U.S.-Iran Standoff Continues to Escalate, Further Intensifying U.S. Inflationary Pressures

Daily News

Summary:

The U.S.-Iran confrontation continues, with Trump saying there is “no rush”; U.S. CPI annual growth hits the highest level in three years...

Key Headlines

1. Iran’s foreign minister says regulatory rules for the Strait of Hormuz are being drafted; accuses the U.S. of lacking sincerity and obstructing a ceasefire

2. U.S.-Iran tensions persist, Trump says there is “no rush,” while Iran sets conditions for negotiations

3. U.S. appeals court temporarily blocks ruling that declared Trump’s 10% tariffs unlawful

4. U.S. Senate votes to approve Kevin Warsh as Federal Reserve Chair

5. Starmer faces growing resignation pressure as divisions deepen within the Labour Party

6. U.S. consumer inflation accelerates in April, with CPI posting the largest annual increase in three years

7. Goolsbee says inflation trend is disappointing, with focus shifting to service-sector pressures

8. Nagel says the likelihood of further ECB rate hikes is increasing

9. Warsh confirmed as Fed governor; Senate vote on his Fed chairmanship expected Wednesday

Details

Iran’s Foreign Minister: Regulatory Rules for the Strait of Hormuz Are Being Drafted; U.S. Lack of Sincerity Obstructs Ceasefire

Iranian Foreign Minister Abbas Araghchi stated that, as a coastal nation along the Strait of Hormuz, Iran is conducting consultations under international law regarding arrangements related to the strait and is drafting corresponding regulatory rules. Araghchi also said that the United States’ arrogant approach, threatening and provocative rhetoric, and lack of sincerity and credibility in both words and actions are the biggest obstacles to fully ending the conflict and reaching a potential agreement.

U.S.-Iran Tensions Continue; Trump Says There Is “No Rush,” While Iran Sets Conditions for Talks

On the 12th local time, U.S. President Donald Trump said there was no need to rush to resolve the conflict with Iran and expressed confidence that he could prevent Iran from developing nuclear weapons. The U.S. defense secretary stated that despite recent tensions and exchanges of fire, the ceasefire agreement with Iran remains in effect.

Iran, meanwhile, stated that ending hostilities and lifting the blockade of the Strait of Hormuz are prerequisites for any negotiations with the United States. Iranian officials also warned that if Iran comes under attack again, it may raise uranium enrichment levels to 90%.

U.S. Appeals Court Temporarily Halts Ruling Against Trump’s 10% Tariffs

A U.S. federal appeals court has temporarily suspended a ruling that declared Trump’s global tariffs unlawful. The Trump administration requested permission for relevant agencies to continue collecting tariffs during the legal dispute, and judges are currently weighing the request.

On Tuesday, the Federal Circuit Court of Appeals issued a brief order known as an “administrative stay” and set an expedited schedule requiring both sides to submit written arguments regarding the government’s request to maintain the tariffs during the appeal process. Small businesses and Democratic state officials who filed the lawsuit must respond within one week.

The administrative stay means importers must continue paying the 10% tariffs imposed by Trump under Section 122 of the Trade Act of 1974.

U.S. Senate Approves Kevin Warsh as Federal Reserve Chair

On May 12 local time, the U.S. Senate voted to approve Kevin Warsh as Chair of the Federal Reserve, with related voting procedures still ongoing. On January 30, Trump nominated former Fed Governor Kevin Warsh to succeed current Chair Jerome Powell.

Starmer Faces Leadership Crisis as Labour Party Splits Deepen

Following the Labour Party’s heavy defeat in local elections, UK Prime Minister and Labour leader Keir Starmer has faced mounting calls to step down. On the 12th, several junior government ministers reportedly threatened resignation in an attempt to pressure him, while multiple cabinet ministers voiced support for his leadership.

According to British media reports, more than 80 Labour MPs in the House of Commons have called for Starmer’s resignation. At the same time, over 100 Labour MPs signed a statement opposing a leadership change at this stage.

The statement argued that Labour’s poor local election performance highlighted the urgent need to regain voter trust and that the party should unite rather than hold a leadership contest now.

U.S. Consumer Inflation Accelerates in April, CPI Annual Growth Hits Three-Year High

U.S. CPI rose 3.8% year-on-year in April, the highest reading since May 2023. The data heightens political risks for Trump and Republicans ahead of the November midterm elections.

The figures suggest that surging energy costs are increasingly affecting the U.S. economy as the impact of war intensifies. If oil prices continue rising, consumers may reduce spending.

Goolsbee: Inflation Trend Is Disappointing, Service-Sector Pressures in Focus

Chicago Fed President Austan Goolsbee said government data showed consumer inflation accelerated unexpectedly last month, calling the result both surprising and disappointing.

Goolsbee noted that inflation is moving in the wrong direction and is not solely driven by oil prices or tariff-related factors.

Nagel: Chances of ECB Rate Hikes Are Increasing

Bundesbank President Joachim Nagel said in an interview with Germany’s Handelsblatt that, unless the inflation outlook changes fundamentally, the likelihood of further European Central Bank rate hikes is increasing.

“We cannot ignore persistently high energy prices,” Nagel said. “If the inflation situation does not fundamentally improve, the probability of additional rate hikes will continue to rise.”

Warsh Confirmed as Fed Governor; Vote on Fed Chairmanship Expected Wednesday

On the 12th, the U.S. Senate voted 51-45 to officially confirm Kevin Warsh as a member of the Federal Reserve Board of Governors for a 14-year term.

Warsh replaces Stephen Miran, whose term had already expired. His term as governor is calculated from February 1 of this year.

The Senate has also initiated the confirmation process for Warsh to simultaneously serve a four-year term as Fed Chair and has held a so-called “cloture vote,” starting the countdown toward final confirmation. He could be approved for the leadership role as early as Wednesday local time.

Current Fed Chair Jerome Powell’s term is set to expire on Friday.

Today’s Key Events to Watch

16:00 — IEA Monthly Oil Market Report

20:30 — U.S. April PPI

23:30 — Speech by Boston Fed President Susan Collins

01:15 — Speech by Minneapolis Fed President Neel Kashkari

01:30 — Bank of Canada releases monetary policy meeting minutes

03:00 — Speech by ECB Chief Economist Philip Lane

Time TBD — OPEC Monthly Oil Market Report

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