A summary of the comments from Central Bank Heads from the ECB Forum in Sintra Portugal

ECB President Christine Lagarde stated that the euro area has achieved its 2% inflation target, but emphasized the need to remain vigilant. She reiterated the ECB’s data-dependent stance, noting decisions will be made meeting by meeting, without committing to a particular rate path. On a broader level, she warned that any significant shift in the global role of the U.S. dollar would take considerable time. Lagarde also voiced deep concern about the erosion of truth in the digital era, citing AI and manipulated public opinion as emerging threats to data integrity.

Federal Reserve Chair Jerome Powell said the U.S. economy is in a good position and that, aside from tariff effects, inflation is at a favorable level. He noted that higher inflation readings are expected this summer due to tariffs, and suggested the Fed might have already cut rates were it not for that added risk. Powell reaffirmed the Fed’s commitment to a data-dependent, meeting-by-meeting approach and did not rule out a rate cut in July. He emphasized the need to monitor inflation and labor market data closely. On fiscal issues, he acknowledged that the U.S. debt path is unsustainable and needs to be addressed. Powell declined to comment on his future at the Fed but advised his eventual successor to avoid political entanglement.

Bank of Korea Governor Rhee Chang-yong offered brief remarks, emphasizing that the impact of tariffs is expected to be deflationary.

Bank of England Governor Andrew Bailey said inflation pressures remain, and the possibility of second-round effects is being watched closely. He noted signs of economic and labor market softening and believes the general direction for interest rates is still downward. While it’s too early to assess the full impact of tariffs, he warned of potential pressure on demand and supply chains. Bailey emphasized that policy remains restrictive but expects it to gradually become less so, moving toward neutral. He added that the concept of “restrictiveness” is central to BoE thinking and advised his successor to maintain humility.

Bank of Japan Governor Kazuo Ueda highlighted that although headline inflation has been above 2% for nearly three years, underlying inflation remains below target. He said any future rate hikes will depend on the overall inflation dynamic, including wage growth and expectations. Ueda noted Japan’s current policy rate is still below the neutral level and steered clear of commenting on trade negotiations.

The USD has moved higher, but that may have to do with the better US data released. US yields have moved higher with a 10 year now up 3.3 basis points at 4.259%.

US stocks have moved lower as hopes for an earlier rate cut diminished. The NASDAQ index is down -0.77%. The S&P index is down -0.24%. Both those indices closed at record levels yesterday for the second consecutive day.

The Dow Industrial Average is in positive territory with a gain of 0.57%. There are 14 Dow stocks with gains of over 1%.

• Nike (NKE): +3.74%

• UnitedHealth (UNH): +3.19%

• Amgen (AMGN): +2.97%

• Johnson & Johnson (JNJ): +2.30%

• Sherwin-Williams (SHW): +2.14%

• Merck & Co (MRK): +2.02%

• Coca-Cola (KO): +1.71%

• Home Depot (HD): +1.65%

• Apple (AAPL): +1.43%

• Honeywell (HON): +1.30%

• McDonald’s (MCD): +1.25%

• Walmart (WMT): +1.21%

• Procter & Gamble (PG): +1.07%

• 3M (MMM): +1.03%

Where are some of the losses in the big cap stocks? Below is a sampling of some of the losers today.

• Tesla (TSLA): -5.67%

• Palantir (PLTR): -5.11%

• MicroStrategy (MSTR): -4.80%

• Rivian Automotive (RIVN): -4.77%

• Super Micro Computer (SMCI): -3.86%

• Arm (ARM): -3.89%

• AMD (AMD): -3.61%

• Snowflake (SNOW): -3.32%

• Broadcom (AVGO): -3.37%

• First Solar (FSLR): -3.20%

• NVIDIA (NVDA): -2.88%

• Palo Alto Networks (PANW): -2.81%

• CrowdStrike Holdings (CRWD): -2.74%

• Roblox (RBLX): -2.42%

• Uber Tech (UBER): -2.29%

• Deutsche Bank (DB): -2.05%

• ARK Innovation (ARKK): -2.05%

• Fortinet (FTNT): -2.13%

• Micron (MU): -2.00%