Wealthion Macro Bites – Fed Officials Warn Inflation Pressures Are Now Broad-Based

Japan’s Kyodo News reports than an “unnamed Iranian official” said Tehran has offered to “reopen the Strait of Hormuz within seven days if the U.S. takes initial steps toward easing military pressure.”  However, the official ruled out a meeting between Iranian President Masoud Pezeshkian and President Trump on the sidelines of the U.N. General Assembly in New York this week.  “There is the possibility of moving toward an agreement,” but Washington must demonstrate “seriousness and commitment” if diplomacy is to advance.

On Monday, the Canadian government introduced Bill C-39 (Building Canada Strong Act) as the most comprehensive regulatory overhaul of the country’s infrastructure and natural resources approvals in a generation.  The Bill reshapes federal regulatory review processes, providing businesses with accelerated, predictable, and legally binding timelines to clear project backlogs.

A key component of C-39 is the “One Project, One Review” policy, in which a single lead regulator manages a project eliminating overlapping municipal, provincial and federal jurisdictions.  To complement this slashing of regulatory “red tape,” the federal government will allow companies an immediate 100% write-off of development capex on oil and gas pipelines, mining properties, and oil production equipment.  This policy is aimed at neutralizing advantage of U.S. bonus depreciation rules and directly incentivizes capital injection back into the Alberta oil sands and critical mineral projects.

President Trump announced a "massive deal" to purchase Belarusian potash at a lower cost than current Canadian imports which is “very good news for our Farmers and Ranchers.”  However, Belarus’s authoritarian leader Alexander Lukashenko said there are no available volumes of fertilizer to send to the U.S., “Even if we wanted to supply [potash] to other, Western markets, we simply do not have those volumes—everything is contracted.”

Indonesia’s vast Morowali Industrial Park informed companies over the weekend of a reduction in production of nickel pig iron due to the El Nino-related water shortage.  The volumes affected could be around 100kt of NPI production. Indonesia accounts for more than half of global nickel output, much of which is processed at industrial parks like Morowali.  Additionally, IMIP (majority owned by Chinese nickel giant Tsingshan) warned earlier this month that production could be cut by 30% to 40% if the water situation doesn’t improve. The reduction could help arrest a slide in nickel prices, which have declined around 18% on the London Metal Exchange from an early-May high.

With U.S. average diesel prices touching $6.57/gal, Senator Grassley [R Iowa] suggested “Why doesn’t President Trump put an embargo on diesel exports like presidents in the 70’s put embargoes on ag products because food prices were inflated.”

Quote of the week:  Treasury Secretary Bessent declared that by 9/23, “All the Iranian airlines will be shut down around the world…If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets, or you will be knocked out of the dollar system.”