by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with an analysis of the UAE’s OPEC exit and its implications for the cartel. We then examine King Charles’s White House visit and what it signals for the US-UK relationship. Next, we discuss the unexpected rise in consumer confidence, China’s detainment of Panamanian vessels, Beijing’s decision to ease energy export restrictions, and a new Republican capital gains tax proposal. As always, we include an overview of recent domestic and international economic data.

 OPEC Break Up: The United Arab Emirates announced its plan to withdraw from OPEC in May. Although the UAE had previously signaled its intention to operate outside OPEC’s production constraints, the ongoing war with Iran has forced a shift toward unrestricted output. This decision highlights how the conflict has strained cooperation among OPEC members, particularly as some members face the immediate need to fund infrastructure repairs following regional strikes.

• The UAE will exit OPEC on May 1, ending nearly six decades of membership. The move delivers a meaningful blow to the cartel as the UAE is its third-largest producer and accounts for roughly 12% of core members’ output. The decision signals an intent to accelerate production growth once operational plans are finalized, positioning the country to capitalize on recovering demand, particularly when the Strait of Hormuz reopens, without the constraints of OPEC quotas.
• A smaller OPEC is likely to raise questions about the group’s ability to enforce production constraints effectively. The UAE’s decision to withdraw appears driven in part by its growing rivalry with the cartel’s de facto leader, Saudi Arabia, as well as frustration with Riyadh’s quota-setting dominance and its reluctance to take more forceful steps to reopen the strait. While there are no clear signs of a broader exodus, the UAE’s departure is likely to cast doubts on OPEC’s overall influence on the global oil market.
• OPEC’s influence over global energy markets has eroded since the US shale boom of the 2000s. The cartel only regained some control after coordinating a supply surge to reassert pricing power. The UAE’s exit may signal expectations of an impending price war once the strait reopens. While oil prices could remain elevated in the near term, they are likely to face downward pressure as transit resumes and Gulf producers bring additional capacity back online.

 The Special Relationship: The White House hosted King Charles III on Tuesday as both nations seek to repair strained relations. During his visit, King Charles delivered a speech to Congress emphasizing the importance of reconciliation with allies and upholding the democratic principles on which the United States was founded. The address struck a diplomatically lighthearted tone while subtly acknowledging recent tensions between Washington and its traditional partners, particularly the United Kingdom.

• The visit comes at a contentious moment when both nations have displayed mutual distrust, particularly over the war with Iran. The US has criticized the UK for disloyalty after Britain refused to allow American forces to use its air bases for strikes. Meanwhile, the UK has faulted the US for prioritizing Israel over its NATO allies through what many members view as a disproportionate military response against Iran. Tensions escalated to the point that the US publicly questioned British sovereignty over the Falkland Islands.
• Although King Charles’s speech was seen as an effort to air grievances while mending the relationship, there are signs that the rift may be irreparable. Following the address, the UK ambassador to the US reportedly claimed that America’s “special relationship” is now with Israel rather than Britain, reflecting a broader shift in the political alignment. His comments likely reflect the ongoing pessimism that UK leadership feels toward the US.
• While King Charles’s visit may ease near-term tensions, it is unlikely to reverse the broader fracturing of US-European relations. We continue to expect NATO members to accelerate defense and aerospace spending as they seek greater autonomy from US security guarantees. European defense contractors are likely to be the primary beneficiaries of this strategic realignment.

 Consumer Confidence: The Conference Board’s consumer confidence report showed sentiment rose in April, as optimism about the job market outweighed concerns over elevated energy prices. The index climbed unexpectedly to 92.8 from 92.2, beating expectations of 89.0. While the survey showed households remain worried about inflation stemming from the Iran conflict, strong hiring and limited layoffs helped offset those concerns. The uptick in confidence suggests household consumption may accelerate later this year.

 China-US Frictions: The US and several Latin American countries have condemned China for detaining 70 Panamanian-flagged vessels following an unfavorable ruling by Panamanian courts that annulled contracts granted to Chinese companies operating ports in the region. Beijing has accused Washington of leveraging its influence to undermine China’s regional presence. The dispute is expected to feature prominently in talks covering trade, AI, and broader geopolitical issues.

 China Energy Exports: Beijing is set to ease export restrictions on select energy products as it seeks to alleviate global supply shortages. China had initially limited sales of jet fuel, gasoline, and diesel at the start of the year to protect domestic inventories. However, those restrictions appear to have been relaxed, as evidenced by a surge in export permit applications from Chinese companies. The release of Chinese fuels could provide relief, particularly to Asian nations seeking alternatives to energy supplies from the Middle East.

 Another Tax Cut? Republican lawmakers are proposing lower capital gains taxes to address affordability concerns. The legislation would index capital gains to inflation, reducing the effective tax burden on investment profits. While the level of support for the bill remains unclear, it is likely to be incorporated into the next tax and spending package later this year. The move could incentivize greater equity ownership as investors seek to minimize their tax liabilities.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with a short update on the war in Iran. We next review several other international and US developments with the potential to affect the financial markets today, including a decision by the Bank of Japan to hold its benchmark interest rate steady despite rising price inflation due to the war and new data showing US banks have responded to deregulation by boosting their holdings of Treasurys, potentially helping cap US bond yields.

United States-Israel-Iran: New reporting confirms that Iran is rapidly running out of facilities to store its oil output as the US continues its blockade of Iranian oil-export terminals and other ports. Iran is trying to ship more oil to China by rail, but the effort is not likely to end the problem, so we see an increasing risk that Iran will have to shut in production at well sites.

• If Iran does shut in its oil wells at scale, it would be difficult and time consuming to bring them back into production quickly when the conflict ends. Some of the wells might never produce oil again.
• This is therefore another example of how the war could leave lasting scars on the global supply of oil and keep post-war oil prices from falling back to their pre-war levels.
• As the US and Iran remain far apart on their negotiating demands this morning, the Strait of Hormuz remains effectively closed and the US continues its blockade. With the standoff continuing, investors are becoming increasingly unnerved by the worsening impact on energy and commodity markets. Brent crude oil prices so far today have therefore risen about 3.0% to $104.77 per barrel.

Japan: As widely expected, the Bank of Japan today held its benchmark short-term interest rate unchanged at 0.75%, despite the central bank projecting increased consumer price inflation because of the war in Iran. However, three of the nine members of the policy committee voted against the move and called for an immediate rate hike to help contain price pressures. The BOJ has been raising rates gradually to normalize policy now that deflation is less of a concern, but some investors and policymakers believe the central bank should be moving faster.

Germany: New data from the national statistics agency today showed that just over 654,000 babies were born in Germany in 2025, barely half the 1.36 million born at the peak of the baby boom in 1964 and the lowest number since post-war records began in 1946. Meanwhile, there were about 1.01 million deaths in Germany last year, highlighting the continued demographic headwinds for economic growth.

United Kingdom: In a sign of Labour Party Prime Minister Starmer’s increasing political vulnerability, parliament today will begin hearings on Starmer’s appointment of Lord Peter Mandelson as British ambassador to the US despite Mandelson’s ties to disgraced financier Jeffrey Epstein. Ultimately, the process could lead to lawmakers referring Starmer to the privileges committee for an inquiry into claims he misled parliament about Mandelson’s appointment. The resulting political instability is likely to be negative for British stocks going forward.

Canada: Prime Minister Carney yesterday announced the creation of Canada’s first sovereign wealth fund, initially capitalized at $18 billion and known as the “Canada Strong Fund.” The fund will work with the private sector to finance 15 infrastructure proposals with the country’s Major Projects Office, which was set up in August. Carney also said the fund will include a retail investment product for individuals. The fund is aimed at boosting investment and spurring faster economic growth amid the challenges of a more hostile, protectionist US.

US Monetary Policy: The Fed’s policy committee begins its latest two-day meeting today, with its decision to be released tomorrow at 2:00 PM ET. Based on interest-rate futures prices, investors are nearly unanimous in expecting the committee to keep its benchmark fed funds rate unchanged at 3.50% to 3.75%. The more significant news will be whether Chair Powell uses his post-decision press conference to reveal anything about his plans for staying on the Fed board after his chairship ends next month.

US Bond Market: New research by the Financial Times shows that net Treasury inventories held by primary dealers — the big banks that underwrite US government debt — have risen to about $550 billion on average this year, from less than $400 billion in 2025. The data suggests the recent easing of capital rules has enticed banks back into the market, providing incremental demand for Treasurys and probably helping to hold bond yields somewhat lower than they otherwise would be.

US Housing Industry: New reports say a bill passed by the Senate last month is freezing some large-scale home construction projects across the country even though it hasn’t yet passed the House or become law. The bill includes dozens of measures to make it faster and easier to build homes, such as streamlining environmental reviews and cutting rules for factory-built homes. However, it would also force developers to sell homes built to rent within seven years, forcing developers to shelve large-scale build-to-rent projects in states such as Arizona and Texas.

US Artificial Intelligence Industry: According to inside sources, OpenAI has been missing internal financial and operational goals since late last year, reflecting slowing growth in the number of regular ChatGPT users. In response, CFO Sarah Friar and members of the board have become worried that the firm might not be able to meet its contracts for future computing-power purchases. They are therefore pushing to impose more discipline on future contracts and on the firm’s build-out of data centers.

• The news of missed financial and operational goals could undermine investor enthusiasm for OpenAI ahead of its expected initial public offering later this year.
• Slowing growth in ChatGPT usage could simply reflect growing competitive pressure from other popular AI services. All the same, investors may start to interpret the slowdown as a sign that the industry is maturing faster than expected. That kind of concern would likely be negative for a swath of AI-related stocks.

US Budget Airline Industry: A trade group representing low-cost airlines yesterday said it would ask the Trump administration for $2.5 billion to offset some of the spike in fuel costs from the war in Iran. US jet-fuel prices have essentially doubled from their typical level before the war, creating an especially onerous financial burden on low-margin budget airlines. Bankrupt Spirit airlines is also seeking a $500-million loan from the federal government to stave off liquidation — a deal that could see the US taking a stake in the airline.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with a quick update on the weekend shooting at the White House Correspondents’ dinner and on the war in Iran. We next review several other international and US developments with the potential to affect the financial markets today, including a Chinese threat to retaliate against the European Union if it implements a proposed bill to protect its domestic manufacturing base and further evidence that the US Senate is likely to approve Kevin Warsh as the new chair of the Fed.

Correspondents’ Dinner Attack: Law enforcement officials have announced that they believe the man who opened fire at the White House Correspondents’ dinner over the weekend was targeting President Trump and administration officials but was acting alone. The suspect will be arraigned in court today. For investors, the failure of the attack means there will be no abrupt change in the US policy environment in the near term, but sympathy voting or other ballot dynamics could shift as the November mid-term Congressional elections approach.

United States-Israel-Iran: President Trump on Saturday said his top negotiators for Iran, Steve Witkoff and son-in-law Jared Kushner, would not travel to Pakistan for a new round of talks despite announcements last week that they would be going. The development likely shows how far apart the US and Iran remain in their demands. Each side apparently believes it has the stronger position to weather the standoff, raising the possibility that global oil and commodity disruptions will continue to push up prices and threaten the global economy and risk assets.

• The US is apparently making little progress persuading Iran to turn over its stockpile of enriched uranium, curtail its nuclear program, and reopen the Strait of Hormuz.
• Separately, an internal Pentagon email leaked late last week discussed several possible retaliatory measures against allies in the North Atlantic Treaty Organization for their failure to provide access, basing, and overflight rights in support of the US-Israeli war against Iran, despite provisions in the NATO treaties that only obligate the allies to cooperative defensive measures if NATO countries are attacked. For example, the measures include possibly suspending Spain’s membership in NATO.
• With the strait remaining effectively closed, global oil prices continue to rise gradually. As of this writing, Brent crude is trading hands at $100.18 per barrel, up 1.0% on the day.

United Kingdom-European Union: UK government ministers dealing with technology issues are reportedly pushing back against Prime Minister Starmer’s effort to partly reverse Brexit and partially re-integrate the UK and EU economies, including by adopting a vast array of EU regulations. The technology ministers are warning that the plan would stifle British firms’ ability to innovate in areas ranging from artificial intelligence to lab-grown meat. In turn, we think the plan could potentially weigh on the British economy and stock values.

China-United States: The Chinese government said today that it is blocking Meta’s planned purchase of Chinese artificial intelligence start-up Manus, citing national security concerns. Meta has countered that the deal met legal requirements and signaled that it will appeal the ruling. Nevertheless, the announcement signals that China will closely guard its AI innovations to keep them out of US hands, potentially keeping US investors from benefitting from them.

China-European Union: Beijing today warned the EU not to implement its proposed new Industrial Accelerator Act aimed at protecting and growing the region’s domestic manufacturers. If the EU proceeds with the legislation and Chinese firms are harmed, Beijing threatened to impose “countermeasures” in retaliation. The development is further evidence that the US isn’t the only major economy starting to push back against Chinese dumping. That pushback will further raise trade and investment tensions and potentially slow Chinese economic growth.

Romania: Today, the center-left Social Democratic Party said it would join the far-right, ultranationalist Alliance for the Union of Romanians in a no-confidence vote against the center-right government later this week. The SDP’s willingness to vote in tandem with the AUR marks another case in which one of Europe’s far-right parties has been embraced by traditional voters or parties. As it is increasingly embraced, the far-right could gain power in one of the major countries, such as Germany or France, with major implications for foreign and domestic policy.

Colombia: Just a month before the country’s presidential election, authorities said a drug-trafficking group based in southern Colombia detonated 26 bombs that killed 20 civilians on Sunday. The attacks were the most extensive in Colombia in many years and raised concerns about more attacks in the run-up to the balloting. For investors, they are also a reminder that Latin America faces security risks, even though the commodity-driven region looks increasingly attractive as Asia and Europe face economic headwinds from high energy prices.

US Monetary Policy: Senator Thom Tillis of North Carolina yesterday confirmed he will now vote to advance Kevin Warsh’s nomination to be the new chair of the Fed. The announcement came after Tillis received assurances from the Department of Justice that it is dropping its prosecution of current Fed Chair Powell over the central bank’s big headquarters construction project. That prosecution has been widely seen as White House pressure on Powell to leave office and/or cut interest rates more quickly.

• If Tillis really does vote to advance Warsh’s nomination out of committee, Warsh is highly likely to become the new Fed chair when Powell’s term ends next month. However, there is still some question whether Powell will relinquish his seat on the Fed’s board, which does not expire at the same time as his chairship.
• Separately, the Fed’s policy committee will hold its latest two-day meeting this week, with its decision expected to be released on Wednesday at 2:00 PM ET. The committee is widely expected to keep its benchmark fed funds rate unchanged at 3.50% to 3.75%.

US Artificial Intelligence Industry: New reports say the rising cost of computing resources is eating up corporate information technology budgets to the point where human workers are sometimes seen as more cost effective than AI. The reports suggest that AI may not lead to the full job destruction that some analysts are expecting. The reports also suggest the current boom in computing use for AI may at some point have to slow down, which would likely take some of the momentum out of AI stocks.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens by examining early evidence that AI is beginning to reshape labor markets in select sectors. We then turn to Spirit Airlines and how its distress could serve as a gauge of how the US might respond if the war begins to weigh more heavily on the economy. Next, we provide an update on Iran, explain why Beijing is pushing back against US investment, and highlight new signs that states are advancing redistricting efforts. As always, we include an overview of recent domestic and international economic data.

AI Job Cuts: The growing adoption of AI has prompted many firms to reduce headcount as they reallocate resources toward investment in the technology. Companies are increasingly restructuring operations to better capture AI-driven efficiencies and enhance profitability. The impact has been most pronounced in service-oriented sectors, particularly within technology and finance. A recent uptick in layoffs, especially in industries historically associated with strong wage growth, is likely to intensify broader concerns about AI’s effect on employment.

• Tech and finance companies are leading the charge to reduce headcount as a way to offset rising AI-related spending. Meta recently announced plans to lay off 10% of its workforce while also scaling back hiring. Microsoft, meanwhile, has begun offering early retirement packages to employees whose combined age and years of service total 70 or more, as it targets a 7% reduction in staff. In financial services, KPMG has not only cut its number of audit partners by 10% but also reduced employee benefits and paid time off.
• The push by technology and financial firms reflects their heavier investment in AI, which has also contributed to disproportionately large workforce reductions in these sectors. According to Ramp’s AI Index, 77% of technology companies have already adopted AI, compared with roughly 68% in finance, both well above the estimated nationwide adoption rate of around 50%. At the same time, employment in these sectors has been on a steady decline since 2024.
• The drive to reduce headcount reflects efforts by technology and financial firms to fund expanding AI initiatives and improve overall efficiency. This is especially evident in the tech sector, where companies are ramping up spending on AI infrastructure and building out data center capacity across the country. In finance, firms are likewise using workforce reductions to cut costs while automating a growing share of routine and analytical tasks through the use of AI tools.
• The move by technology and financial firms to offset AI investments with reductions in headcount has not yet spread broadly across the US corporate landscape. As AI adoption becomes more widespread, however, similar strategies are likely to emerge in other industries. We expect that deeper AI integration will boost profitability over time, but it could also heighten the risk of labor pushback. That dynamic could turn AI into an increasingly salient political issue, introducing additional volatility for the sector in the period ahead.

Takeover of Spirit? Discussions between the federal government and struggling airline Spirit over a potential bailout have intensified, as the White House has entertained the possibility of a takeover. The move comes as the airline industry is showing strain due to the impact that higher energy prices, driven by the ongoing conflict, are having on certain businesses. The White House’s decision to intervene is a reminder of the government’s increasingly interventionist approach as it looks to shield the economy from external shocks.

• The government had initially been weighing a roughly $500 million loan package in exchange for warrants that would give it an equity stake in the airline. However, as Spirit edges closer to potential liquidation, the administration has shifted its stance. On Thursday, the president indicated that any rescue could involve the government purchasing the company outright and selling it once jet fuel prices retreat.

• While Spirit Airlines’ latest bankruptcy is its second in less than a year, it comes at a time when the broader industry is under mounting pressure from rising fuel costs. The strain is especially severe for low-cost carriers, which have limited room to absorb higher input costs, forcing them to raise fares and cut flights as margins are squeezed. Major carriers such as American Airlines, Alaska Airlines, and United Airlines have all reported dimmer earnings outlooks due to higher jet fuel prices.
• That said, there is still little evidence that other industries outside of airlines are facing the same degree of strain. However, the situation could worsen if shortages become more widespread and companies are forced to scale back production in response to rising costs. At the same time, the federal government’s talks over a potential Spirit takeover suggest that the White House is increasingly willing to intervene when it believes sector-specific stress could spill over into the broader economy.

Iran Update: The White House announced that Israel and Lebanon have extended their ceasefire agreement by three weeks, while Iran has said it will send representatives to Pakistan for discussions, though the United States has yet to confirm its participation. These developments suggest there is little appetite for a return to full-scale hostilities, even as each side seeks to preserve leverage at the negotiating table. In our view, markets should remain relatively calm so long as the ceasefire holds and active fighting does not resume.

Beijing Says No: Chinese regulators are moving to curb US investment in certain domestic private firms by tightening approval requirements. Authorities have instructed companies considering funding from American investors to obtain government approval before proceeding with any deals. The shift follows Meta’s unreported acquisition of Manus, which has prompted a regulatory probe in China, and reflects Beijing’s efforts to limit US capital flows into businesses that it deems sensitive to national security.

Redistricting Fight: Florida may be positioning itself to redraw its congressional map in a way that further favors Republicans. The move follows similar efforts in Virginia earlier this week and builds on Texas’s push to reshape its electoral map. While these changes are often framed as attempts to influence the balance of power in the upcoming November elections, they could also carry significant implications for the 2028 cycle. Even so, in our view, Democrats remain strongly favored to retake the House in the midterms.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with a discussion of the recent chipmaker market rally. We then assess the dollar’s reserve‑currency status in light of its increased usage following the conflict in Iran. Next, we examine the US bailout of Spirit Airlines, Washington’s growing reliance on dollar swap lines to avert forced asset sales abroad, and SoftBank’s expanding investment in AI. As always, we include an overview of recent domestic and international economic data.

 AI Leads Market: Chipmakers continue to outperform the broader market, driven by sustained demand for AI-related technologies. The semiconductor sector has now recorded its longest consecutive winning streak in history, reaching 16 straight days of gains. This rally has been fueled by investors increasingly looking past the conflict in Iran and refocusing on core market themes, with growing confidence that the worst of the geopolitical disruption has passed. This run highlights the market’s heavy reliance on AI-related companies to maintain positive momentum.

• Much of this strong performance is being driven by the AI boom, which has fueled a surge in demand for memory chips that continues to outpace supply. This imbalance reflects a broader acceleration in capital spending, as major technology companies invest heavily in cloud infrastructure to support AI model training. Industry leaders — including Texas Instruments, Nvidia, Broadcom, and Micron — have reported robust earnings, underscoring their critical role in supplying chips to data centers.
• The strength has also extended overseas, with several countries benefiting from increased exports as they expand their AI infrastructure. Southeast Asian economies, in particular, have seen gains, supported by strong performances from key players such as TSMC and SK Hynix — the latter reporting the fastest earnings growth in its history. Meanwhile, Chinese chipmakers SMIC and Hua Hong posted record results, and European semiconductor equipment leader ASML also delivered a strong quarter.
• However, despite the strong earnings, much of this performance predates the recent disruption to global supply chains stemming from the conflict in Iran. The closure of the Strait of Hormuz has made key inputs more difficult to secure for chipmakers seeking to expand production to meet rising demand. While attention has largely focused on oil markets, constrained helium flows also pose a significant risk to semiconductor supply chains.
• While US companies may be relatively insulated due to domestic helium production, international firms are more exposed to supply disruptions. This is particularly true for Asian economies, which rely heavily on Qatar for helium supply. QatarEnergy, a major global provider, sustained damage during the Iranian drone attacks, further constraining availability. Transportation also presents challenges, as helium can warm and boil off during extended transit, limiting the effectiveness of rerouting supply.
• The recent winning streak for chipmakers is an encouraging signal for market fundamentals, but it also suggests that investors may already be looking past the war in Iran, potentially prematurely. While both sides currently appear reluctant to return to full-scale fighting, the conflict’s supply-chain risks have yet to fully filter through to markets. Against this backdrop, we think adding selectively to value exposures remains sensible for investors prioritizing capital preservation.

Dollar’s Global Role: Since the conflict in Iran began, the dollar’s usage has risen to historic levels, according to SWIFT data. The international clearing network reports that the dollar accounted for 51.1% of global transactions — the highest share since SWIFT revised its data methodology. At face value, this suggests the dollar’s dominance remains largely intact as it shows that countries are still relying on the greenback to make international transactions. However, we believe underlying shifts may be occurring.

• The dollar remained the dominant reserve currency in 2025, but its long‑term role is being widely debated as policy uncertainty, rising fiscal deficits, and shifting trade and tariff strategies are leading investors to reassess their exposure to dollar‑denominated assets. At the same time, political and economic pressures have raised questions about the Federal Reserve’s ability to maintain a sufficiently hawkish stance to contain inflation risk, reinforcing concerns about the dollar’s future appeal.
• Keep in mind, changes in reserve‑currency status typically unfold over decades and in distinct phases rather than overnight. After World War I, it was increasingly clear that sterling was losing ground as the leading reserve currency, as Britain’s heavy war debts and reduced ability to supply global liquidity constrained its role. Yet, it took the post–World War II Bretton Woods order and episodes such as the Suez Crisis to solidify the dollar’s position at the core of the system and relegate sterling to a secondary status.
• The recent increase in dollar usage reinforces the depth of its reserve currency status. Despite growing headwinds, many countries have raised the share of their transactions conducted in dollars — a clear sign that the greenback remains one of the world’s most trusted currencies. While the dollar’s elevated usage during the Iran conflict might be viewed as cementing its reserve status, it more likely reflects that no credible rival has yet emerged, leaving the dollar as the default reserve currency for now.
• That said, we expect the erosion of the dollar’s reserve currency status to be a long, gradual process, likely marked by periodic setbacks. This means that many countries will probably continue holding dollars as they wait for an alternative currency to emerge. In the meantime, the lack of a viable competitor will likely lead central banks to prioritize gold purchases as their primary means of diversifying away from currency holdings.

Trump Airways? The Trump administration is in advanced talks to take over struggling airline Spirit. The deal would include the federal government paying $500 million for a stake in the company. Spirit has struggled to remain profitable since the COVID-19 pandemic, and ongoing geopolitical tensions have made matters worse due to rising jet fuel prices. The move is another reminder of the government’s growing role in the economy.

US Swap Lines: US Treasury Secretary Scott Bessent has indicated that a growing number of Gulf countries are seeking dollar swap lines to help maintain dollar liquidity. The access would allow those countries to secure dollars without resorting to panic selling of dollar-denominated assets. More broadly, this would mark yet another instance in which the current administration has considered or deployed measures affecting currency markets, alongside earlier discussions around Japan’s FX challenges and the establishment of a swap line with Argentina.

Softbank Loan: The multinational conglomerate is seeking a two-year, $10 billion margin loan backed by its stake in OpenAI. The facility reportedly includes an option to extend for an additional year, giving the company more flexibility in managing its leverage profile. The move underscores how aggressively SoftBank is leaning into the AI boom, using its OpenAI holdings to lower borrowing costs and monetize a highly valued, still-private and not-yet-profitable AI model provider.

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