Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting Club
PRO
LivestreamMenu
- The Federal Reserve is set to kick off its two-day meeting amid a slew of price dislocations. The AI sell-off prompted President Donald Trump to make an extraordinary intervention, calling concerns a “hoax.”
- The yield on the 10-year Treasury hit a level not seen since 2007.
- Crude prices are driving higher on fresh Houthi strikes on Saudi Arabia and disruption in the Strait of Hormuz.
President Donald Trump and Kevin Warsh, chairman of the Federal Reserve, during a swearing-in ceremony in the East Room of the White House in Washington, May 22, 2026.Yuri Gripas | Bloomberg | Getty Images
Hello, this is Leonie Kidd coming to you from London. Welcome to another edition of CNBC’s Daily Open.
This week’s policy decision already presented a dilemma for Chairman Kevin Warsh.
Hike rates and risk the ire of President Donald Trump. Hold rates and risk the ire of the markets for looking out of touch.
And things just got more complicated with the 10-year Treasury yield hitting a level not seen since 2007, oil prices holding above the triple-digit levels, and an AI sell-off wiping trillions of dollars from some of Wall Street’s AI darlings.
Read on for more.
What you need to know today
The market is not making things easy for the Federal Reserve this week. The central bank kicks off its two-day meeting on Tuesday with a raft of price dislocations to consider as it sets policy. Markets are pricing in a near-certain hike by 25 basis points on Wednesday, with the probability of another December hike now at 75%.
AI for an AI
First up, the AI trade has turned. Stocks tied to the AI boom slumped on Monday after the three biggest AI bosses warned the frantic pace of model development needed to be slowed.
Even a remarkable intervention from U.S. President Donald Trump failed to stop stocks sliding into the close.
In an extraordinary scene, Trump called Nvidia boss Jensen Huang during an on-stage appearance at the All-In Summit. “I’m telling you, it’s all a hoax,” Trump said, according to a video posted on social media by an attendee.
Yield to the bond market
Next up, the 10-year Treasury yield has risen to its highest level since 2007 in early Tuesday trading. This came after the yield crossed the psychological 5% level during the session on Monday.
The deepening sell-off in U.S. government debt will put further pressure on the Fed and Chair Kevin Warsh to target inflation, which is holding well above the 2% target.
Oil price pressure
And don’t forget, oil prices are rising, with both futures for international benchmark Brent crude and U.S. West Texas Intermediate futures holding above the triple-digit level per barrel.
Reports of fresh Houthi strikes on Saudi Arabia and renewed attacks on vessels in the Strait of Hormuz have maintained upward pressure on crude prices.
Oil and Treasury yields are moving in near lockstep, with the correlation at its strongest since 2019. Read more on this here.
U.S. stock futures have dipped ahead of Tuesday’s session, with a broadly negative handover from Asia, and Europe called to open in the red.
— Leonie Kidd
And Finally…
Standard Chartered CEO Bill Winters on the ‘reckless path’ that shaped his banking career
Bill Winters planned to become a diplomat. Instead, a job at J.P. Morgan led him into banking and eventually to a pivotal early-career decision: move into the emerging derivatives business despite knowing little about it.
In this episode of Executive Decisions, the Standard Chartered CEO tells Steve Sedgwick why that experience helped shape a career philosophy he still shares with younger colleagues: when rare opportunities arise, sometimes you should “take the reckless path.”
For Winters, that doesn’t mean being careless; it means being prepared to choose the less conventional route when it offers more to learn.
— Steve Sedgwick
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.Read More
