Stablecoins and mission creep
Plus: what’s ahead this week, US consumer sentiment, Singapore and more
“Communications tools don’t get socially interesting until they get technologically boring.” – Clay Shirky ||
Hello everyone! Those of you who enjoyed a long weekend for the memorial day holiday, I hope it was a great one, whatever the weather. I took advantage of the break to put away the winter clothes and pull out the t-shirts, and I am now so ready for summer. Got the mint water chilling in the fridge, watermelon on the countertop, and a new mug for my iced coffee. Bring it on. 🌞
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IN THIS NEWSLETTER
Coming up this week: PCE, defence
Stablecoins and mission creep
Macro: US consumer sentiment
Term of the day: Shangri-La Dialogue
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WHAT I’M WATCHING:
Coming up this week: PCE, defence
The big deal this week is the April Personal Consumption Expenditure (PCE) data, which should confirm the uptick in US inflation. We also get a ton of speeches from Fed officials, not that interesting really since we know what they’ll be saying. There could be some diplomatic sparks over the weekend in Singapore.
Today (Tuesday), the US Conference Board releases its consumer confidence report for May.
On Thursday, we get the April read of the US Personal Consumption Expenditure (PCE) index. The core index, ex-energy and food, was former Fed Chair Jerome Powell’s preferred inflation gauge. Current Chair Kevin Warsh seems to favour the trimmed mean, but he will struggle to get us all to divert our attention from the PCE – muscle memory is strong.
Anyway, the consensus forecast for the headline PCE year-on-year growth in April is for 3.8%, an acceleration from March’s 3.5% and a full percentage point higher than just two months ago – this would mark the steepest two-month acceleration since late 2021. As with the CPI, much of that is due to higher food and energy costs – strip those out, and the core index is forecast to have increased by 3.3%, the highest since November 2023.
(chart via Bloomberg)
We also get data on US personal spending and income, which should give a hint as to whether the decline in consumer sentiment (see below) is seeping through to economic activity.
And we get the second estimate of US GDP for Q1 – the first estimate, released almost a month ago, showed growth accelerating to 2.0%, from 0.5% annualized in Q4. We’ll also get the revised quarterly core PCE growth for Q1, which covers only one month of the Iran conflict – the first estimate showed an acceleration to 4.3% from 2.7%.
Friday sees the kickoff of this year’s Shangri-La Dialogue, Asia’s most significant defence and security conference – see below for more detail.
Stablecoins and mission creep
They’re not even pretending anymore: the European Central Bank (ECB) doesn’t like the idea of stablecoins.
