Rising inflation and shifting Federal Reserve monetary policy expectations

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Macro narratives split sharply: inflation moderated marginally in some readings but stayed above the Fed's target, while the Fed maintained its pause despite external rate hikes. BAM and CG report head inflation at 3.5-3.7% with no rate cuts expected within five years, while ALTI notes a Q2 market rebound after Q1 volatility. INSW and HPK report dramatic commodity supply destruction from Hormuz closures driving price spikes, and APO added emerging AI-driven credit stresses. The consensus shifted from 'potential soft landing' to 'persistent inflation with episodic geopolitical supply shocks.'

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