In April, the long-term performance outlook for the Global Market Index (GMI) saw a modest improvement. The estimated annualized return for the benchmark now exceeds 7%, positioning it at the upper end of recent forecasts. However, it’s important to note that this figure represents a decline when compared to the GMI’s performance over the past decade; significantly softer returns are anticipated in the coming years.
● Finishing the Inflation Job and New Challenges for Monetary Policy
Michael D. Bordo (editor), et al.
Summary via publisher (Hoover Institution Press)
How should the Federal Reserve navigate the completion of its inflation-reduction efforts while preparing for a rapidly evolving global landscape? This question is central to the essays compiled in Finishing the Inflation Job and New Challenges for Monetary Policy, which arises from discussions at the annual Hoover Institution Monetary Policy Conference held on May 9, 2025. The conference explores various significant challenges affecting monetary policy both domestically and internationally. Hoover Director Condoleezza Rice expressed in her keynote address that “the United States is experiencing an avalanche of uncertainty,” casting doubt on the existing international order, including the U.S. role in it.
Following a challenging selloff in March, markets showed signs of recovery in April. While some gains may appear minimal upon closer inspection, the overall performance was positive, providing a lift to all major asset classes, as indicated by results from a range of ETFs.
The bond market seems to be losing confidence in its ability to contain inflation risks arising from ongoing conflict in the Middle East. While the Federal Reserve maintains its wait-and-see approach, several crucial Treasury yields are reacting more decisively.
The Federal Reserve is anticipated to maintain its current target interest rate in an upcoming policy announcement. However, this stable outlook masks a complex inflation scenario that continues to unsettle the bond market.
Securing Senate approval may turn out to be the simpler task.
The nomination process for Kevin Warsh to succeed Jerome Powell as the next chairman of the Federal Reserve has progressed smoothly, particularly after Sen. Thom Tillis withdrew his objections following the Department of Justice’s closure of its investigation into Powell. The Senate Banking Committee has scheduled a vote on Warsh, which is expected to pass, enabling the nomination to advance to the full Senate. However, this will mark the beginning of more daunting challenges ahead. Continue reading
This week’s initial estimate of first-quarter GDP suggests that economic activity is poised for a rebound, supported by the median projections collected by CapitalSpectator.com. However, any enthusiasm for recovery is likely to be tempered as the ongoing US-Iran conflict continues to cast a shadow on the inflation and growth outlook for the second quarter and beyond.
● Prophecy: Prediction, Power, and the Fight for the Future, from Ancient Oracles to AI
Carissa Véliz
Review via The Wall Street Journal
Recent fluctuations in oil and gas prices have been so extreme that they appear to defy the usual volatility markers. Curiously, these changes have not stemmed from real supply scenarios but rather from speculative beliefs about how the Middle East conflict will play out. In her book, Prophecy, Carissa Véliz, who teaches at Oxford University’s Institute for Ethics in AI, examines how society’s reliance on predictions permeates various sectors, ultimately highlighting the importance of skepticism when evaluating most forecasts.
Who Wins and Who Loses In Prediction Markets? Evidence from Polymarket
Pat Akey (ESSEC Business School), et al.
April 2026
This research examines pricing efficiency in decentralized prediction markets by comparing market-implied probabilities from Polymarket to benchmarks derived from option-implied risk-neutral distributions from the derivatives market. The study focuses on Bitcoin and Ethereum prediction bets and reveals that while Polymarket prices generally align with these benchmarks, significant price discrepancies occur, often driven by behavioral factors and market frictions. These differences are most pronounced during extreme events, periods of high market volatility, and in response to major macroeconomic shocks, highlighting the roles of sentiment, attention, and blockchain-specific risks. Overall, the findings suggest both efficiency and behavioral distortions present in prediction markets.
The ongoing conflict in Iran has been identified as posing “the biggest energy security threat in history,” as noted by Fatih Birol, the head of the International Energy Agency (IEA), in a recent interview with CNBC. However, the ramifications of this crisis will not be felt uniformly across all sectors, which likely contributes to the diverse reactions observed in global stock markets so far.
