Finance

Executive summary

Global oil flows through the Strait of Hormuz remain a fraction of normal, and leading international bodies warn inventories are draining into peak summer demand—sustaining an energy-driven inflation impulse that weakens the growth outlook. Fed officials are signaling greater willingness to tighten if core inflation broadens, with markets assigning a non-trivial probability of a 2026 hike. Beijing is accelerating e‑CNY deployment at home and across mBridge rails, offering non‑dollar settlement options that could gain traction in BRI and sanction‑exposed trade. Rising private‑credit defaults—dominated by distressed exchanges—and sizable insurer exposure increase the risk that tighter policy transmits through opaque credit channels.