🇺🇸 Finally, some good news

What’s going on here?

Wednesday’s US inflation data showed consumer prices rose just a tad less than expected last month.

What does this mean?

There’s good and bad news in the latest US inflation report. On the bright side, April's consumer prices rose just 4.9% annually – the first reading to come in under 5% in two years. And that dropoff might suggest that the Federal Reserve (the Fed) is finally having some success with its relentless interest rate hikes, after inflation peaked at around 9% last June. But hold the applause: both the headline number and core inflation – a key measure that tosses aside volatile prices like food and energy – barely fell, showing that this could turn into a war of attrition. That’s got economists doubting that the Fed will end up cutting rates this year, despite poor traders’ hopes and dreams.

Why should I care?

For markets: The Fed’s breather.

After last week’s sizzling jobs data stirred up concerns, these cooler-than-expected inflation figures got markets optimistic again – and they could give the Fed the leeway it needs to go ahead with its long-awaited pause too. Plus, there are some other factors poised to hit inflation anyway. Data shows that banks are already making it harder to get loans, and that might hit spending – helping to lower inflation’s temperature a little. The only catch: that dampened spending might also slow growth, ultimately upping the odds of a recession.

The bigger picture: Ahead of the pack.

The Fed might be mulling over a break from rate hikes, but its peers are still going strong. The Bank of England, for one, is expected to increase rates by another 0.25 percentage points on Thursday. And the hard-pressed European Central Bank, for another, isn’t expected to stop until September – with experts reportedly thinking that three more hikes are needed to get inflation under control.

What’s going on here?

Toyota, the automaking titan, has unveiled plans for a new, vigorous push into the EV market.

What does this mean?

Toyota had a killer financial year-end, keeping its crown as the world’s leading automaker thanks to a softer yen – which pumped up the value of international sales – and the easing of supply snags. But it’s not all been smooth smailing. Over in China – the world’s biggest car market – local brands like BYD are making waves with their all-electric cars, and Toyota’s looking over its shoulder pretty anxiously. The game plan: amp up its EV drive in a bid to stay ahead. Toyota’s not shy about its goals: after shifting 38,000 battery-powered EVs last year, it’s shooting for over 200,000 this year – and a head-turning 1.5 million by 2026, by which time it plans to unveil 10 fresh car models too.

Why should I care?

The bigger picture: Baby steps.

If Toyota hits the bullseye this year, EVs will still only amount to a fraction of its total sales – and well behind industry leader Tesla’s figures. But every big leap starts with a small step – and while this push doesn’t mean Toyota is going to stop dabbling in other technologies, like gasoline, hybrid, and hydrogen, the firm’s heading in the right direction, particularly for green-minded investors. That, along with the announcement of a fresh $1.1 billion buyback program, could explain why Toyota’s stock jumped when the news broke.

Zooming out: Metalheads.

EVs are key to the much-vaunted green energy transition, and lithium carbonate is a crucial ingredient in making their batteries. And that’s got savvy miners anticipating a surge in demand and adding to their reserves of the precious substance. Case in point: Allkem announced on Wednesday that it’s merging with fellow lithium producer Livent – catapulting the new, merged firm to spot number three on the list of the world’s biggest producers.