Treasury
The Purchasing Managers' Index (PMI) report released by S&P Global on Thursday showed that, due to the Iran war, inflationary pressures intensified, and output growth in the services and manufacturing sectors slowed to the weakest three-month level since early 2024. Output price increases in April were the fastest since mid-2022, with manufacturing goods price gains hitting a 10-month high and services sales price increases surging to a 45-month peak. Although manufacturing output grew on AI investment and customer restocking, the overall labor market remained weak, with services sector confidence particularly subdued.
Federal Reserve chair nominee Kevin Warsh testified before the Senate Banking Committee on Tuesday, clearly stating that if confirmed, he would not act as Trump's 'puppet' on monetary policy or succumb to presidential pressure to cut rates. He also criticized the Fed's policy mistakes from 2021 to 2022 for leaving lingering inflation problems and advocated for fundamental policy reforms.
According to the latest EY data, despite economic uncertainties such as supply shocks, U.S. M&A deals exceeding $100 million in April 2025 saw a 43% quarter-over-quarter increase in value and a 25% rise in volume, driven by demand for AI capabilities. Large deals in the technology sector grew 31%, while consumer goods, life sciences, and electric utilities posted triple-digit growth.
Federal Reserve Policy Committee Vice Chairman John Williams said on Thursday that despite significant risks and uncertainties from the Iran war, the current monetary policy stance is sufficient to balance employment and price stability goals. He expects the U.S. economy to grow by 2% to 2.5% this year and noted that surging energy prices have pushed up inflation, but core inflation remains moderate.
The Federal Reserve's Beige Book survey released Wednesday shows that uncertainty stemming from the Iran war has prompted U.S. companies to delay hiring, pricing, and capital investment decisions, and has raised costs for energy and petroleum-based products such as plastics and fertilizers. The report notes that overall price pressures remain moderate, but input costs have risen faster than selling prices, squeezing profit margins.
The U.S. PPI rose 0.5% month-over-month in March, below market expectations and matching February's increase, showing that energy price hikes triggered by the war have not yet caused a severe impact on the overall economy. Core PPI, excluding food and energy, rose only 0.1%. A 15.7% surge in gasoline prices contributed nearly half of the increase in goods prices. The IMF downgraded its U.S. economic growth forecast for this year to 2.3% and warned that if oil prices remain high, global growth could fall below 2%. Most business economists believe high inflation is temporary but raised the probability of a U.S. recession in the next 12 months to 35%.
According to the latest Wolters Kluwer survey, most corporate economists believe the impact of the Iran conflict on inflation and economic growth is temporary, expecting the US economy to grow 2.2% this year. However, geopolitical tensions have raised the recession probability to 35% and delayed expectations for Fed rate cuts.
U.S. CPI rose 0.9% month-over-month and 3.3% year-over-year in March, with gasoline prices surging 21.2% contributing nearly 75% of the increase. The consumer confidence index fell to 47.6 in April, the lowest since data began in 1952. The energy price shock from the Iran conflict was a major driver, but core inflation remained moderate.
Adyen launched an intelligent treasury management tool on Thursday to help businesses integrate fragmented banking and payment systems. Early adopters include Etsy and Expedia Group. Research shows that companies manage an average of 5-6 primary banks and over 40 bank accounts, hindering liquidity flow.
Data from the US Bureau of Economic Analysis shows that real personal consumption expenditures edged up 0.1% month-on-month in February, following zero growth in January. With inflation persistently above the Federal Reserve's 2% target, compounded by energy price spikes driven by the Iran war, consumer confidence remains low and the spending outlook is weak. Fed officials and economists warn that energy and tariff uncertainties could further weigh on consumption and growth in the first half of the year.