Wealthion Macro Bites 5-5

The fragile Middle Eastern truce was strained on Monday as the U.S. and Iran exchanged fire in the Gulf. The U.S. military announced that Apache helicopters and F-16 fighter jets had destroyed six Iranian small boats and intercepted cruise missiles and drones fired at the USS Truxtun and USS Mason Naval destroyers transiting the Strait of Hormuz. Iranian Parliament Speaker Mohammad Qalibaf accused the U.S. of breaching the 4-week-old ceasefire, “We know well that the continuation of the current situation is unbearable for the United States, while we have not even begun yet.”

In an effort to bolster crucial domestic manufacturing sectors under weight of Trump tariffs, Canada’s Minister of Industry Melanie Joly announced on Monday a C$1B loan program for industries that manufacture and export products containing steel, aluminum or copper. The Business Development Bank of Canada will disburse the loans in amounts of C$2M to C$5M over a three-year period at “favorable terms.” Joly stated, “The steel, aluminum and copper sectors are key to our economy, key to our manufacturing sector and key to our sovereignty.”

Hormuz ripple watch: The WSJ reports that soaring U.S. costs of primary aluminum from smelters (up 90% y/y) has caused Ford to double its expected ’26 commodity costs from $1B to $2B. Ford has been the auto industry’s largest aluminum buyer since switching the F-150 exterior from steel to aluminum in 2014 to comply with federal fuel economy regulations. While global aluminum prices currently stand at $3,500/t, tariff and delivery related charges raise the price to $6,100/t (vs. $3,220 a year ago) for U.S. automakers. Ford sold 160k F-Series trucks in Q1 (down from 190k in Q1 ’25).

We continue to believe the A-B-C reasoning of higher oil prices and higher inflation resulting in central bank tightening is misguided. With this much legacy debt in the financial system and a negative U.S. net-national savings rate, we find probabilities for ’26 rate hikes slim. Along these lines, New York Fed President John Williams said U.S. monetary policy is well-positioned. “I don’t see anything in the data today that suggests the need for a rate hike in the near time.”

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