James Brodie
Head of Learning & Development, Flux
Markets Up As Trump Arrives in China, Hawkish FedSpeak, US Consumer Pain
Yields, stocks and metals rise as US inflation surges; Fed stays hawkish while consumer stress and delinquencies worsen
Yields, equities, precious metals all rise as Trump arrives in China.
The U.S. Treasury issued 30-year bonds at 5.045%, above 5% for the first time since August 2007. While the Nasdaq and S&P made new all-time highs as gold and silver also continued their uptrends.
Huge PPI numbers in U.S. with a 1.4% rise in April, nearly triple the 0.5% consensus, the annual rate has hit 6% (crushing the 4.8% consensus forecast). PPI leads CPI by about 2 months CPI already printed the highest level in 3 years, and it looks like it's only going to get much worse. (Chart 1, @infraa_). With refined energy products continuing to make new highs this looks set to get significantly worse.
Singapore 92 gasoline continues to march higher (Sing Mogas 92 June 2026, Flux)
FedSpeak was hawkish. Collins said policy likely needs to stay “slightly restrictive” for some time, while Kashkari warned that the inflation path depends heavily on how long the Strait of Hormuz remains disrupted. Reuters separately reported Kashkari saying the Fed is “dead serious” about getting inflation down, and that he remains open to tighter policy if needed.
A look at US consumer and business confidence together. Has been a remarkable divergence, but business confidence has started to move towards consumer's malaise. (Chart, @JohnKicklighter)
U.S. consumer pain intensifies. 13.1% of credit card balances in the US are now 90+ days delinquent, the highest since 2011. 10.3% of student loan balances are now 90+ days delinquent, the highest since 2020. 5.6% of auto loan balances are now 90+ days delinquent, the highest level on record.
Data today - US retail sales & jobless claims
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