The Week the World Tilted East

🔑 This Week in 60 Seconds

• 🇺🇸🇨🇳 Trump-Xi Summit — 3-day Beijing visit, warm optics, thin deals, $14B Taiwan arms sale shelved
• 🇷🇺🇨🇳 Putin to Beijing (May 19-20) — Confirmed hours after Trump left
• 💰 US Inflation at 3.8% — Highest since May 2023, wages now trailing prices
• 🏦 Fed Chair Transition — Powell exits after 8 years, Kevin Warsh confirmed as successor
• ⛽ Oil above $108 — Strait of Hormuz still blocked, no Iran resolution
• 🤖 Asia's K-Shaped Economy — AI boom drives record profits while oil crisis pushes millions toward poverty

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📊 The Numbers

Indicator	This Week	Context
US CPI Inflation	3.8% ▲	Highest since May 2023
Brent Crude	$108+/bbl ▲3%	Strait of Hormuz still blocked
Dow Futures	-300 pts (-0.6%)	Post-summit selloff
Nasdaq Futures	-1.4%	Tech CEOs returned empty-handed
US Consumer Sentiment	Record low	77% say Trump policies raised costs
Taiwan GDP Growth	13.69% (Q1)	39-year high, driven by TSMC
US Wage Growth	3.6% < CPI 3.8%	Wages trail inflation for first time since Apr 2023

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🏛️ The Big Story: Trump in Beijing

Trump spent May 14-15 in Beijing — his first presidential China visit since 2017. Xi rolled out every diplomatic flourish: military gun salute, Great Hall of the People ceremony, Temple of Heaven stroll, and a rare tour inside Zhongnanhai.

What was announced (by the US):

• Boeing 787 Dreamliner order (quantity/value TBD)
• $20B in US agricultural purchases over 2 years
• "Exploratory" framework on Chinese crude oil purchases

What China confirmed: None of the above. Beijing's readout mentioned only "constructive dialogue" and "mutual respect."

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💰 The Fed Changes Guard

Jerome Powell officially stepped down after 8 years. Kevin Warsh, confirmed 53-47 along party lines, takes over as the 17th Fed Chair.

Why it matters:

• Warsh is considered a monetary hawk — expect tighter policy signals
• Markets will watch his first press conference (June 18) closely
• With inflation at 3.8%, Warsh inherits a rate-cut dilemma

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⚡ So What? — 3 Things to Do This Week

1. Supply chain managers: Don't restructure based on the summit. Zero confirmed tariff changes. Keep current sourcing diversification plans active.

2. Tech leaders: Start scenario-planning for Taiwan supply disruption. TSMC's Arizona fab won't be at scale until 2028.

3. CFOs & Treasurers: Warsh's hawkish orientation + 3.8% inflation = rates staying higher for longer. Adjust your interest rate assumptions for 2026-27 planning.