Cleveland Federal Reserve Bank President Loretta Mester backed the central bank to raise interest rates by half a percentage point at each of the next two policy meetings in an effort to stem a sharp rise in inflation. "Barring some big surprises, I expect it would be appropriate to raise the policy rate by another 50 basis points at each of our next two meetings," Mester said in a prepared speech for the International Research Forum on Monetary Policy on Friday. stated in the draft. The Fed raised interest rates by half a percentage point earlier this month, and Chairman Jerome Powell told reporters that action of a similar magnitude was an option at the next two meetings in June and July. By September, the Federal Open Market Committee (FOMC) should assess whether more needs to be done to curb inflation, Mester said.

U.S. consumer confidence fell to its lowest level since 2011 in early May, as persistent worries about inflation dented Americans’ views on the economy. The confidence index fell to 59.1 from 65.2 in April, data from the University of Michigan showed on Friday. The number was below the expectations of all economists polled by Bloomberg, with a median forecast of 64. Consumer confidence, a measure of current conditions, fell to a 13-year low of 63.6, while a measure of future expectations fell 6.2 points, erasing most of April's gains. Consumers expect consumer prices to rise 5.4 percent next year, holding at a four-decade high for the third straight month. They expect prices to rise at an annual rate of 3% over the next five to 10 years, unchanged from April. "Inflation remains high on consumers' minds," survey director Joanne Hsu said in a statement. "They referred to inflation throughout the investigation period, regardless of whether these concerns related to their own financial situation, economic outlook or purchasing conditions."

Goldman Sachs senior chairman Lloyd Blankfein urged businesses and consumers to prepare for a U.S. recession, calling it a "very, very high risk." "If I were running a big company, I'd be well prepared for it," Blankfein said Sunday on CBS' "Face the Nation." "If I were a consumer, I would be prepared." A recession "is not doomed," he said, and there is a "narrow path" to avoid it. The former Goldman Sachs CEO said the Fed has "very powerful tools" to curb inflation and has been "responding well." High oil prices and shortages of baby formula underlined Americans' unease, with U.S. consumer confidence falling to its lowest level since 2011 in early May. U.S. consumer prices rose 8.3% in April from a year earlier, a slight slowdown from March but still one of the fastest growth rates in decades.

The European Union cut its 2022 euro zone economic growth forecast and nearly doubled its inflation forecast, according to a new draft economic outlook. The European Commission will forecast GDP growth of 2.7% in 2022 and 2.3% in 2023, according to a draft seen by Bloomberg. This is the first forecast by the European Commission since the outbreak of the Russian-Ukrainian war; the previous forecasts in February were 4% and 2.7% respectively. Regarding inflation, the European Commission expects inflation to be 6.1% this year and 2.7% next year, compared with previous forecasts of 3.5% and 1.7%. The forecast has yet to be finalized and could still be revised ahead of the European Commission's official release on Monday.

A senior Iranian official said Iran was capable of doubling its oil exports if there was enough demand, even though talks on the Iran nuclear deal have stalled. Mohsen Khojastehmehr, managing director of the National Iranian Oil Company, told reporters in Tehran on Saturday that Iran would "do its best to regain market share in crude oil and bring back customers". While Iran has not released data on oil production or exports, analysts estimate Iran exports as much as 1 million barrels per day. The government's budget plan forecasts exports of 1.4 million bpd in the year to March 2023.

The People's Bank of China cut the lower limit of personal housing loan interest rates for first-time homebuyers by 20 basis points. The People's Bank of China stated in the announcement that the lower limit of the interest rate for commercial personal housing loans for the first set of housing will be adjusted to not lower than the market quoted interest rate for loans of the corresponding term minus 20 basis points. The five-year LPR, which is a mortgage reference, is now at 4.6% after the bank cut it by five basis points in January. The People's Bank of China stated that the adjustment is to support rigid and improved housing demand and promote the steady and healthy development of the real estate market, and reiterated that "houses are for living in, not for speculation." The lower limit of the interest rate policy for commercial personal housing loans for two sets of housing shall be implemented in accordance with the current regulations.

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