A steep rise in global energy prices has begun to be reflected in inflation data for March, which has now been reported by most of the world’s major economies, including the US and euro area, Fitch Ratings says.

Prices rose by an average of 0.8% month on month in the major developed economies where data is available, the steepest monthly rise since 2022. The average rise in the annual rate of inflation across all markets was 0.3pp, with the shock yet to work its way through fully to consumer prices. But there was plenty of variation, as fuel price controls in some countries dampened the rise in consumer prices

By contrast, government bond yields have risen across the board, as market participants priced in a possible fiscal and monetary response as well as higher inflation. The rise in US 10-year government yields has been fairly muted. (Fitch – Continue Reading)

Many highly indebted advanced economies face a grim fiscal outlook. Under current policies, the public debt ratios of countries including Belgium, France, the United Kingdom, and the United States are set to deteriorate over the next two decades. They still have room to borrow, but there are limits.

So far, financial markets have been forgiving. But recent tremors suggest that they may become more sensitive to negative news about the fiscal or economic outlook. They may demand higher interest rates even from countries with highly liquid government bond markets, making the job of reducing debt that much harder.

AI-driven productivity growth may slow the increase in debt ratios and reduce the needed adjustment. But the magnitude and timing of this effect are unclear. Population aging and growth declines linked to trade fragmentation and political uncertainty pull in the opposite direction. (IMF – Continue Reading)

BlackRock Inc. CEO Larry Fink said institutional demand for private credit is accelerating, even as retail investors pull back from the asset class amid rising concerns over risk and liquidity.

“If anything, with some of the retail pullback, we’ve seen stronger institutional fundraising, stronger institutional deployment. Some of the spreads that we see today in direct lending and asset-based finance are some of the most attractive on this market pullback,” Fink said on a call with analysts after BlackRock reported its first-quarter results. (StockTwits – Continue Reading)

The limited release of Anthropic’s new Mythos model is putting Washington officials on high alert after the AI firm’s warning about the model’s security risks sent shockwaves through and sparked debate in the tech industry.

Within days of being informed of Anthropic’s new technology, the White House ratcheted up a multipronged response involving Trump administration leaders across agencies to evaluate just how powerful AI is becoming.

Anthropic’s announcement follows years of AI warnings, but last week it seemingly landed differently, upping pressure on Washington to stay ahead even as some question the extent of the latest threat. (Hill – Continue Reading)