German Inflation Slows to 2.1%; Dimon Warns of Bond Market Crack
Key Takeaways
- German inflation slowed to 2.1% in May, exceeding forecasts but below April's 2.2%.
- Jamie Dimon warns of a bond market crack due to excessive government spending.
- Trump announces doubling of tariffs on steel to 50% in Pittsburgh.
- China plans $70B infrastructure boost to cushion economy from US tariffs.
- U.S. consumer spending slows; headline inflation at 2.1% year over year.
Top Stories
German inflation slows to 2.1% in May, exceeding forecasts.
On May 30, 2025, it was reported that German inflation slowed to 2.1% annually in May, exceeding economists' predictions of 2% but lower than April's 2.2%. The report was published on May 30, 2025.
Jamie Dimon warns of bond market crack.
On May 30, 2025, Jamie Dimon, CEO of JPMorgan Chase, warned that a crack in the bond market is “going to happen” after the US government and Federal Reserve “massively overdid” spending and quantitative easing.
Trump announces doubling of steel tariffs to 50%.
On May 30, 2025, in Pittsburgh, Donald Trump announced a doubling of tariffs on steel to 50% and defended the passage of US Steel under Japanese flag.
China plans $70B infrastructure boost amid US tariffs.
On May 30, 2025, it was reported that China plans to allocate 500 billion yuan ($70 billion) to fast track new infrastructure projects to cushion the economy from US tariffs. The nation’s three policy banks will raise funds and buy stakes in projects under the “new financing policy tool”.
U.S. consumer spending slows; inflation at 2.1%.
On May 30, 2025, it was reported that U.S. consumers are slowing down, with headline inflation at 2.1% year over year. US goods imports also fell by 19.8%.
Economic Trends
US consumer sentiment improves; inflation expectations decline.
On May 30, 2025, a Michigan survey indicated that US consumer sentiment is improving and inflation expectations are coming down. The Conference Board one year add inflation number fell from 7 to 6 and a half percent.
Fed cautious due to tariff uncertainties.
On 2025-05-30, Robson and Toublan discussed economic data, noting the Fed's cautious approach due to tariff-related uncertainties impacting consumer spending and growth.
Hard data needed amid soft data concerns.
On 2025-05-30, Colin and Andy agreed on the necessity to observe hard data, considering soft data concerns and potential conflicts in the Fed's mandates amid persistent inflation.
GOP tax bill's impact on US budget debated.
On 2025-05-30, John Waldron of Goldman Sachs voiced concerns about the GOP's tax bill and its potential impact on the US budget deficit. Peter Navarro countered, suggesting a potential $2 trillion surplus instead of the CBO's projected $3.7 trillion addition to the national debt.
Costco's growth accelerates; 8% goods from China.
On May 30, 2025, it was reported that Costco's growth is accelerating. Costco gets 8% of their goods from China.
Commodity Corner
Nigeria aims to boost oil investment via executive order.
On May 30, 2025, Nigeria’s President Bola Tinubu signed an executive order aimed at drawing investment in the oil sector by lowering project costs and protecting government revenue. The directive caps tax credits and introduces a performance-based tax incentive.
Money managers increase short bets on Brent crude.
According to figures released on May 30, 2025, money managers increased their short-only bets on Brent by 16,922 lots to 130,019 lots in the week ended May 27, the most in eight months. Short-only bets against West Texas Intermediate also rose to a three-week high.
Global Debt Watch
Ukraine skips $665M debt payment amid restructuring talks.
On 2025-05-30, Ukraine announced that it is skipping a $665 million payment on government debt linked to economic growth after failing to agree on restructuring terms with creditors. Ukraine agreed with investors last year to remove a cross-default clause between its GDP warrants and regular international bonds, protecting it from a scenario where a default on one instrument carries over to other debt.
New World Development defers $77.2M interest payments.
On May 30, 2025, it was reported that New World Development Co., controlled by Henry Cheng's family empire, decided to defer interest payments on four perpetual notes, totaling $77.2 million of debt obligations due on June 30, 2025, amid a struggle with HK$210.9 billion ($26.9 billion) of liabilities.
Zimbabwe lacks financial support for debt arrears.
On May 30, 2025, Finance Minister Mthuli Ncube stated that Zimbabwe hasn’t received any concrete commitments of financial support from 10 nations it appealed to for help in its long-standing efforts to clear debt arrears.
Market Insights
Markets on edge: Trump accuses China of trade violation.
On May 30, 2025, markets were on edge due to tariff concerns after President Trump accused China of violating the trade agreement. Trump also expressed displeasure with discussions with Beijing regarding trade differences, specifically non-tariff barriers and export curbs.
US stocks recover; S&P 500 best May since 1990.
On May 30, 2025, US stocks recovered from session lows to close with little change after President Donald Trump mentioned he expected to speak with Chinese President Xi Jinping. The S&P 500 Index closed flat in New York, marking its best May since 1990 with a 6.2% increase for the month.
US dollar's gains insufficient to reverse broader declines.
On May 30, 2025, it was reported that the US dollar's gains this week weren’t enough to reverse its broader declines due to US trade and policy uncertainty.
Private credit doesn't outperform high-yield bonds: Dimensional.
On May 30, 2025, Savina Rizova, co-chief investment officer at Dimensional Fund Advisors, stated on the Bloomberg Intelligence Credit Edge podcast that private credit does not outperform high-yield bonds. Dimensional manages almost $800 billion in assets.
Wall Street traders struggle with Trump-era market turbulence.
On May 30, 2025, it was reported that Wall Street’s macro traders are getting schooled in Trump-era turbulence, finding it a source of endless punishment for anyone clinging to a time-honored macro-investing playbook. As of May 30, 2025, market narratives keep shifting faster than traders can adjust positions with tariffs going on and off again.
Focus on intermediate-term maturities; 10-year yield near 5%.
On 2025-05-30, Colin suggested focusing on intermediate-term maturities to hedge against reinvestment risk and potential increases in long-term yields, anticipating the 10-year yield potentially reaching around 5%. Lindsay Rosner of Goldman Sachs Asset Management noted the US market's depth encourages investors to seek US assets, particularly treasuries. Concerns exist about deficits needing financing with debt amid elevated interest rates, potentially leading to the ten-year Treasury yield reaching 5%.
Dollar could slightly decrease; Treasuries remain safe.
On 2025-05-30, Collin and Lindsay discussed the potential impact of the "revenge clause" on foreign appetite for U.S. assets, noting client inquiries about international ramifications but no change in their view on the safety of Treasuries. Collin and Lindsay suggested the dollar could slightly decrease due to adversarial trade policies but are not anticipating it losing its reserve currency status.
Markets lack 'A-Ha' moment on slowing economy.
On May 30, 2025, Dutta commented that markets are lacking an 'A-Ha' moment regarding the slowing economy.