Kevin Warsh, who is expected to be confirmed by the Senate later this month as the next Federal Reserve chair, will inherit a central bank that appears to be stuck in policy limbo due to concerns about escalating inflation. But Warsh may have more options than investors think.
Bond traders no longer expect the Fed to cut interest rates this year. Three of the Fed's regional bank presidents broke ranks at the April 28-29 policy meeting to vote against language that suggested the next rate move would be a cut. And a May inflation report, due early next week, is widely expected to show prices rising at an annual pace near 4%, almost double the Fed's 2% target.
Gulf States Fear an Emboldened Iran Is Taking Advantage of a Hesitant U.S.
DUBAI-President Trump chose to look the other way after Iran launched three salvos of missiles and drones into the United Arab Emirates, one of America's main Middle Eastern partners, despite a cease-fire he negotiated nearly a month ago.
The likely conclusion in Tehran, Gulf governments fear, is that further escalation pays off because Trump is so intent on extricating himself from the war that he will ignore renewed Iranian attacks on America's regional allies.
China Is Still Supplying Drone Factories in Iran, Russia Despite U.S. Sanctions
On March 5, as the U.S. and Israeli militaries hammered Iranian targets and Tehran launched attacks at Tel Aviv and Gulf countries that host American bases, an email blast emanated from a server located in China.
"We are deeply shocked and outraged by the aggression against Iran, and our hearts are with you," read the message from Xiamen Victory Technology. The company offered to sell German-designed engines used to power one-way attack drones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
05-06-26 0513ET
