Bonds & Stocks
Wall Street traders drove stocks higher while bond yields fell as signs of tame inflation reinforced the case for Federal Reserve rate cuts this year. The consumer price index, excluding food and energy categories, increased 0.2% from May and advanced 2.9% on an annual basis, marking the fifth straight month of below-forecast inflation readings.
Economy
Kevin Warsh, a contender to replace Jerome Powell as chair of the Federal Reserve, is now ready to cut interest rates. As a governor at the US central bank from 2006 to 2011, Warsh called for higher rates even in the depths of the financial crisis, warning often of impending inflation. That’s a concern he’s reiterated as recently as last year. But this year, Warsh has become an enthusiastic supporter of lower borrowing costs.
World
US President Donald Trump threatened to impose stiff economic penalties on Russia if it doesn’t end hostilities with Ukraine within 50 days. Trump said the levies would come in the form of “secondary tariffs". According to Matt Whitaker, the US ambassador to NATO, the planned action effectively represents secondary sanctions on countries buying oil from Russia, which he said would “dramatically impact the Russian economy”.