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Senate Democrats Press Kevin Warsh on Fed Independence
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- Kevin Warsh declined to tell senators whether he would resign as Fed chair if the president asked, likely costing him Democratic support.
- Warsh declined to comment on President Trump’s attempt to fire Fed governor Lisa Cook, citing ongoing litigation.
- Warsh suggested he is skeptical of official inflation statistics and suggested reforms to data collection.
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Bank of Canada to Hold Rates Steady While War Worries Brew
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- The Bank of Canada is expected to keep its main interest rate unchanged, but elevated energy prices create doubt about holding rates steady.
- The Middle East conflict has closed oil-tanker traffic in the Strait of Hormuz, sharply lifting near-term inflation expectations.
- Uncertainty surrounding stalled U.S.-Canada trade talks for the USMCA treaty also complicates the Bank of Canada’s rate decisions.
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Thailand’s Central Bank Holds as Mideast War Clouds Outlook
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- Thailand’s central bank held its policy rate steady at 1.00% after two consecutive cuts.
- The Bank of Thailand decision aims to gauge the Middle East war’s impact on the fragile economy.
- All 12 economists polled by The Wall Street Journal had expected the central bank’s decision.
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U.K. to See Slowdown in Growth, Higher Inflation Due to Mideast Conflict
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- National Institute of Economic and Social Research lowered the U.K.’s 2026 growth forecast to 0.9% and raised its inflation forecast to 3%.
- In an adverse scenario, the Bank of England would need to raise its key interest rate to 5.25% from 3.75% to tame inflation.
- Slower growth will weaken tax revenues, while higher bond yields and inflation will increase government interest payments.
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Australia’s Consumer Inflation Jumps on Oil Shock
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- Australia’s consumer-price index rose 4.6% in the 12 months to March, its highest level since September 2023.
- The inflation rate, now above the Reserve Bank of Australia’s 2.5% target, increases pressure for a May interest rate hike.
- Housing costs rose 6.5% and transport costs increased 8.9%, with gasoline prices up over 30% in March.
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Middle East Conflict to Weaken Growth as Commodity Prices Surge, World Bank Says
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- The World Bank said a Middle East conflict is set to push inflation higher and growth lower in developing economies.
- The World Bank expects commodity prices to rise 16% this year, the first annual increase since 2022.
- Brent crude prices are expected to average $86 a barrel this year, with global oil production likely to fall 1.5% in 2026, the World Bank said.
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Canada Shows Improved Bottom Line on Economic Resilience, Higher Energy Prices
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- The Carney-led government delivered an economic update showing a C$60 billion fiscal improvement over five years.
- The government plans to invest the windfall in infrastructure and worker training to counter President Trump’s trade policy.
- Officials also unveiled a C$3 billion annual payroll tax cut and other affordability measures for Canadians.
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Spanish Inflation Rises Further as Iran War Drives Energy Prices Higher
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- Spain’s annual inflation rate rose to 3.5% in April, the highest since June 2024, driven by Middle East tensions and energy prices.
- The European Central Bank is expected to keep interest rates on hold while assessing the impact of higher energy prices.
- The Bank of Spain revised its inflation expectations, projecting consumer prices to rise 3.0% in 2026 and 2.5% in 2027.
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Ukraine Hits Russia’s Oil Machine, but Struggles to Dent Its Economy
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- Ukraine struck a major Russian oil refinery in Tuapse, the latest in a series of drone attacks on Russian energy infrastructure.
- The attack on the Tuapse refinery caused toxic smoke, prompting warnings for residents, and the facility was already shut down from a prior strike.
- While Russian oil production dropped after earlier strikes, it has rebounded, and revenues remain high due to price increases from Middle East conflict.
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April Consumer Sentiment Improved, According to Conference Board Survey
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- A Conference Board survey indicated consumer sentiment rose to 92.8 this month, countering economists’ expectations for a decline.
- A University of Michigan survey reported Americans’ economic mood is at the lowest recorded level in decades of polling.
- Consumers felt better about the job market, and corporate executives reported solid demand and retail sales grew in March.
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Iranians Feel the Pain as Their Economy Descends Into a Death Spiral
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- War and a U.S. naval blockade have caused severe economic hardship in Iran, leading to more than one million jobless.
- The Iranian government has raised wages, subsidized goods and provided cash handouts to help contain economic fallout.
- Tehran has offered to stop its attacks in the Strait of Hormuz in exchange for a full end to the war and a lifting of the U.S. blockade of Iranian ports.
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About Us
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WSJ Pro Central Banking brings you news and analysis from a global team of reporters and editors at The Wall Street Journal and Dow Jones Newswires. Send your tips, suggestions and feedback to service@dowjones.com. An artificial-intelligence tool created these summaries, which are based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
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