Bloomberg — 2026-05-12#

Lead Story#

The global economy is absorbing a dual shock this morning: US consumer prices accelerated to 3.8% in April—the fastest pace since 2023—driven aggressively higher by soaring gasoline and grocery costs. This inflationary resurgence coincides with a rapidly deteriorating geopolitical landscape, as President Donald Trump declared the US-Iran ceasefire to be on “massive life support” just hours before his high-stakes departure for a summit with Chinese President Xi Jinping in Beijing.

Markets & Economics#

• Bond Market Ditches Warsh Trade as Oil Surges: Treasury traders are rapidly unwinding bets on steep interest rate cuts, abandoning the “Kevin Warsh trade” as the oil shock fundamentally alters the macroeconomic outlook. The hawkish market repricing comes just as Warsh clears his first Senate confirmation vote for the Federal Reserve Board.
• Copper Rallies Above $14,000 a Ton, Nearing Fresh All-Time High: Base metals are surging despite broader market headwinds, with copper eclipsing $14,000 a ton on a rebound in Chinese demand and acute supply risks.
• ECB Must Act If Iran War Threatens Price Stability, Nagel Says: European Central Bank policymakers are striking a hawkish tone, with Bundesbank President Joachim Nagel warning that the probability of a rate hike is rising to defend against price instability triggered by Middle East disruptions.
• Japan’s Reserves Tally Likely Too Early to Reflect Intervention: April’s foreign currency reserves data showed little change month-over-month, suggesting that suspected late-month intervention by the Ministry of Finance has not yet materialized in official tallies.

Business & Industries#

• Boeing Bets Comeback on Trump, China and an Elusive New Plane: CEO Kelly Ortberg has joined the US delegation to Beijing, seeking a massive trade win by floating a potential 500-jet order for the 737 Max from Chinese airlines.
• Geothermal Energy Developer Fervo Raises $1.89 Billion in US IPO: Fervo Energy upsized its initial public offering to raise nearly $1.9 billion, pricing above its marketed range as investors scramble for renewable solutions to surging power demand.
• American Electric Power Utility Offers $2.6 Billion in Stock: One of the largest US utilities is tapping equity markets to fund a $2.6 billion expansion, directly citing the booming electricity demand from artificial intelligence data centers.
• Anthropic in Talks to Raise $30 Billion in New Funding: The AI developer is in early discussions with investors for an unprecedented financing round that could hit $30 billion, aiming to fund massive data and compute requirements.

Policy & World#

• UK’s Starmer Clings On as Rivals Try to Build Momentum for Coup: Prime Minister Keir Starmer told a defiant Cabinet that he will not resign without a leadership fight, even as a massive Labour Party rebellion and poor local election results sent 30-year Gilts to their highest yields since 1998.
• US Seeks UN Support to Break Iran’s Hormuz Chokehold: With Iranian oil exports at a standstill and the Strait of Hormuz paralyzed, the US and its allies are pushing a UN Security Council resolution that opens the door to military action against Tehran.
• Trump’s FDA Commissioner Is Resigning With Agency in Turmoil: Food and Drug Administration head Marty Makary is stepping down, leaving the federal health agency in flux but sparking hopes of stabilization within the biotech sector.

Opinion & Analysis#

• AI’s Big Guns Have a Serious Inflation Problem: Big Tech hyperscalers are staring down spiraling infrastructure costs, warning that it will take trillions of dollars to satisfy the market’s demand for generative AI chatbots.
• Bond Markets Are Too Cool About Hot Inflation: Bloomberg Opinion warns that the Treasury market is dangerously complacent about sticky price pressures, wrongly assuming the current energy-driven spike will simply fade without forcing the Fed’s hand.