Key Takeaways
- St. Louis Fed President Alberto Musalem signaled support for Kevin Warsh, expecting a continued commitment to the dual mandate while forecasting 2%+ GDP growth.
- Gilead Sciences (GILD) reported successful Phase 3 results for its novel HIV single-tablet regimen, maintaining viral suppression with no new safety concerns.
- President Donald Trump and Ukrainian President Volodymyr Zelenskiy concluded a high-stakes phone call as diplomatic efforts intensify.
- The U.S. Department of Commerce is convening with domestic robot manufacturers to strategize against growing industrial competition from China.
- CME Group announced a mid-day reopening for Natural Gas futures at 12:50 CT following a schedule adjustment that cancelled all active day orders.
Federal Reserve Outlook and the Warsh Transition
St. Louis Fed President Alberto Musalem addressed the upcoming leadership transition at the central bank, stating he looks forward to hearing the priorities of Kevin Warsh, President Trump’s nominee for Fed Chair. Musalem expressed confidence that the Federal Reserve's commitment to its dual mandate—stable prices and maximum employment—will remain a cornerstone under the new leadership. He described current monetary policy as neutral in real terms, suggesting that the central bank is effectively balancing risks to the economy.
Musalem provided a detailed economic forecast, projecting that the U.S. economy will grow at or above 2% even as the labor market undergoes an orderly cooling. He expects the unemployment rate to stabilize between 4.3% and 4.4%, though he noted that higher layoffs remain a possibility, albeit not his base case. Regarding inflation, Musalem noted that the PCE index currently serves as a more reliable gauge than the CPI, which may have been artificially depressed through April due to a recent government shutdown.
The Fed official emphasized the need to "finish the job" on inflation, which remains nearly 1 percentage point above the 2% target. Musalem attributed a portion of recent price pressures to tariffs, but he expects half of that excess inflation to fade over time. He noted that achieving the inflation target would likely support long-term consumption and growth, potentially leading to a decline in the 10-year Treasury yield.
Geopolitics and Industrial Strategy
On the diplomatic front, Ukrainian President Volodymyr Zelenskiy held a phone call with President Donald Trump on Wednesday. According to a senior advisor, the call has concluded, though specific details regarding the discussion were not immediately released. The conversation follows a period of heightened tension and previous discussions regarding ceasefires and military aid as the administration seeks a resolution to the conflict.
Simultaneously, the U.S. Government is ramping up its focus on domestic technology. Semafor reported that the Department of Commerce is meeting with American robot makers to discuss the intensifying competition from China. The meeting aims to bolster the domestic robotics industry, which has recently called for a national strategy to compete with Chinese manufacturers who currently lead the world in industrial robot operations.
Corporate Developments: Gilead and CME Group
In the healthcare sector, Gilead Sciences (GILD) announced positive findings from its ARTISTRY-2 Phase 3 trial. The study demonstrated that a novel single-tablet regimen combining bictegravir and lenacapavir successfully maintained HIV suppression in virologically suppressed adults. The regimen was found to be non-inferior to current standard therapies and was generally well tolerated, marking a significant milestone for the company’s long-acting HIV portfolio.
In market operations, CME Group issued a notice regarding its Globex Natural Gas futures and options. Trading is scheduled to pre-open at 12:45 CT and officially open at 12:50 CT. While all acknowledged Good 'Til Cancelled (GTC) orders will remain active, the exchange confirmed that all Day orders and today’s Good 'Til Date (GTD) orders will be cancelled, requiring traders to re-enter their positions for the afternoon session.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.