Charles

Warsh has signaled he wants to change the Fed’s preferred inflation gauge. The Fed has used Core PCE, which excludes food and energy, as its benchmark since 2000. Warsh favors Trimmed Mean PCE, which removes the most extreme price movements each month instead of excluding whole categories. The practical difference: Trimmed Mean PCE currently reads 2.36%, well below the 3.20% reading on Core PCE. Depending on which measure the Fed follows, the case for rate cuts looks very different. This is not a minor procedural change. The metric the Fed uses to gauge inflation directly determines when it judges the economy to be at target. If Warsh moves the committee toward Trimmed Mean PCE, he is mathematically moving the Fed closer to a declared victory on inflation, which creates runway for rate cuts even as headline readings stay elevated. You’d think with 400+ Ph.D. economists and 500+ researchers on the payroll, the Fed would run the most sophisticated macro forecasting operation on the planet, leaving Bloomberg and every major hedge fund in the dust. Not even close. When the data doesn’t cooperate, just change the data. Same thing I saw in the Army when time or weather worked against higher leadership, and we would quietly move the goalposts rather than admit the standard couldn’t be met. Can you tell why I didn’t stick around for the full 20 years?

The Chinese and US economic and trade teams have achieved preliminary outcomes in the economic and trade field, including agreeing to establish a Trade Council and an Investment Council to discuss each side’s respective concerns in the areas of trade and investment. The two sides will discuss issues including tariff reductions on relevant products through the Trade Council, and agreed in principle to reduce tariffs on products of equal scale that concern each side, a spokesperson for China’s Ministry of Commerce said on Saturday, when briefing the media on China-US economic and trade consultations held in South Korea on May 13. MOFCOM noted that the two sides also agreed to promote the expansion of two-way trade, including in agricultural products, through arrangements such as mutual tariff reductions on products within a certain scope. The two sides reached relevant arrangements regarding China’s procurement of aircraft from the US, as well as the US side ensuring the supply of aircraft engines and components to China, and agreed to continue advancing cooperation in related fields, the spokesperson said.

Putin to visit Beijing five days after Trump leaves. This is not a coincidence. This is geopolitics in real time. Russia needs to know exactly what Xi and Trump discussed. Any shift in China’s position on trade, technology, sanctions, or Ukraine directly impacts Moscow’s strategic calculus. Meanwhile, Beijing is doing something extraordinary - it is hosting the leaders of both Washington and Moscow within days of each other - not at a multilateral summit, but in Beijing, on Xi’s terms. That is the real story. This is not China being pulled between two powers. This is China demonstrating that it has become the indispensable center of the emerging multipolar world. The West still does not understand what it is watching.

BREAKING: President Xi stuns the room saying to Trump: “We should be partners, not rivals" 🇺🇸 🇨🇳 I NEVER in a million years would have thought Xi would say something like that The Deep State is shaking right now

This may be the most insane map of the SMO thus far! Russia launched over 14,000 drones, and more than 6 dozen missiles on targets all over Ukraine.

It is a fact that most assessments about the US ability to retake Hormuz were sanguine. What seems to have happened is that analysts failed to keep track of Iranian capabilities. Old assessments were recirculated as if Iran were standing still when, in fact, its striking power was growing dramatically. There were both intelligence failures and analytical failures. This is not just executive level incompetence. Far from it. The entire defense community sensu lato got it wrong. All of them. No exceptions. A lot of them are doing half mea culpas. But the truth is that they were all catastrophically wrong.

In Gaza, a boy comforts his younger brother after losing their mother.