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Federal Reserve officials agreed at their June meeting that interest rates may need to rise if inflation remains elevated, while maintaining that policy could stay unchanged if price pressures ease. The Federal Open Market Committee unanimously kept its benchmark interest rate at 3.5% to 3.75%, but projections showed nine of 18 policymakers now expect at least one rate hike by the end of the year, compared with none in March. Meeting minutes highlighted growing concern that inflation could prove more persistent, with officials identifying the rapid expansion of artificial intelligence investment, alongside tariffs and geopolitical tensions, as potential drivers of sustained price pressures. Policymakers said the outlook will depend on upcoming inflation and labor market data as they weigh the risks of tightening policy too quickly against allowing inflation to become entrenched.

 

CNBC

Reuters

US News and World Report

Wall Street Journal

European Central Bank chief financial supervisor Claudia Buch has sent a letter to 110 lenders giving them until the end of October to come up with a “comprehensive action plan” on how they will tackle risks from cutting-edge artificial intelligence models. "Emerging AI models are capable of identifying software vulnerabilities and generating functioning exploits at unprecedented speed, compressing the timeline between vulnerability discovery and exploitation. These developments have potentially profound implications for the confidentiality, integrity and resilience of banks’ information and communication technology (ICT) systems," Buch wrote. In a separate warning, the European Systemic Risk Board, a European Union body that issues recommendations to other authorities, also said systemic cyber risks stemming from frontier AI models “should be treated as a source of systemic risk” by the finance industry.

 

Financial Times

Politico

Reuters

Arya Bolurfrushan, the founder and chief executive of Abu Dhabi-based AI startup AppliedAI, secretly pleaded guilty last year to participating in ​a long-running scheme in ​which ​law firms' attorneys tipped traders about mergers their employers were advising on. The former Goldman Sachs banker pleaded guilty ​after reaching a deal with federal prosecutors in Boston who were working to ​build cases against dozens of other people accused of taking part in the scheme, including Nicolo Nourafchan, who had worked at Sidley Austin, Latham & Watkins ​and Goodwin Procter, and 29 others accused of engaging ​in a scheme to profit from confidential information about mergers underway. Prosecutors agreed to recommend that Bolurfrushan be sentenced to two years in prison and forfeit $954,496 he derived ​from the scheme. Nourafchan has pleaded not guilty to securities fraud and other charges and is awaiting trial.

 

CNBC

Reuters

A U.K. judge has ruled that insurers of the Nord Stream pipelines don't have to pay €580m ($662m) over explosions that destroyed the pipes bringing Russian gas to Europe because the sabotage was the consequence of the war in Ukraine. Judge Clare Moulder at the High Court in London said: “The damage to the pipelines (both the ruptures and the dent) was ‘directly or indirectly occasioned by, happening through, or in consequence of war’ . . . Such damage was excluded from cover by the terms of Exclusion 2.i of the policies.” The FT notes that the ruling means western insurers won't have to make a huge payment to a company that is majority owned by Russian state-backed gas champion Gazprom.

 

Bloomberg

Financial Times

Insurance Journal

A federal judge has rejected an attempt by United Airlines to dismiss a lawsuit filed by passengers who said they had paid additional ​money to sit in window seats, only to find that the ‌seats had no windows. U.S. District Judge James Donato in San Francisco rejected the carrier's defense that "window" referred to the location of a seat relative to the cabin wall and ​aisle, and that it had not contractually promised that seats in ​the window position would have exterior views. Delta Air Lines  is seeking to dismiss its lawsuit in the Brooklyn, New York, federal court.

 

Reuters

U.S. consumer borrowing unexpectedly declined in May, the Federal Reserve reported on Wednesday, marking the first monthly drop since 2024, as Americans reduced their use of credit cards. Total consumer credit outstanding fell by $182m, compared with economists' expectations for a $17.5bn increase, driven by a $5.3bn decline in revolving credit, the largest fall since 2024. Non-revolving credit, including auto and student loans, increased by $5.1bn, partially offsetting the decline. The figures suggest consumers are beginning to reduce debt after two months of strong borrowing, although elevated borrowing costs remain a challenge, with the average interest rate on credit card accounts carrying interest standing at 22.15% in May.

 

Bloomberg

U.S. wholesale inventories increased just 0.1% in May, down from the initial estimate of 0.3%, according to revised Commerce Department data, suggesting inventory rebuilding may provide a smaller boost to second-quarter economic growth than previously expected. Inventories rose 0.7% in April and were 4.0% higher than a year earlier. Business inventories have declined for four consecutive quarters, and economists had expected restocking to help offset the economic impact of a widening trade deficit. Inventory gains were led by professional equipment, computer equipment, furniture, and hardware, with computer inventories rising 4.0%, reflecting continued investment in artificial intelligence. Meanwhile, metal inventories fell 2.8%, petroleum inventories declined 5.7%, and wholesale sales rose 3.4%, reducing the inventory-to-sales ratio to 1.15 months, the lowest level since April 2012.

 

Reuters

Global growth is forecast to decline from 3.5% in 2025 to 3% in 2026 before climbing back to 3.4% in 2027, according to the IMF's latest World Economic Outlook. The IMF identified an increased dependence on AI and renewable energy as two factors that helped offset the negative impact of the U.S.-Iran war on the global economy. “The global economy as a whole has, so far, weathered the shock from the war better than feared,” the organization's researchers said. “Movements in and repercussions from the main channels of transmission - commodity prices, inflation expectations, and financial conditions - have been relatively limited.”

 

The Hill

Financial Times

Aspen Group has abandoned plans to sell its WellNow urgent care business as it works to address around $3bn of loans due next year, prompting lenders to hire law firm Gibson Dunn & Crutcher ahead of potential debt negotiations. The company had explored selling WellNow for up to $300m, with proceeds expected to help reduce its debt burden, but has since informed lenders it will no longer pursue the transaction. The owner of Aspen Dental has been exploring options to strengthen its balance sheet following weaker trading, including bringing in outside investors. Adjusted EBITDA fell almost 6% year-on-year to $101.1m in the first quarter, following a 23% decline in the previous quarter, while one of its $1.2bn loans due in 2027 was recently quoted at 89.9 cents on the dollar, reflecting investor concerns over its financial position.

 

Bloomberg

Reuters reports on the growing number of Brazilian companies who are turning to creditors to escape debt while avoiding the costs of formal bankruptcy protection proceedings, in response to a 14.25% interest rate imposed on many of them. A 2020 legal reform which made out-of-court restructurings more flexible​ precipitated "a cultural shift," observed Juliana Biolchi, the director of the Brazilian Out-of-Court Restructuring Observatory (Obre). The straightforwardness of the process compared to in-court solutions has made it "increasingly associated with less severe financial distress," Biolchi said.

 

Reuters

Trade tensions with the United States are prompting a growing number of Canadian manufacturers to reconsider their long-term investment strategies, with a KPMG Canada survey finding that 42% have moved or are considering moving production south of the border. Of those exploring relocation, 77% expect to do so within the next two years as businesses seek greater certainty amid ongoing tariff disputes and the review of the Canada-United States-Mexico Agreement (CUSMA). The survey also found that 57% of manufacturers have paused, reduced, or canceled capital investment projects in Canada, raising concerns that future investment could increasingly shift to the United States. While 80% of companies expect to keep their headquarters in Canada, 11% plan to relocate their head offices to the U.S. within five years, a move KPMG warned could have a meaningful impact on Canada's economy.

 

BNN Bloomberg

Several major law firms, including Ropes & Gray and Simpson Thacher, have left their DEI chief positions unfilled for over a year amid the Trump administration's discouragement of diversity and inclusion initiatives. Other firms, including Kirkland & Ellis and Cravath Swaine & Moore, have also not replaced their diversity officers who departed in recent months. “It’s unmistakable in so far that this sends a message that this is no longer a priority as an institution,” observes Stacy Hawkins, a professor at Rutgers Law School who was the first diversity director for Ballard Spahr before leaving in 2007.

 

Bloomberg Law

Major insurers participating in the Affordable Care Act (ACA) marketplace are seeking another round of double-digit premium increases for 2027, citing rising healthcare costs, higher spending on prescription drugs and hospital care, and declining enrollment following reductions in federal subsidies. According to an analysis by KFF, the median requested premium increase across 77 publicly available filings is 14%, following a median 20% increase for 2026. Some insurers have requested especially large increases. Centene is seeking a 28% rate hike in Washington state after raising premiums 35% in 2026, while Blue Cross & Blue Shield of Illinois has requested a 15% increase following a 28% increase this year. Elevance Health has also requested double-digit increases in several states, including Indiana, Connecticut, Kentucky, and Maine. Insurers say reduced federal subsidies have led millions of healthier consumers to leave the ACA marketplace, leaving a smaller, less healthy, and more expensive risk pool. ACA enrollment fell from 22.1m to 19.2m between February 2025 and February 2026, and actuaries expect further declines.

 

Wall Street Journal

A record 11% of Americans are taking a GLP-1 medication for weight loss, according to Gallup, up 3% from 2024. Meanwhile, the obesity rate among Americans fell to 36.4% in 2026, down from a record high of 39.9% in 2022, the year after the GLP-1 medication Wegovy was first approved by the Food and Drug Administration (FDA) to treat weight loss. Just over two-thirds (68%) of GLP-1 users reported taking a name brand drug developed by pharmaceutical majors such as Novo Nordisk and Eli Lilly, including Ozempic, Mounjaro or Zepbound; 19% said they took custom-mixed drugs unapproved by the FDA.

 

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Forbes

Washington Post