The week the inflation thesis came back. PPI April detonated at +1.4% MoM (largest since March 2022), YoY +6.0% (hottest since December 2022). Core CPI re-accelerated to +0.4% MoM. Kevin Warsh was confirmed as the 17th Fed chair on a 54-45 Senate vote, the narrowest margin in modern Fed history. Powell handed off May 15 and stays on as governor. Markets re-priced cuts out: 10-year yield +14bps to 4.59% on confirmation day, 30-year above 5.1%, DXY cleared 99 for the first time in five weeks. Gold gave back $182. Crypto cracked: BTC down 6%, ETH down 10%, SOL down 12% as ETF flows turned to roughly $1B in net outflows. The MSV Haji Ali sank near Oman after a drone strike. Saudi and Kuwait lifted restrictions on US airspace Sunday, clearing the path for Project Freedom Plus. SPR drained another 8.6mb to roughly 384mb.
Calibration note: The lesson from this scorecard: legislative catalysts (CLARITY) and political milestones (Warsh confirmation) do not override hot macro data when both hit the same week. CPI was correctly flagged as the pivot. Everything downstream of it was less important than we made it. Weight macro releases higher than narrative milestones in future trigger sets.
Resumed grind higher
Copper fade off $6.64 high
Friday yield surge
Largest weekly jump of crisis
This week's defining variable: Project Freedom Plus restart timing. Saudi and Kuwait have cleared US airspace and basing. The launch could come this week. If a clean convoy gets through with no kinetic engagement, Brent gives back $5-8. If it triggers IRGC retaliation, Goldman's $125-145 path reactivates. Either way, the next ten days resolve the May trading range that the 48-hour war opened.
| Material | Price | WoW | 8-Week | Note |
|---|---|---|---|---|
| WTI Crude | ~$102.59/bbl | +5.3% | +50% | Peak $105.42 May 15 on Trump "losing patience." |
| Brent Crude | ~$110.64/bbl | +6.7% | +60% | Holding above $110. June futures touched $119.94 May 1. |
| Diesel | ~$5.50/gal | +2% | +42% | Crack spreads widened with crude. EST |
| Gasoline | ~$4.45/gal | +2% | +43% | Retail Sales gas +2.8% MoM Apr. EST |
| Natural Gas | ~$3.04/MMBtu | +4.3% | −4% | Above $3 for first time in two weeks. |
| Gold | ~$4,560.9/oz | −3.8% | −7% | Gave back W20 bounce. Hot CPI/PPI + DXY 99. |
| Copper (COMEX) | ~$6.32/lb | −2.6% | +29% | Intraweek high $6.64. Faded into FOMC repricing. |
| Aluminum | ~$2.50/lb | flat | +33% | Tariff anchor unchanged. EST |
| Steel (CRC) | ~$1,150/s.ton | flat | +105% | Tariff + tight supply. EST |
| Dollar (DXY) | ~99.02 | +1.1% | −8% | Cleared 99 first time in 5 weeks. Peak 99.27 May 15. |
| Mex. Peso | ~17.55/USD | −0.9% | +0.5% | Pressured by DXY. EST |
| British Pound | ~$1.336 | −1.3% | +4% | Below $1.34 on Friday yield surge. |
| Euro | ~$1.165 | −0.9% | +2% | Through $1.17 support intraweek. |
| Container Freight | $2,553/40ft | +12% | +12% | Drewry WCI May 14. Largest weekly jump of crisis. |
| Intra-Asia (IACI) | $918/40ft EST | flat | +66% | Holding the W19-W20 plateau. |
| Trucking (van) | ~$2.68/mile | flat | +30% YoY | DAT April baseline. MEDIUM |
| Bitcoin | ~$76,599 | −5.8% | +14% | May 17 close. ETF flows -$1B net for week. |
| Ethereum | ~$2,104 | −9.8% | +5% | Cracked $2,200 support on hot inflation. |
| Solana | ~$84.47 | −12.2% | −1% | Worst of majors. Round-tripped W20 +11% gain. |
Sources: Yahoo Finance (intraday May 18), Drewry WCI (May 14), DAT April Trendlines, EIA WPSR May 13, BLS CPI/PPI, Census Retail, Fed G.17, banking.senate.gov, federalreserve.gov, CoinDesk. WoW = May 18 close vs W20-published May 11 baseline.
The cleanest re-hawkening tape of the crisis. Hot PPI and CPI rewrote the macro picture inside two sessions. The dollar reclaimed 99 for the first time in five weeks, yields ripped to 4.59% on the 10-year, and the W20 "Fed-speak failing to lift dollar" thesis snapped. Gold gave back almost all of the W20 bounce. Crypto sold off across the board despite a clean CLARITY Act markup. Oil resumed grinding higher on the structural supply story plus Trump's "losing patience" rhetoric and Saudi/Kuwait airspace restoration.
The week in one trade: hot inflation data brought back the rate-differential dollar bid that broke in W20. DXY +1.1%, gold -3.8%, crypto -6% to -12%. Oil and Drewry are the exceptions because the supply story is its own driver. The reflexive trade now: any soft data print next week unwinds DXY, bids gold and crypto, leaves oil alone.
The week. Monday: Trump dismissed Iran's May 10 counter-proposal as "TOTALLY UNACCEPTABLE"; Iran's FM Araghchi: Tehran will "never bow." Tuesday: oil rallied ahead of Trump's China trip. Wednesday May 13: MSV Haji Ali (Indian-flagged livestock vessel) struck by suspected drone/missile near Limah, Oman ~03:30 local; the vessel sank, all 14 crew rescued by Omani Coast Guard. UAE labeled it a "terrorist attack." EIA print: SPR -8.6mb. Thursday May 14: UKMTO reported a vessel seized by "unauthorized personnel" 38nm NE of Fujairah, bound for Iranian waters; a second ship was attacked/sunk same day. Friday May 15: Trump-Xi Beijing summit ended. Xi committed no military aid to Iran but kept buying Iranian crude. Both agreed Hormuz "must remain open." Trump told Fox he is "losing patience." Brent +3% to $109.26. Saturday: Iranian state media said 30+ ships cleared overnight after paying PGSA. Sunday May 17: Saudi and Kuwait lifted US airspace/basing restrictions (Defense News).
Goldman scenarios as of W19 still active: base $100 April-May, adverse $125 July, worst $145 May/$120 Q4. No fresh May 11-17 revision found. The SPR runway compression plus the OPEC -30% confirmation plus PGSA toll formalization all tilt the distribution toward the adverse case. Project Freedom Plus restart will tell the next chapter. The procurement-side read: prepare for $110-120 Brent as base case through summer, with $90 only on a real Trump-Iran framework deal.
Copper tagged $6.64 intraweek (fresh cycle high), then faded to $6.32 on the Friday yield surge. The W20 break-and-reclaim of $6 is intact, but the speculative bid that powered the early-week ramp got squeezed by the same DXY move that hit gold. The China demand story remains the unspoken pillar: if Trump-Xi Beijing summit yielded any informal commodity-flow language, copper holds the bid; if not, $6 is the next test.
Steel CRC and aluminum remain anchored at ~$1,150/short ton and ~$2.50/lb all-in. The 50% Section 232 regime continues to set the floor. Empire State Manufacturing May print of 19.6 (vs 7.8 expected) with accelerating prices paid/received confirms regional industrial demand is hot and inflationary, supporting both materials.
The bear-steepener. Friday's yield curve action was the cleanest signal of the week. 2y +9bps, 10y +14bps, 30y broke through 5.1% (highest in roughly a year). This is opposite the "Warsh = QT pause + cuts" steepener that was supposed to be the post-confirmation trade. Sticky inflation has inverted the call: more rates, more term-premium, more dollar. Goldman flipped to "no major balance-sheet shrinkage" under Warsh but kept the December first-cut call. JPM stayed full-hawkish at hike Q3 2027.
FX cross-rates. Pound below $1.34 (-1.3% WoW), Euro through $1.17 (-0.9%), Peso to 17.55 (-0.9%). The carry-trade beneficiary is JPY, which weakened past 161 intraweek. The W20 "halve and hold" treasury action call paid: if you closed half then and the rest into Friday's DXY 99.27, you exited near the high. For US importers, the next two weeks need a fresh hedge build at DXY 98-99 if the inflation tape holds.
Trucking: DAT April baseline holds (van $2.68/mile, reefer $3.12, flatbed $3.46). The Retail Sales gas component +2.8% MoM April confirms diesel surcharges are still rising through the truckload contract layer. Auto sales softening from W19's Cox forecast continues. UMich preliminary 48.2 record-low sentiment is the leading consumer indicator that ground freight demand has more downside through Q3.
The decoupling. Circle (CRCL) and Coinbase (COIN) equities held the legislative tailwind: CRCL closed +19.9% on the compromise rollout window, COIN +6.1%. Spot crypto did the opposite. BTC bled from $80,477 May 11 to $76,599 May 17 (-5.8% WoW). ETH worse at -9.8% to $2,104, cracking $2,200 support. SOL worst at -12.2% to $84.47, round-tripping its W20 +11% gain. The mechanism: ETF outflows ($1B net for week, May 13 single-day -$635M largest since January) plus the hot CPI/PPI re-rating real yields higher. Stablecoin issuers as financial-rail compounders (the equity bid) survived; the speculative crypto bid did not.
What to watch. The CLARITY Act now moves to a Senate Ag committee merge, then full floor with a 60-vote threshold. The White House July 4 target requires 7+ additional Democratic floor votes beyond Gallego/Alsobrooks. Until then, crypto is back to trading the macro (cuts pricing, ETF flows) rather than the legislative tailwind. If the May 22 UMich final softens sentiment further and the June 6 jobs print misses, the cut path re-opens and the crypto bid returns. If not, BTC tests $74K and the rotation we flagged in W19/W20 stays dead.
If/then logic for the moves that matter. Trigger the action, not the headline.
Concrete moves for procurement, treasury, and supply-chain teams given the W21 setup.
View the live Hormuz tracker → Real-time vessel traffic, crisis metrics, and full timeline.
- Saudi/Kuwait airspace and basing restored Sunday (Defense News). Biggest GCC-US re-alignment since the W20 Saudi-airspace-denial. Project Freedom Plus launch path is clear
- Haji Ali sinking + Fujairah seizure bracket the week. Iran did not claim either; UAE called Haji Ali "terrorist attack"; trajectory remains kinetic-pause-but-incidents
- PGSA tolls formalized at ~$2M per transit in yuan or rial. Iran institutionalizing a coercive transit regime that US, EU, GCC reject as illegal
- Trump-Xi Beijing summit: Xi commits no military aid but won't stop buying Iranian crude. Joint Hormuz language is symbolic-not-enforceable
- PPI +6.0% YoY, hottest since Dec 2022. Core PPI +1.0% MoM, services +1.2%, intermediate +11.1% YoY. Pipeline is hot
- Retail Sales soft under the gas surge. Furniture -2.0%, auto dealers -0.5%, dept stores -3.2%, clothing -1.5%. Real volumes flat. Demand-side breaking quietly
- OPEC: Hormuz closure cut output ~30%. Cross-confirms Aramco's billion-barrel framing. Supply hole is structural
- SPR at ~384mb. Operational-utility threshold near ~350mb (working estimate) is within Q3 reach. Treasury cap has finite runway
- WCI +12% WoW on EFS/PSS/PGSA stacking. Container goods CPI pressure now locked in through summer