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It’s summer, so the temperatures are rising in America, adding stress to automobiles motoring down highways. Modern cars have long had dashboards that communicate their health to the driver.

Regimes can only last so long. Eventually, wars, elections, or expiring appointments usher in change. Some changes are abrupt, and while it could be too early to tell, hints that the Federal Reserve is in the midst of a jarring transition right now are mounting. The first Federal Open Market Committee (FOMC) meeting with Kevin Warsh at the helm is now behind us.

Game five of the NBA Finals happens tomorrow night. As of this writing, the best-of-seven series is led by the New York Knickerbockers after a dramatic comeback at Madison Square Gardens for the first home-team win of the series. It has been decades since the New York Knickerbockers last won the title (1973 to be exact).

While there are others, matter typically comes in three phases: solid, liquid, and gas. Changes between two phases are known as transitions. For instance, when water (a liquid) is stored in a freezer long enough, it transitions into ice (a solid).  Global monetary policy may be in the midst of a phase transition itself.

Estate planning in America may not feel as glamorous as life on a Chanel runway, but it matters as much for ordinary families as it did for Karl Lagerfeld and his famously pampered cat, Choupette. After Lagerfeld’s death in 2019, attention shifted to the idea that his blue-cream Birman might inherit a portion of an estate possibly worth hundreds of millions.

This was potentially a telling week for interest rates in America on the extreme ends of the yield curve. Way out on the right of the curve is the 30-year treasury bond. Its yield is what lenders to the American government can expect to be paid for the long-term loan. It reached 5.18% earlier this week, the highest level since 2006 (see chart above).

The petrodollar system materialized in the early 1970s as Saudi Arabia agreed to sell oil in U.S. dollars exclusively in exchange for military protection. In return, Saudi Arabia reinvested at least a portion their oil revenues into U.S. Treasury Securities. Ultimately, this agreement extended to other oil producing nations.

Around the world, governments are pouring money into national security. This can take many forms. Governments, for instance, might spend their tax revenues on militaries, cyber security, or defense against terrorism.

America has been at war with Iran for roughly two months. This has dramatically impacted the global energy markets, mostly by pushing the costs higher.  Most households here at home have felt the pressure at the pump. Further down the horizon, we may all feel other knock-on effects as firms deal with higher transportation and production prices cutting into margins.

Two things are hot topics in Washington D.C. these days: artificial intelligence (AI) and the Federal Reserve. Just Tuesday an announcement was made about the newest Anthropic model, Mythos, getting into the hands of nefarious actors. This is an AI model which has discovered many cybersecurity vulnerabilities across many platforms which were previously unknown.