These examples remind us that assimilation does not require cultural erasure. It requires civic alignment.

The problem emerges when political leaders encourage fragmentation over integration when multiculturalism evolves into parallel societies separated by language, values, expectations, and allegiance. A nation cannot endure indefinitely if large groups increasingly identify more with grievance, tribalism, or foreign conflicts than with the country they now call home.

Europe is confronting this tension directly.

In parts of the UK, France, Belgium, and Sweden, leaders are now facing difficult questions about whether integration policies failed to create a strong enough shared national identity. Rising crime, anti-Semitism, extremist ideologies, gang violence, and social unrest have intensified concerns among ordinary citizens who feel dismissed whenever they raise legitimate worries about assimilation, public safety, or cultural cohesion.

Yet this issue must never become an excuse for hatred or blanket condemnation of immigrants themselves. That would betray the very values Western civilization claims to defend. The overwhelming majority of immigrants come seeking peace, opportunity, safety, and dignity for their families. Most are hardworking, law-abiding, and deeply patriotic toward the nations that welcomed them.

But nations also have the right—indeed, the obligation—to expect those entering legally to respect the law, contribute productively, learn the culture, and embrace the civic values of their adopted homeland.

Without that expectation, societies eventually lose the trust and shared identity necessary for democracy itself to function.

History repeatedly teaches the same lesson. Civilizations rarely collapse overnight from external invasion alone. More often, they weaken gradually from within through cultural uncertainty, institutional decay, leadership paralysis, declining civic confidence, and an unwillingness to defend the principles that created stability in the first place.

The challenge facing the West today is not whether immigration should exist. Immigration will always exist. The real question is whether leaders still possess the wisdom and courage to preserve social cohesion while remaining humane, lawful, and fair.

Because compassion without order eventually produces chaos.

And order without compassion eventually produces cruelty.

Great nations require the discipline and maturity to uphold both simultaneously.

Tyler Durden Thu, 05/28/2026 - 06:30

Solar Stocks Flash Major Technical Breakout As Tariff Talk Escalates

Solar stocks are showing a clear technical shift, breaking above a well-defined downtrend after more than five years of sustained pressure.

UBS analyst Catherine Gordon is attributing the surge in solar stocks to falling yields and renewed policy momentum. A potential Section 232 tariff announcement in mid-to-late June is adding fuel to the rally, with First Solar leading the charge.

The UBS Solar basket (UBXXSOL) is now up 40% year-to-date.

Gordon provided more context on what's powering UBXXSOL higher:

Clean tech names are outperforming again on Tuesday, with solar leading higher alongside more speculative growth baskets as yields move lower. The backdrop has been broadly supportive, with the UBS Solar basket (UBXXSOL) now up 33% MTD.

First Solar is the standout mover, with the stock trading around $268 and continuing to rally in anticipation of a potential Section 232 tariff announcement in the near term. Earlier today, Windham hosted Toyo Solar on a call, where the company indicated that mid‑ to late‑June could be the timing for Section 232, with measures potentially including a minimum import price alongside tariffs. There is also scope for domestic manufacturing investments to be used as an offset to tariff liability.

The prevailing dynamic has been "buy the rumor and buy the news," with momentum building into the expected policy update. Beyond S232, the next key catalyst for First Solar (FSLR) is likely to be order commentary on 2Q earnings calls.

Elsewhere, sentiment remains constructive across parts of the solar complex, with Nextracker (NXT) still viewed as a core holding. On the residential side, there have been questions around the sharp moves in SolarEdge (SEDG) and Enphase Energy (ENPH). Enphase's recent announcement around a solid‑state transformer appears to have driven a short squeeze. However, this is not viewed as a differentiated development, with multiple electrical equipment players — including Schneider Electric and ABB — already pursuing similar technologies. Against that backdrop, the residential rally looks vulnerable to fading.

Last month, Goldman analyst Brian Lee told clients that "Utility-scale demand remains resilient amid pricing volatility, while residential stays challenged but with cleaner channel conditions." Professional subscribers can read the full GS note here at our new Marketdesk.ai portal.

Tyler Durden Thu, 05/28/2026 - 05:45

NATO 3.0: Report Details 'Fundamental Restructuring' Of US Commitments

Via The Cradle

The US is moving forward with a "fundamental restructuring" of its commitments to European security, transitioning from the traditional "burden sharing" strategy to that of "burden shifting," according to a Der Spiegel report published on May 26.

Under the new vision dubbed "NATO 3.0," Washington expects European allies to assume responsibility for the continent’s entire conventional defense.

Source: Dunya

In this new framework, the US will primarily provide a nuclear deterrent rather than the broad military support it has historically guaranteed.

This transition, which the report notes has blindsided European officials, involves drastic reductions in US military assets previously committed to the "NATO Force Model."

Alexander Velez-Green, an envoy to US Secretary of Defense Pete Hegseth, recently informed allies that Washington intends to cut its contribution of fighter jets by one-third and significantly reduce the number of strategic bombers, navy destroyers, and aerial refueling aircraft. 

The report notes that the US plans to stop providing submarines to the NATO pool entirely and expects Europeans to supply their own reconnaissance and armed drones.

The primary driver for this withdrawal is the US military’s pivot toward the Asia-Pacific, though officials also cited the need for flexibility to commit assets to military campaigns in West Asia and the Western Hemisphere. 

Washington reportedly seeks to prepare for a potential "two-front conflict," noting that US intelligence identifies 2027 as the "key date" when China may be capable of launching an offensive against Taiwan.

Given the possibility, the US no longer wishes to have its key assets “tied up” by fixed NATO commitments.

The report highlights an intensely fast-paced transition, with the US demanding that European allies present specific offers to fill these newly created military gaps by early June, aiming to formalize the new model at the July summit in Ankara.

While NATO leadership officially portrays the move as a way to reduce “over-dependence” on the US, European diplomats find the requirements far more severe than anticipated, with European leaders reportedly stunned by the scale and speed of the requirements. In secret meetings, some representatives even interpreted the US insistence on rapid compliance as an "indirect threat" toward those who fail to act quickly.

In line with the new “burden shifting,” US President Donald Trump announced on May 22 that he would send an additional 5,000 troops to Poland – a move reportedly driven by his personal relationship with and endorsement of Polish President Karol Nawrocki. 

❗️Reuters reports NATO is forming 3 divisions with 60,000 troops and strengthening rapid deployment systems on its eastern flank. The plan focuses on reinforcing the Baltic region, including Estonia and Latvia, while raising readiness for rapid response to potential threats from…

— NOELREPORTS 🇪🇺 🇺🇦 (@NOELreports) May 26, 2026

This decision has "stirred confusion" within the Pentagon, as it contradicts earlier orders to reduce the US military presence in Europe, such as the planned withdrawal of over 5,000 soldiers from Germany.

While Polish leadership welcomed the surge, US defense officials and diplomats have criticized the shift as impulsive, noting that it creates a sense of strategic inconsistency just as the US prepares to brief NATO allies on its future military footprint. 

Tyler Durden Thu, 05/28/2026 - 05:00

The Gen Z Workforce In The UK Is Demanding Less Alcohol At Company Socials

For years, workplace culture has revolved around one thing: drinks after work. But Gen Z in the UK is starting to push back — and companies are beginning to notice, according to a new study from Diamond Interiors.

The study says that a growing number of younger employees say they would rather skip alcohol-focused work socials altogether. In a recent survey of Gen Z office workers, half said they preferred social events that don’t centre around drinking. It’s a small detail on the surface, but it reflects a much wider shift in how the next generation views work and workplace culture.

Don't tell the banking industry in London, that's for sure...

For previous generations, bonding with colleagues often meant pub trips, networking over cocktails, or team nights out that stretched late into the evening. Gen Z workers, however, are drinking less overall and are more likely to prioritise wellness, mental health, fitness, and financial stability. For many, alcohol simply isn’t as central to social life as it once was.

There’s also a stronger focus on inclusivity. Younger workers are more aware that not everyone wants — or can afford — to participate in drinking culture. A work social built around alcohol can feel limiting rather than welcoming.

That doesn’t mean Gen Z is rejecting workplace friendships. In fact, many still value strong team relationships. They just prefer different environments: coffee catchups, team lunches, fitness classes, volunteering events, or activities that don’t come with pressure to drink.

The change fits into a broader pattern across the workforce. Gen Z employees are questioning long-standing workplace norms, from strict office hours to rigid management styles. Many are less interested in “office culture” for the sake of appearances and more focused on balance, comfort, and genuine connection.

For employers, the message is clear. The old model of workplace bonding won’t disappear overnight, but it no longer works for everyone. Companies that rethink social culture — and offer more flexible, inclusive ways for employees to connect — may find it easier to attract and keep younger talent.

In other words, Gen Z isn’t ending workplace socializing in the UK. They’re just redefining what it looks like.

Tyler Durden Thu, 05/28/2026 - 04:15

EU Emissions Trading Expansion And The Pressure On German Aviation Industry

Submitted by Thomas Kolbe

Germany’s leading airline Lufthansa is closing its regional subsidiary CityLine, while low-cost carrier Ryanair is scaling back its Germany operations. Airport locations are under increasing pressure, with tens of thousands of jobs at stake. And how does politics respond to this veritable crisis? Naturally, with further levies.

In this case, it was the EU Commission that came forward with the proposal to extend the EU Emissions Trading System (ETS) to international flights departing from Europe. Another new charge, wonderful. And this in the midst of the most severe recession since the post-war period.

The regulation could take effect from 1 January 2027, should the relevant institutions and national legislators adopt it. The motivation to push this process forward efficiently and with minimal bureaucracy is clearly present, as at least €11 billion, and possibly up to €13 billion, in tax revenue is at stake. What is rarely discussed: a small portion of this additional revenue is expected to remain in Brussels – another covert step by the EU Commission under Ursula von der Leyen toward fiscal autonomy.

From the perspective of Brussels and Berlin policymakers, there is a positive side effect: alongside the fiscal dimension, they would also move closer to their ideological goal of gradually immobilising European citizens – a key component of the economic “death agenda” of the Green Deal.

As a European taxpayer, one has become accustomed to absorbing such measures. Few now expect anything other than new taxes and increasingly granular regulation from the labyrinthine EU apparatus. Brussels no longer makes any secret of its shift toward implementing degrowth ideology through an unprecedented tax drive. This occurs at a time when hundreds of thousands in Germany alone lose their jobs every year – while politicians beyond the so-called firewall are thriving on taxation policy.

So far, media camouflage has worked: politics floods the public sphere with a pseudo-debate about relief for citizens, only to simultaneously increase the tax burden elsewhere. The best example is the so-called fuel discount – a temporary reduction of a levy financed by permanent increases elsewhere, as it is often phrased. It is perverse: politics now treats taxpayers’ money as self-evident, as mere disposable mass for the political class. This smells of feudalism and has little to do with the idea of the sovereign citizen.

Consequently, travel itself is increasingly seen in these circles as objectionable, as an act of presumptuous freedom. The citizen’s scope for action must be restricted, their existence in an eco-dystopia effectively managed. It is therefore logical that travel is to become significantly more expensive. An extension of the CO₂ regime to international flight tickets would increase prices by up to 15 percent in the first year. Combined with annual price increases due to the shrinking supply of CO₂ certificates, foreign travel would soon become a luxury.

Ryanair CEO Michael O’Leary is one of the few well-known executives openly resisting European degrowth policy. His company has reduced its presence in Germany by around 40–50 percent in recent years and cut numerous routes – affecting airports such as Frankfurt-Hahn, Weeze, Berlin, and Hamburg. Too expensive, too heavily regulated, and increasingly hostile to business – O’Leary is saying what virtually every company leader, CEO, and SME operator not dependent on green subsidies would say daily.

German policy in particular extracts a significant share of domestic air travel costs, up to around 60 percent of ticket prices. Whether VAT, CO₂ charges, or airport fees – operations are becoming increasingly unprofitable, and passengers are being pushed toward rail as an alternative. This policy has consequences: since the lockdown shock six years ago, domestic air traffic has not recovered and remains about 50 percent below 2019 levels. Numerous airport locations have come under pressure and thousands of jobs have been cut.

It is difficult to estimate precisely, but direct and indirect job losses in Germany’s aviation sector since 2019 likely amount to up to 50,000 positions. Lufthansa alone has cut more than 10,000, Airbus over 5,000 jobs in Germany.

The campaign by German policymakers against successful airlines like Ryanair, which are being systematically pushed abroad, fits into the broader pattern of the current governing coalition. A hostile, ideologically charged regulatory and tax policy is a continuation of the strategy of the “traffic light” coalition, intensified by the economic hammer of CO₂ taxation, increasingly used to eliminate undesirable industrial sectors.

We should not fool ourselves: the relentless struggle of eco-socialists against the free economy – and thus above all against industry, which must be understood as the indispensable productive foundation of our society – is now becoming visible, as EU climate policy becomes increasingly isolated globally.

Ironically, the Intergovernmental Panel on Climate Change (IPCC) itself has dismantled the apocalyptic narrative of a burning planet that was persistently constructed over decades. This renders Brussels’ and Berlin’s nihilistic climate policy absurd – a fact largely drowned out in the overheated media noise. In the “Gaulish village” of German world-savers, an intellectual and ideological ice age still prevails.

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About the author:  Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Thu, 05/28/2026 - 03:30