Fed Minutes Show Inflation-Fighting Commitment, Spur Market Rally

The Fed’s May meeting minutes dropped on Wednesday, and they confirmed the central bank’s intent to “move ‘expeditiously’ to bring down the most rapid pace of inflation in 40 years, with most participants expecting as many as three half-a percentage-point interest rate increases in the months ahead” - NYTimes and WSJ and Bloomberg and Marketplace

That affirmation of the Fed’s sense of urgency in addressing inflation (coupled with a hint of late-year flexibility) was enough for a Wall Street rally, as traders apparently welcomed the news that the Fed was on the case—even if it meant further rate hikes coming down the pike - WSJ and Bloomberg and MarketWatch

New CBO figures released this week project that the federal deficit is projected “to decline sharply this year as spending on pandemic aid programs subsides and the economy continues to expand.” In real money, that means a mere $1 trillion for the year ahead as compared to $2.7 trillion in 2021, “marking a return to the economy’s prepandemic trajectory” - NYTimes

The SEC is poised to issue new regulations for ESGs—the “investment funds that tap into public angst about climate change or social justice”—in an attempt to “address concerns about ‘greenwashing’ by asset managers seeking higher fees - WSJ and TechCrunch and Law360

Meanwhile, the CFPB is probing why “some major credit card companies aren’t regularly providing data to credit bureaus on actual monthly payments their borrowers are making on their accounts”—a practice the Bureau claims has the “potential for harm” – Law360

Good luck being Parag Agrawal these days, the Twitter CEO trying to stay the course while the hurricane of Elon Musk and his up-in-the-air $44 billion takeover of the social media platform swirls around him - NYTimes

On the plus side (if you’re glass-half-full kind of people), Agrawal just tied a bow on a long-running dispute with the FTC and DOJ over Twitter’s alleged failure “to protect users’ data privacy in line with a 2011 agreement with the FTC.” Under the terms of an arrangement announced this week, Twitter will pay $150 million in civil penalties to address misrepresentations about its “use of the nonpublic contact information it collected from its platform’s users” – Law360 and NPR and NYTimes and Mashable and TechCrunch

Aramco, the Saudi “state oil giant,” has reportedly reached out to Valvoline “about a potential takeover of its lubricants business” as Aramco looks to diversify its holdings. Valvoline “has a market value of around $6 billion” and makes “engine and automotive products and operates and franchises oil-change service centers around the U.S.” - WSJ

KC Fed President Esther George has announced her intent to retire in the coming year, a move that creates “a second leadership opening among the 12 regional Fed banks in 2023.” George has helmed the KC bank since 2011 - Bloomberg

Staying north of the border, this time with the Battle of Alberta, which—with my Wild now out of the playoff picture—has been awfully hard to pass up - NYTimes

Stay safe,

MDR

The Robins Kaplan Financial Daily Dose features top stories and latest news headlines in financial markets, banking, securities and technology topics.