5 Things You Need to Know to Start Your Day

Powell promises more rate hikes, Wall Street banks pass this year’s stress test, and dealmakers lose out on $1 trillion amid the slump. — Li [View in browser]( [Bloomberg]( Powell promises more rate hikes, Wall Street banks pass this year’s stress test, and dealmakers lose out on $1 trillion amid the slump. — [Liza Tetley]( More hikes Federal Reserve Chair Jerome Powell had a busy day yesterday, speaking at both Sintra in Portugal, and at a conference in Madrid at the Bank of Spain.  His message was clear — [at least two more interest-rate hikes would likely be necessary this year to bring inflation down to target.]( “It may be that we don’t move for a meeting and then move at a meeting. We haven’t taken consecutive moves off the table,” he said, adding that the US wouldn’t be returning to pre-pandemic rate levels for a “good while.”  Stress test Meanwhile, back in the US, [Wall Street’s biggest banks all passed the Fed’s annual stress test](, showing all of the firms can withstand a severe global recession and turmoil in real estate markets. Things are less rosy among[midsize regional banks though, which this month have been warning investors that higher funding costs are weighing]( on the industry. They’re finding ways to replace some of the deposit outflows from early this year. But the “hot money” they are resorting to is expensive, and not very sticky. Deal slump [Dealmakers across the globe are down around $1 trillion after transactionsÂ](slumped 42% in the first half — the most in a decade. Mergers and acquisitions, new listings, and private equity deals dropped amid inflation pressures and credit constraints. Now, with the summer lull on the doorstep, things could just get worse for Wall Street, where banks have already been slashing bonuses and jobs in response to the slump. Muted gains Stock futures are pointing higher this morning, with contracts on the tech-heavy Nasdaq up 0.2% as of 5:16 a.m. in New York, while S&P 500 futures gain around 0.1%. Treasury yields are ticking higher across the curve, while a measure of the dollar strengthens slightly. Gold prices are sliding on the prospect of further rate hikes while oil also declines. Iron ore meanwhile is continuing its winning streak for a third day. Coming up… A relatively light schedule today, with the Fed’s Bostic speaking at 6 a.m. followed by Initial Jobless Claims and first quarter GDP data at 8:30 a.m. and then May Pending Home Sales at 10 a.m. The US will sell $70 billion 4-week and $60 billion 8-week bills at 11:30 a.m.  Earnings today include Nike, McCormick & Co., and Paychex. Will inflation make you poorer this year? Is the higher cost of living eating up whatever gains you expect to see from your savings or investments? Are you putting your savings in safe or risky assets? Share your views in the latest MLIV Pulse [survey](. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [Spanish inflation hits a two-year low](, sinking below the ECB target - [Russia needs new gas infrastructure to pivot to its eastern]( customers - [Big China stimulus may not be on the cards](after all - [The challenge facing the UK Prime Minister deepensÂ](with Thames Water’s crisis - [Micron gives an upbeat forecast]( in sign that the worst is past for the industry - Wealthy [UK investors are splurging on high yielding government debt]( - [Bud Light retailers are struggling to offload the beer](bbg://news/stories/RX0BPWTP3SHS) after brand boycott And finally, here’s what Joe’s interested in this morning... On the [Odd Lots podcast today](, we talk about about crypto with an unusual guest. The actor Ben McKenzie, who many know from the show the OC, has a [forthcoming book]( about his journey down the crypto rabbit hole when the pandemic hit. Except, instead of plowing his money into Bitcoin and a bunch of junk, he decided to pivot to investigative journalism, to understand more about how the industry really works. With the SEC bringing various enforcement actions, and the price of many coins languishing, the one bright spot seems to be that at least on some level, institutions are still interested in it. It's not like 2021 or 2022, when every other day some organization announced a Web3 or NFT endeavor. But there are a lot of filings these days for spot Bitcoin ETFs, which has raised hopes that there might be a fresh source of cash inflows to pump up coin prices. All that being said, I was fascinated to see ([first reported by The Block]() that this is now the front page of the website for Paradigm, one of the earliest, most influential, and most respected crypto investing firms. One of the firms founders is Fred Ehrsam, one of the co-founders of Coinbase. No mention of crypto at all on the front page. In comparison, [per The Wayback Machine](, this was their webpage on June 29, 2022. [In a lengthy tweet on Tuesday](, Paradigm's Matt Huang said the firm has never been more dedicated to crypto, but that also "developments in AI are too interesting to ignore." There's no real great mystery here. Crypto is in a slump, and the SEC action is casting a pall of uncertainty across the industry. Meanwhile, investors can't get enough of AI, whether in public or private markets. Expect to see more players go to where the action is. Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](