Oil prices are continuing to creep higher in the wake of discouraging Middle East conflict news. President Trump called Iran’s latest deal offer a “piece of garbage” – and characterized the current ceasefire as on “life support.” Brent crude recently changed hands for around $107 per barrel, while WTI climbed back above $101.
Meanwhile, higher energy prices are filtering through the US economy. The Consumer Price Index (CPI) jumped 0.6% in April, pushing year-over-year inflation to a 35-month high of 3.8%. The “core” CPI rose 0.4% on the month, more than expected and enough to push the YOY core rate up to 2.8%. Trump floated a suspension of the federal gas tax to lower fuel prices. But it would only shave them by 18.4 cents a gallon – and Congress would have to go along.
US 30-Year Treasury Bond Yield (TYX)
Source: TradingView
Rising inflation globally – and various political developments – are putting upward pressure on long-term interest rates, too. The UK’s benchmark 10-year yield just jumped to 5.13%, the highest since 2008. The cost of borrowing for 30 years there surged to its highest since 1998.
The move stems from worries about fiscal discipline if Prime Minster Keir Starmer gets ousted, plus the Bank of England’s shift toward potential rate hikes rather than rate cuts. Here in the US, 10-year yields have risen to 4.4% and 30-year yields are hovering around 5%. That puts them only a handful of basis points away from a 19-year high.
Finally, EBay Inc. (EBAY) rejected GameStop Corp.’s (GME) audacious takeover bid, saying the $56 billion offer was “neither credible nor attractive.” GME’s CEO Ryan Cohen had offered $125 per share in cash and stock for EBay, about $24 more than where EBay was trading at the time. But after a cringe-worthy interview on CNBC by Cohen...plus ongoing questions about how GME would afford to buy its much-larger target...chances of a successful deal consummation are dropping.
