BofA — Michael Hartnett, Flow Show BIGGEST BUBBLE SINCE THE RAILROADS

Hartnett Flips Bearish on the AI Tape But Names Two Conditions to Wait For Before Selling

BofA CIO Michael Hartnett’s Friday Flow Show formalises a reversal: a year ago he resisted the dotcom-comparison crowd and was vindicated; now he’s joined them, calling the AI buildout “the biggest bubble since the railroads.” Crucially he is NOT pulling the sell trigger yet, naming two specific conditions to wait for before fading: completion of the marquee SpaceX / OpenAI / Anthropic listings (which would push the AI “Big 10” share of the S&P 500 to ~47–48% of market cap) and CPI climbing into the 4–5% zone forcing the Fed back into tightening. The note remains the most-circulated institutional bubble call on desks this morning — with Walter Deemer separately posting a 100-year-old chart of the RCA boom-bust the same morning, the technical/positioning crowd is putting the bubble framing on the same calendar page.

Goldman Sachs — Prime Brokerage Flow HFs DOUBLING DOWN ON AI

Hedge Funds Doubling Down on AI Infrastructure, Dumping Software — The Memory Super-Cycle Rotation

A Goldman Sachs prime-brokerage flow note (captured by CNBC) reports hedge funds are “doubling down” on AI infrastructure plays even as they dump software stocks — precisely the rotation visible in the overnight tape. Memory and silicon names are running hard (Micron +19.3%, AMD +7.8%, Sandisk +7.5%, Western Digital +8.3%, ARM +4.8%) while the software complex is flat-to-soft (IGV +0.04%, ServiceNow −2.2%, Salesforce −0.6%). The split sets up software as the contested asset class for the next session — CNBC’s morning lineup includes a piece arguing the “new bull market in software stocks hinges on this report.”

JPMorgan — US Equity Strategy DEFENSIVE ROTATION

“Time to Buy Unloved Safe Stocks That Pay Dividends” — A Counter-Cyclical Call Into PCE

JPMorgan strategists publish a defensive-rotation call: time to buy “unloved safe stocks that pay dividends.” The note sits in tension with Goldman’s pro-AI flow read — classic sell-side spread between the desks. JPM goes defensive into Thursday’s PCE; Goldman stays risk-on in tech. The JPM-named dividend basket has not yet shown up in the pre-market tape (XLP −1.4%, XLV −0.9% as risk-on dominates the open), but the call is a useful read on which desks are reaching for the protection trade ahead of the print.

Barclays — Equity Research SANDISK CAN RIP MORE

Sandisk Up 4,000% Over the Past Year as Memory Super-Cycle Accelerates — Barclays Says It Could Rise Even More

A Barclays analyst note timestamped just before the cash open says Sandisk (SNDK) — up 4,000% over the past year as the memory super-cycle accelerates — could rise even further. The pre-market confirms the enthusiasm: SNDK +7.5% to $1,589.55 (+$110.87). The note dovetails with the Goldman hedge-fund flow (“doubling down on AI”) and is the cleanest expression of the sell-side conviction in memory infrastructure even as the macro-strategy desks (Hartnett, Rosenberg) warn of bubble dynamics. The internal sell-side split — macro-strategists bearish, equity-research desks bullish — is the structural feature of today’s tape.

Piper Sandler — Energy Strategy HORMUZ CLOSED FOR MONTHS

Piper Pushes Back on the De-Escalation Rally — Strait of Hormuz to Stay Closed for Months and Oil to Hit New Highs

Piper Sandler’s energy desk pushes back hard against the de-escalation rally: the Strait of Hormuz will remain closed for months and oil will hit new highs from here. The call sits in direct tension with the overnight tape (WTI −3.8% to $90.32, Brent −2.9% to $93.85, XLE −2.8%) and offers an explicit counter-trade entry for desks who think today’s energy unwind is fade-able into the open. Dallas Fed President Lorie Logan reinforced the supply-side framing on the @DeItaone tape this morning — about 20% of global oil and LNG flow went through Hormuz pre-war, and the world may need to cut consumption if shipping does not normalise. If Piper is right and Logan’s warning lands in the data, today’s energy print is a buy.

ZeroHedge — Tyler Durden AI = 75% OF Q1 GDP

Will $800 Billion in AI Capex Boost US GDP? — The Surprising Math That Leads to Disappointment

A morning ZeroHedge analysis pulls the most-cited BEA stat of the month back into focus heading into tomorrow’s GDP second estimate. Of the +2.0% Q1 GDP growth print, non-residential fixed investment delivered about three-quarters — 1.38 percentage points — and within that, Software (+0.7 ppt) plus Nonresidential Equipment (+0.88 ppt), both AI-driven, accounted for roughly 1.5 ppt of GDP growth. The piece argues the next $800 billion of announced AI capex faces “surprising math” that leads to disappointment in GDP-multiplier terms — meaning the AI-narrative trade is now structurally large enough that any deceleration in capex pace becomes a tape-moving macro event. Direct tail-risk into tomorrow’s GDP second estimate.

The Kobeissi Letter 2025 +30.7% vs SPX +16.4%

Standing performance frame as last republished — carried as recurring context.

Kobeissi Letter Cumulative +516% Since 2020 — The High-Conviction Macro Voice Stays Long Risk

Kobeissi’s pinned performance frame on X documents a 2025 net return of +30.7% versus the S&P 500’s +16.4%, and a cumulative +516.3% since 2020. The framing matters for today’s macro narrative because the Kobeissi Letter is the high-conviction macro-trade voice for the retail X audience — and his bias has remained bullish risk through the Iran shock, the rate spike and the Hartnett bubble call. Pair this with this morning’s flagging that Micron added another six percent overnight and the South Korean stock market hit a fresh all-time high (now +100% YTD) to see where his macro tape is.

Charlie Bilello 19 ATHs YTD

State-of-the-Markets framing last published May 21, 2026.

S&P 500 at its 19th All-Time High of 2026 — The Chart-Book Bull Counter to the Bubble Camp

Charlie Bilello’s late-Tuesday post marks the S&P 500’s 19th all-time high of 2026 — a count he uses to push back against tactical top-callers and the explicit counter-stat to Hartnett’s “biggest bubble since the railroads” framing. His May 21 State-of-the-Markets video remains the working chart-book covering stocks, bonds, real estate, commodities, currencies and crypto. Coming into a holiday-shortened week ahead of the PCE / GDP marquee, the running ATH tally is the most-cited bull stat in chartbooks alongside the AI-capex story.

Lance Roberts — Real Investment Advice (X Live) LIVE SKEPTIC VOICE

RIA Live Q&A Today — Real-Time Sentiment Counterpoint to the Futures Bid

Lance Roberts is hosting an X Live broadcast this morning titled “5-27-26 Q&A Wednesday: Real Advisors, Real Answers” with 255+ live listeners at the 7 AM ET read. Roberts has been a persistent skeptic of the AI-driven melt-up; the live Q&A is the real-time read on the bearish/balanced advisor camp on a day when Hartnett (BofA) just called the biggest bubble since the railroads. Pair with his separate written piece this morning arguing the bond market is over-pricing inflation — 5-year nominal yields up ~70bp since the war started while 5-year breakevens are only up ~15bp, leaving the real-yield jump as the dominant driver and a likely candidate for compression as oil falls.

CNN Fear & Greed — Component Breakdown MOMENTUM EXTREME / BREADTH FEAR

Momentum and Safe-Haven Demand in “Extreme Greed” While Stock-Price Strength and Breadth Sit in “Fear”

The trend-structure read from CNN F&G’s seven components (last updated 6:47 AM ET today): Market Momentum is at EXTREME GREED (S&P above its 125-day moving average), Put/Call Options EXTREME GREED, Safe-Haven Demand EXTREME GREED (stocks outperforming bonds over 20 days). The counterweights: Stock Price Strength sits in FEAR, Stock Price Breadth in FEAR (the McClellan Volume Summation is weak), and Junk Bond Demand in FEAR; Market Volatility is NEUTRAL. The split — index-momentum extreme but the breadth-based components weak — is the classic late-cycle narrowing structure the technical desks keep flagging.

Todd Gordon — CNBC SOLID GROUND

Todd Gordon Reads the Technical Tape as Stocks on “Solid Ground”

Todd Gordon (CNBC) reads the technical tape as stocks being “on solid ground.” The frame aligns with the momentum-positive components of CNN F&G and the persistent bid in MTUM (+3.4%) and SPHB (+2.8%) overnight. The constructive read sits against the breadth-based caution Krinsky and the CNN F&G internals have been flagging — the duelling technical view that defines the tape into the Conference Board / PCE setup.

CNN Fear & Greed Index

Composite at 61 — In “Greed” with a Familiar Split Between Momentum and Breadth

CNN F&G’s composite reads 61 (“Greed”) as of the 6:47 AM ET update, with the same internal split the briefing has been flagging for weeks. Market Momentum, Put/Call Options and Safe-Haven Demand are in Extreme Greed; Stock Price Strength, Stock Price Breadth and Junk Bond Demand are in Fear; Market Volatility is Neutral. The composite reads “investors are comfortable”; the breadth internals say the comfort rests on a narrow base — the same caution the technical desks (Krinsky, Newton) keep flagging. The four-vs-three split is the structural setup heading into PCE.

NAAIM Exposure Index HEAVY LONG

Active-Manager Exposure at 82.02 — Long Positioning Holds Into the Print

The NAAIM Exposure Index reads 82.02 on the latest release — well above neutral and signalling the active-manager cohort is holding heavy long positioning into Thursday’s PCE. The reading pairs with Goldman’s “hedge funds doubling down on AI” flow note and the Kobeissi pinned-performance frame: the systematic and discretionary cohorts are positioned for upside, not preparing for a correction. The flip side is the AAII bullish print sitting below the 37.5% historical average for the first time in five weeks — the retail and pro cohorts are skewed in opposite directions.

BlackRock Investment Institute — Weekly Commentary DIVERSIFY DIVERSIFIERS

The Need to Diversify Diversifiers — The Old 60/40 Hedges Are Broken

BII says traditional 60/40 hedges are broken: since the Mideast conflict began, the S&P 500 is up 8%, Brent crude is up 43%, US 10-year yields are up about 60 basis points, and gold has slid 15% on crowded positioning. The team upgrades hedge funds (macro / absolute return) and private markets (infrastructure equity, AI-linked private credit) as new diversifiers. They prefer short and medium-term US Treasuries over long bonds because the term premium is rising back near 12-year highs on ACM-model estimates. On a tactical horizon BII stays pro-risk on AI mega-force earnings strength, with overweight US equities, overweight EM equities, neutral Japan and China, and an overweight to AI infrastructure / semis / power / data centres.

Real Investment Advice — Lance Roberts REAL-YIELD MISPRICE

Inflation Expectations and Real Yields Are Telling Different Stories — Real Yields Set to Compress

RIA argues the bond market is over-pricing inflation: since the Iran war began the 5-year UST yield is up about 70 basis points while 5-year breakevens are up only about 15 basis points — meaning roughly 55bp of the move is a real-yield jump driven by recency bias. March and April CPI ran 0.86% and 0.64% month over month, but RIA expects the term premium to compress as oil falls. The same morning note flags an eight-week S&P 500 winning streak, the 13th such since 1965 (once every 4.2 years): short-term return averages −0.4% but the 52-week forward return averages +9.5% with 92% (11 of 12) of prior instances positive. Bull bias intact with the upside levels 7,517 → 7,600 → 7,650 and downside markers at the 20-day moving average and below.

Raymond James — Larry Adam, CIO FUNDAMENTALS STRONG

Last published Weekly Headings May 22, 2026 — carryover.

Despite Iran, Oil and Inflation Headwinds, US Corporate Fundamentals Remain Supportive of Equities

Larry Adam’s latest Weekly Headings argues that despite the Iran / oil / inflation crosswinds, US corporate fundamentals stay supportive of equities. The piece sits alongside Adam’s May 20 video on the firm’s updated year-end S&P 500 target (three drivers cited). Raymond James’ fixed-income desk (Doug Drabik, May 18) flags that inflation is persisting just as the Powell-era Fed Chair term expires, complicating duration calls; Drew O’Neil (May 4) keeps building a “start-with-why” bond-ladder framework for clients. The May 1 Adam piece (“Strong fundamentals poised to offset oil price headwinds”) sets the through-line for the firm’s constructive bias.

Northern Trust Wealth Management BUBBLE “NOT READY TO POP”

Last published May 22, 2026 — carryover.

Memo From the Middle East — In-Person Client Meetings Suggest “Surprising Positivity Regarding US Risk”

Northern Trust’s wealth-management note from the May 22 publication cycle cites in-person Middle East client meetings showing “surprising positivity regarding US risk” and characterises the current AI / equity backdrop as “a bubble not ready to pop” — a marginally constructive bias against Hartnett’s “biggest bubble since the railroads” framing this week. Companion pieces from the same publication date frame UK gilts as “Gilt-y As Charged” (paying a political-risk premium) and review accelerating US bank deregulation. Earlier in the month Ryan Boyle’s “Oil Prices Spill Over” warned petroleum products faced disruption, and Vaibhav Tandon’s “Taiwan’s Geoeconomic Weight” reinforced the semi supply-chain concentration risk feeding into today’s memory-cycle tape.

CNBC World — Pre-Markets Wrap MICRON $1T / NVDA $150B / AZO −9%

Stock Futures Jump as Micron Continues Its Epic Run, Oil Declines and SK Hynix Joins the $1T Club

CNBC’s pre-market wrap captures the cross-currents: US stock futures higher with Micron leading after its 19.3% cash-session gain pushed it into the $1 trillion market-cap club and another 6% overnight added roughly $60 billion more; Treasury yields lower on optimism around Iran peace-deal prospects despite the CENTCOM “self-defense” strikes; SK Hynix hits $1T on AI; Nvidia announces $150 billion of spending plans (lifting Taiwan chip stocks). Piper Sandler says Strait of Hormuz to remain closed for months and oil to hit new highs; JPMorgan flags time to buy unloved safe dividend stocks. Worst single-stock move: AZO −8.99%, its worst day since May 2022. Top single-stock movers: ON +9.3%, TER +8.6%.

InvestingLive — Justin Low GOLDMAN 8,000+ / QUANTINUUM IPO

A More Tepid Mood Set to Greet European Traders Awaiting Further US-Iran Developments

InvestingLive’s pre-Europe wrap describes the morning as cautious as traders await fresh US-Iran headlines. Companion items in the past few hours: “US futures continue to push up as investors stay more optimistic,” “USD/JPY continues to nudge higher in testing Japan’s intervention limits,” “Fed’s Kashkari says far too soon to predict what the next policy move should be,” and a French consumer-sentiment slump to the lowest since March 2023. Embedded Reuters wires note Goldman lifted its S&P 500 target to “8,000+,” SK Hynix joined the $1T club, and Quantinuum is eyeing a $12.7B Nasdaq IPO.

Financial Times — Markets ECB FINANCIAL-STABILITY WARNING

Trump Risks Triggering Financial Crisis With Iran War, Warns ECB — Private-Credit-Fuelled AI Boom Flagged as Systemic Risk

The FT’s lead Markets section item today carries ECB Vice President Luis de Guindos warning that Washington’s volatile trade policy and reduced cooperation, on top of the Iran war, threaten financial stability. Companion FT items dated today: Hg’s first buyout since the “SaaSpocalypse” ($500M software-rights acquisition); the ECB warning that a private-credit-fuelled AI boom poses a systemic risk; the Roundhill Memory ETF (DRAM) reaching $10 billion of AUM in 50 days (+87% since April launch); UK Ofgem energy price cap rising 13% from July to a two-year high of GBP 1,862. Katie Martin’s opinion: “Stocks’ Unshakeable Optimism.”

@DeItaone — Walter Bloomberg LOGAN: HORMUZ ENERGY HIT

Dallas Fed’s Logan Warns of Energy Hit if Hormuz Stays Shut — Demand Destruction as a Channel

Dallas Fed President Lorie Logan, relayed on the @DeItaone tape this morning, warned that the world may have to cut oil and gas use if Strait of Hormuz shipping does not return to normal soon. Before the war about 20% of global oil and LNG supplies passed through the Strait; global oil supply has dropped by about 13 million barrels per day since the war began, with inventories filling the gap. Logan said US oil production growth is expected to stay limited. The headline crossed at the New York cash open and reframes the energy story as a demand-destruction risk rather than purely a supply shock — a Fed official publicly handicapping the oil channel into tomorrow’s PCE.

@KobeissiLetter MICRON +6% OVERNIGHT

Micron Stock Up Another +6% Overnight After $220B Day — Now World’s 12th-Largest Public Company

Following Tuesday’s regular-session rip, Kobeissi flagged that Micron added another +6% in overnight trading on top of the day-session gain, bringing the single-day market cap increase to roughly $220 billion — vaulting it into the global top-12 by market cap. Twelve months ago the entire company was worth under $70 billion. The move makes Micron the marquee single-name AI/memory print of the pre-market and re-rates the entire semi/memory leadership stack heading into the cash open.

Portfolio Armor (via ZeroHedge) COUNTER TO HARTNETT

“Stop Trying to Call the Top” — A Direct Rebuttal to the “Biggest Bubble Since the Railroads” Framing

Portfolio Armor’s ZeroHedge column directly answers the Hartnett bubble note: the AI buildout is rooted in real demand, real revenue and physical bottlenecks (memory, power, photonics, cooling, sensing, storage, logistics, semi-equipment). The piece cites SpaceX’s S-1 filing, Nvidia’s record earnings, and outperformance in less-obvious AI names like Navitas Semiconductor (NVTS), pointing at Korean memory exposure via EWY (+10.2% pre-market) as still running. The framing treats bubble-callers as engagement merchants; the institutional-momentum money, in this read, is not positioning for a top. Useful as the counter-narrative card to set against Hartnett’s call.

ZeroHedge / Newsquawk Europe Wrap EUROPE OPEN WRAP

European Open Wrap — Iran-Talks Optimism, Schnabel/Lane Reaffirm a June ECB Hike, Energy Equities Reset

The Europe morning wrap (via ZeroHedge / Newsquawk mirror) captures the cross-asset overnight tape: equities held up on US-Iran peace optimism, oil whipsawed between strike-headlines and reopen-optimism, ECB’s Schnabel said a June rate hike will be needed and Lane hinted markets are right to price one in, French consumer sentiment slumped to a low since March 2023. The wrap is the single most useful pre-cash-open snapshot for desks that need a one-sentence overnight summary alongside the US tape and the Asia memory-cycle bid.

@DeItaone — Walter Bloomberg BMO MACRO CALL

Bank of Montreal Sees US Real GDP Growing 2.1% in 2026, Inflation to Average Above 3% — Fed Cuts Later

The @DeItaone tape relayed BMO’s house forecast at 8:12 AM ET: US real GDP growth at 2.1% for 2026 with inflation averaging above 3%, and the Fed lowering policy rates later in the year. The dovish-but-stagflation-tilted call hits the tape less than 24 hours before tomorrow’s twin PCE / GDP prints and sets a marker for what Wall Street is circulating heading into the data. The Bayesian update on the Fed framework that Waller laid out in Frankfurt is right at the centre of how desks are sequencing those calls.

@DeItaone — Walter Bloomberg LUFTHANSA DE-RISKS HORMUZ

Lufthansa: No Summer Jet-Fuel Risk — Europe Increases Imports From North America and Africa

Lufthansa Chief Commercial Officer Dieter Vranckx, on the @DeItaone tape at 7:41 AM ET, said suppliers have not warned of jet-fuel shortages even though roughly a quarter of Europe’s jet-fuel imports pass through the Strait of Hormuz. Europe is increasing fuel imports from North America and Africa while refineries boost production. The airline does not expect more flight cancellations tied to the conflict. The first major European carrier publicly de-risking the Hormuz overhang — a marginally bullish data point for the de-escalation tape and a counter-marker to the Piper Sandler “closed for months” call.

@KobeissiLetter KOSPI +100% YTD

BREAKING: South Korea’s Stock Market Surges to a New Record, Now Officially Up +100% in 2026

Kobeissi flagged that the KOSPI tagged another all-time high overnight, with year-to-date gains now at +100% in 2026. The post implicitly ties the move to the global AI/memory frenzy that has lifted Korean chip names; SK Hynix joining the $1T club is the headline name. The post hits the tape at the exact moment US desks are debating whether to chase the AI-adjacent EWY / SMH complex any higher — positioning support for the Portfolio Armor “stop trying to call the top” counter-thesis.

@WalterDeemer RCA 100-YEAR CHART

The Rise and Fall of Radio Corporation of America 100 Years Ago — The Bubble-Camp Companion Chart

Retired institutional analyst Walter Deemer posted a chart of the RCA boom-bust cycle from exactly one century ago, an unmistakable reference point for traders trying to time the AI bubble. The post pulled 58K views and was reposted 105 times within hours. It is being circulated alongside the Hartnett “biggest bubble since the railroads” piece, suggesting the technical/positioning crowd is putting the bubble framing on the same calendar page — even if no one is willing to act on it ahead of the print.

@JKempEnergy — Reuters EU GAS DEFICIT WIDENING

Europe’s Gas Storage Behind Schedule as Hormuz Stays Shut — TTF Higher Into Next Winter

Reuters energy analyst John Kemp flagged that European gas inventories ended last winter below normal and the storage deficit has widened as traders deferred refilling on hopes of a quick Hormuz reopening. With the Strait remaining closed much longer than anticipated despite repeated US-Iran diplomacy progress claims, European benchmark futures are trending upward again as the refill window shortens ahead of next winter. Pairs directly with the Logan / Fed energy warning above.

@JKempEnergy — Reuters LNG FLOW MAP

Global LNG Imports in 2025 — Asia Leading Importer From Pacific Basin and Middle East

Kemp’s morning LNG flow chart shows Asia remained the leading 2025 importer, sourcing mostly from the Pacific Basin and the Middle East, while Europe was the other major importing region sourcing mostly from the Atlantic Basin. The pattern matters now because Pacific Basin / Middle East flow is exactly what Hormuz disrupts, and Atlantic Basin flow is what Europe is racing to scale up — the supply-chain map under the Logan and Lufthansa headlines above.

@JKempEnergy — Reuters EU WIND TURBINE PROTECTION

Europe Wind Turbine Makers Call for Protection From China on National Security Grounds

Kemp surfaced an FT story that top European wind-turbine makers are formally asking for protection from Chinese rivals on national security grounds. The framing matters for the broader trade-policy backdrop feeding through to the EU industrial complex (and to fiscal-stress stories like a German tax-revenue collapse on ZeroHedge this morning). One more data point that the China-vs-West industrial split is intensifying alongside the AI-capex and energy-supply themes.

@NickTimiraos — WSJ NAVARRO vs WARSH

Last republished May 24, 2026 — carryover.

Timiraos Amplifies Navarro Counsel Against Rate Hikes — Setting the White-House-vs-Warsh Tension

WSJ Fed reporter Nick Timiraos amplified White House adviser Peter Navarro’s pre-Memorial Day push back against any Fed rate hikes, calling housing the priority. Timiraos’s framing — “illustrating how the dovish position has changed” — is the giveaway that Fed-whisperer desks are reading this as a White-House-vs-Warsh signal heading into the new Chair’s first public remarks. Sets the table for Wednesday tape-watching even though the post itself is now a few days old.

Conference Board — US Consumer Confidence 93.1 (−0.7)

Consumer Confidence Edged Down to 93.1 in May as Middle East Price Shocks Persist

The Conference Board Consumer Confidence Index dipped 0.7 points to 93.1 in May (1985 = 100), from an upwardly revised 93.8 in April. The Present Situation Index — current business and labour conditions — fell 3.2 points to 121.2, while the Expectations Index actually rose 1.0 to 74.4. The survey window of May 1–19 captured the full impact of the Middle East war’s pass-through to gasoline and grocery prices. Chief Economist Dana Peterson tied the decline directly to “inflationary impacts of the war in the Middle East intensified,” with consumer appraisals of both current business conditions and the labour market moderately less positive than April. The Expectations reading above the 80 threshold remains the only thing keeping the print out of formal recession-warning territory.

Conference Board — US LEI LEI +0.1%, 6mo −0.7%

Leading Economic Index Inches Up 0.1% in April to 97.4 After March’s 0.6% Drop — Diffusion Still Negative

The Leading Economic Index rose 0.1% in April to 97.4 (2016 = 100), following a 0.6% March decline. Over the past six months (Oct 2025 to Apr 2026) the LEI fell 0.7% — a less severe contraction than the 1.0% drop in the previous six-month period. Justyna Zabinska-La Monica attributed the bounce mainly to rebounding stock prices and a narrow gain in multi-family building permits. The LEI remains below late-2022 levels and the six-month diffusion still skews negative, but the rate-of-change has stopped deteriorating — the “growth slowdown but not imminent recession” signal the desks have been pricing. Sits in clear tension with Atlanta Fed GDPNow tracking Q2 at +4.3%.

Atlanta Fed — GDPNow Q2 +4.3%

GDPNow Tracking Q2 2026 Real GDP at +4.3% Heading Into Tomorrow’s Q1 Second Estimate

The Atlanta Fed’s GDPNow nowcasting model currently estimates Q2 2026 real GDP growth at +4.3%, last updated May 21 with the next update scheduled for May 28 — the same day as the BEA Q1 second estimate and April PCE release. The +4.3% Q2 tracking estimate is a sharp acceleration from Waller’s stated 2.0% Q1 print and would mark the strongest reading since the AI capex surge began. Strength has been driven by personal consumption expenditures and gross private domestic investment, both reflecting the broad-based AI buildout. The contrast between GDPNow at +4.3% and the LEI’s six-month decline of −0.7% captures the “two economies” tension — strong nominal GDP from AI infrastructure spend versus weak diffusion across consumer-facing leading indicators.

Dallas Fed — Texas Mfg Outlook Survey RAW MATERIALS 8-MO HIGH

Texas Manufacturing Output Decelerates in May; Input Prices Hit an 8-Month High at 42.7

The Dallas Fed Texas Manufacturing Outlook Survey, released Tuesday, showed factory output growth slowing to a moderate pace with the production index falling 10 points to 9.4. Capacity utilisation plunged 15 points to 5.2, new orders dipped 4 to 6.4, shipments dropped 8 to 7.4 — broad-based deceleration after April’s strength. The general business activity index edged up 3 points to 0.4 (essentially zero); company outlook 0.3; outlook uncertainty 19.2 (above the 16.9 series average). Critically for tomorrow’s PCE, the raw-materials prices index jumped 6 points to 42.7 — its highest in eight months — while finished-goods prices fell 9 points to 18.9. The squeeze between rising input costs and softening finished prices flags margin pressure ahead, even as the headline numbers stayed positive.

NFIB — Small Business Optimism 95.9, 2ND MONTH BELOW AVG

Carryover — last published May 13, 2026.

NFIB Small Business Optimism Stuck at 95.9 in April — Below 52-Year Average for Second Consecutive Month

NFIB Small Business Optimism rose 0.1 points in April to 95.9 but remains below its 52-year average of 98.0 for the second consecutive month. The Uncertainty Index fell 4 points to 88 but is still well above its 68 historical norm. The Employment Index fell from 101.6 to 100.4, the second consecutive monthly decline and now below the 2025 average of 101.2. Most concerning for tomorrow’s PCE setup: the net percent of owners raising average selling prices rose 5 points to a net 30% in April (seasonally adjusted) and planned price hikes also moved up. Chief Economist Bill Dunkelberg said “inflationary pressures continue to be a challenge for Main Street” — reinforcing the same broad-pricing concern Waller flagged Friday in Frankfurt.

NY Fed — Survey of Consumer Expectations 1y INFLATION EXP 3.6%

Carryover — last published May 12, 2026.

Median 1-Year Inflation Expectations Rise to 3.6% in April; Medium and Long Horizons Stable

The NY Fed Survey of Consumer Expectations showed median one-year-ahead inflation expectations rising 0.2 percentage point to 3.6% in April, while three-year (3.1%) and five-year (3.0%) horizons were unchanged. Median 1-year gas-price growth expectations dropped sharply by 4.3 ppts to 5.1% after a March spike — notable given that the April survey predates the current CENTCOM strike escalation. Median 1-year-ahead earnings growth expectations rose 0.3 ppt to 2.7%, but mean unemployment expectations also moved higher. The structure (short-term up, long-term anchored) is exactly the pattern Waller said in Frankfurt he is “watching market-based measures carefully” for — and exactly the brittle starting point heading into tomorrow’s April PCE print.

Bureau of Economic Analysis — Release Schedule TOMORROW: TWIN PRINT

BEA Confirms Tomorrow’s Twin Print: Q1 GDP Second Estimate + April Personal Income & Outlays, Both 8:30 AM ET

The official BEA release schedule confirms two simultaneous prints tomorrow (Thursday May 28) at 8:30 AM ET: the GDP Second Estimate and Corporate Profits for Q1 2026, plus Personal Income and Outlays for April 2026 (which contains the PCE deflator). The first estimate had Q1 GDP at +2.0% per Waller’s Frankfurt remarks. After that, the next major BEA item is the June 9 International Trade in Goods and Services for April. No new BEA or BLS releases hit the tape today; Wednesday is the calm before the storm. Consensus for April PCE clusters near 0.3% m/m headline and 0.2% m/m core (with the yearly comparison around 3.0% / 2.8%), but Waller’s own modeling implies upside risk to 3.8% / 3.3%.

Fed Governor Christopher Waller — Frankfurt Speech POLICY RISKS HAVE CHANGED

Waller in Frankfurt: Drop the Easing Bias, Hold Steady, Hikes Not Ruled Out — The Pivot the Bond Market Has Been Pricing

In his most consequential speech in months, Governor Waller used the Frankfurt School platform Friday to formalise the pivot. He said he would support removing the “easing bias” language from the FOMC statement to clarify “a rate cut is no more likely in the future than a rate increase.” He explicitly said he can “no longer rule out rate hikes further down the road if inflation does not abate soon, and that is especially true if measures of inflation expectations show signs of becoming unanchored.” Waller cited CPI +0.6% m/m in April with energy +3.8%, services-ex-energy +0.5%, and his own April PCE estimate of 3.8% headline / 3.3% core (the highest in three and two-and-a-half years respectively); he noted that the ISM manufacturing input price index jumped from 59 to 84.6 in three months — matching April 2022’s pandemic-crisis level. He framed the inflation risk as a Bayesian-updating problem: a sequence of “transitory” shocks (tariffs, then oil) may unanchor expectations even if each is independently transitory.

Federal Reserve Board — Speeches & Testimony WARSH SILENT

Warsh Confirmation Effect — Sworn In Friday May 22, No Public Remarks Posted Yet

The Federal Reserve speeches feed shows the latest Board-level item is Waller’s Frankfurt lecture from Friday May 22, 10:00 AM ET — the same day new Chair Kevin Warsh was sworn in. As of this morning’s check, Warsh has posted NO speeches, testimony or public remarks since his swearing-in. The desk consensus has been pricing his first appearance as the binary risk of the week — markets cannot calibrate the new Powell-successor reaction function without it. Other recent calendar items: Governor Barr in Atlanta on financial health (5/20) and at Money Marketeers (5/14), Vice Chair Bowman opening at the KC Fed (5/14). The next FOMC meeting is June 16–17.

FEDS Notes — Board Staff AI SOFTWARE +9σ TO CORE PCE

Computer Software Category Adding “Nine Standard Deviations Above Normal” to Core PCE — A Measurement Story With Tomorrow Implications

A FEDS Note published May 22 by Board staff (Barbarino, Diercks, Miran) drops a striking finding directly relevant to tomorrow’s PCE print: from November 2025 through March 2026, the “Computer Software and Accessories” category of the PCE price index has made a contribution to core PCE inflation that is “more than 9 standard deviations above their historical means.” Over the past four months annualised core PCE has run 4.4% — and the gap between core PCE and core-PCE-ex-software is about two-thirds of a percentage point, even though software comprises only 1.2% of the core PCE basket and has trended DOWNWARD for decades. This is a price-measurement story tied directly to the AI capex boom — what looks like sticky core goods inflation may be partly an artifact of how the basket is measuring AI-driven software bundles. Watch the software component in tomorrow’s release for confirmation.

NY Fed — Liberty Street Economics TWIn FLAT NEAR 2017–19

Trend Wage Inflation Decline Has “Lost Momentum” Near 2017–19 Levels — The Wage-Channel Disinflation Is Done

A Liberty Street Economics post published Tuesday by Almuzara, Audoly and Melcangi finds the NY Fed’s proprietary Trend Wage Inflation (TWIn) measure — which strips out transitory noise from wage data — has decelerated to levels comparable to the 2017–19 pre-pandemic period after peaking in late 2021. But the decline has “lost momentum” in recent months, and a few sectors are showing decoupling of wage-growth dynamics from the broader fall. Combined with Waller’s observation that wage growth averaging below 4% would be consistent with inflation close to 2%, the work suggests the wage-channel disinflation has effectively run its course — further core-PCE relief has to come from goods, services and energy, not labour costs. A subtle hawkish signal in the data heading into tomorrow.

FRED Blog — St. Louis Fed $6.7T AI CAPEX BY 2030

Carryover — last published May 18, 2026.

Rising Capex / Declining Cash During the AI Boom — $6.7 Trillion Global AI Capex Projected by 2030

A FRED Blog post highlights that US nonfinancial firms have intensified R&D spending and reduced cash holdings (as a share of total assets) to fund the AI buildout — and cites an external projection that AI-related capital expenditures will require $6.7 TRILLION worldwide by 2030 to keep pace with demand for computing power. The St. Louis Fed researchers note that AI-related investment boosted real GDP growth in 2025 beyond even what IT components contributed during the dot-com boom. This is the macro framework behind the Atlanta Fed GDPNow +4.3% print and Waller’s “torrid business investment related to AI” remark — but it also undercuts the bull case if cash levels deplete further or if AI returns disappoint.