Good morning. The Fed, BoE and BOJ will meet this week, with the Fed likely to raise rates as the bond market demands it. The BoE is expected to hold, while the BOJ will wait until autumn. Oil prices remain high, and Middle‑East tensions have shifted from the Strait of Hormuz to the Red Sea, keeping markets uneasy.

The US labour market remains the key uncertainty. Unemployment has stayed below the Fed’s 4.5% Nairu for almost five years, suggesting near‑full employment. Retail sales have accelerated for four of the last five months, and weekly jobless claims hover around 200,000, near historic lows. Yet wage growth has slowed to pre‑pandemic levels, conflicting with a tight market. Surveys from the Conference Board, ISM and NFIB are inconsistent, so analysts favour hard data.

Matt Klein notes a sharp decline in wages for private education and healthcare workers; excluding them shows wages are stable or slightly rising. The puzzle of tight employment versus soft wages keeps the Fed’s policy outlook uncertain.

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