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The Federal Reserve has proposed setting up limited "payment accounts" for certain institutions. The agency is encouraging Federal Reserve banks to suspend decisions to grant non-traditional accounts until they have finalized their new policy.

U.S. Treasury Secretary Bessenter: Discussed the Iran issue with the Qatari Finance Minister in Paris.

Google (GOOG.O): Will establish a $20 million energy impact fund.

Google will invest $15 billion in infrastructure in Missouri, including building a data center in New Florence, Montgomery County.

Google has signed a capacity commitment framework agreement with Amorim to support the development of more than 500 megawatts of additional power generation capacity.

According to The Information: A U.S. government framework requires AI labs to share models up to 90 days before their release; the government may sign an executive order as early as Thursday to establish the framework.

Hang Seng Index futures closed up 0.73% at 25,761 points in overnight trading, a premium of 110 points.

On May 21, the minutes of the Federal Reserve meeting revealed that regarding the outlook for monetary policy, participants generally agreed that persistently high inflation and uncertainty surrounding the duration and economic impact of the Middle East conflict might necessitate maintaining the current policy stance for a longer period than expected. Some participants emphasized that a reduction in the target range for the federal funds rate might be appropriate once clear signs emerge that the downward trend in inflation has steadily resumed, or signs of further weakness in the labor market appear. However, most participants noted that if inflation persists above 2%, some tightening measures might be necessary. To address this scenario, many participants expressed a desire to remove language from the post-meeting statement that suggested a possible shift towards easing in future interest rate decisions. Participants pointed out that monetary policy is not static, and future policy decisions will depend on the specific circumstances of each meeting.

On May 21, the minutes of the Federal Reserve meeting revealed that participants expected high energy prices to continue to exert upward pressure on overall inflation in the near term. Participants generally anticipated that the impact of tariffs on core goods inflation would gradually diminish throughout the year. However, some participants noted that tariff rates could potentially rise further above current levels, leading to greater upward pressure on inflation. Some participants emphasized that after several consecutive years of inflation exceeding 2%, high inflation could have a greater impact on wage and price-setting decisions. Almost all participants noted that the Middle East conflict could persist for a long time, or even after the conflict ends, oil and other commodity prices could remain high for longer than expected. In this scenario, participants expected that supply chain disruptions, high energy prices, or the passing on of rising input costs to other prices would continue to push up inflation. The vast majority of participants indicated that the risk of inflation returning to the Committee's 2% target level might be increased, potentially taking longer than previously anticipated.

On May 21, Federal Reserve staff maintained that the uncertainty surrounding forecasts remained high, given the potential economic consequences of the Middle East conflict and the application of artificial intelligence. Overall, the risks to employment and real GDP growth forecasts were considered skewed to the downside. Risks to inflation forecasts were considered skewed to the upside: inflation had been well above 2% for the past five years, the Middle East conflict could lead to further inflationary pressures, and upward price pressures were emerging in some categories that appeared unrelated to tariffs or energy prices. Therefore, staff believed that inflation could persist longer than expected, a significant risk.

May 21 - Federal Reserve meeting minutes revealed that staff's inflation forecasts for this year are higher than those from the March meeting, reflecting the latest data, rising energy prices, and other impacts of the Middle East conflict, factors expected to push up consumer price inflation. Inflation is expected to slow after the first half of this year as the economic impacts of various conflict-related factors gradually subside and the transmission of tariff increases to inflation weakens; by the end of next year, the inflation rate is projected to be close to 2%.

On May 21, Federal Reserve staff assessed the economic situation, noting that information gathered at the time of the meeting indicated that real GDP growth had rebounded somewhat in the first quarter as the effects of the federal government shutdown gradually subsided. Trade data up to March showed that net exports were the main drag on U.S. GDP growth in the first quarter: merchandise exports rebounded strongly from a decline in the fourth quarter of 2025, but merchandise imports saw a more significant increase, driven by growth in high-tech goods.

On May 21, the minutes of the Federal Reserve meeting revealed that staff's outlook on economic activity was slightly stronger than their forecasts at the March meeting. Real GDP growth is expected to be slightly above potential growth in the coming years. The unemployment rate is projected to be close to staff's long-term estimate this year and next, and slightly below that level around 2028. Staff's inflation forecast for this year is higher than at the March meeting, due to the latest data, higher energy prices, and other Middle East conflict effects expected to push up consumer price inflation. Inflation is expected to begin to slow after the first half of this year as the economic impact of various conflict-related factors gradually fades and the transmission of higher tariffs to inflation weakens; inflation is projected to be close to 2% by the end of next year. Overall, the risks to employment and real GDP growth forecasts are skewed to the downside, while the risks to inflation forecasts are skewed to the upside: inflation has been significantly above 2% for the past five years, Middle East conflicts could further push up inflation, and new price pressures are emerging in some categories unrelated to tariffs or energy prices. Therefore, staff consider the possibility of inflation being more persistent than expected a risk worthy of close attention.

Trump: (Regarding Iran) We are dealing with rational people.

On May 21st, the minutes of the Federal Reserve meeting revealed that, regarding monetary policy expectations, the Fed's head of market operations noted that market expectations still suggest market participants anticipate little change in the target range for the federal funds rate this year, with option prices implying a roughly 30% probability of a rate hike in the first quarter of 2027. In the open market operations survey, the median of the mode path continues to indicate two 25-basis-point rate cuts over the next year, but respondents now expect the cuts to occur later than in the previous survey, anticipating cuts in the third or fourth quarter of 2026 and the first quarter of 2027.

On May 21, the minutes of the Federal Reserve's April meeting revealed that administrators updated their assessment of the stability of the U.S. financial system. Overall, financial vulnerabilities in the U.S. financial system remain "concerning." Asset valuation pressures are at high levels, with housing valuation metrics near historical highs. Vulnerabilities related to non-financial corporate and household debt were assessed as "moderate." Household balance sheets remain strong, with substantial home equity. While overall corporate debt growth has been relatively moderate in recent years, private lending has grown rapidly. Some private lending facilities experienced net outflows in the first quarter, partly due to market concerns that AI could disrupt business models in certain industries, particularly the software sector, thereby impacting credit quality. Vulnerabilities related to leverage in the financial sector were assessed as "concerning." Hedge fund leverage remains high, particularly in leveraged trading in the U.S. Treasury market. Life insurance companies also maintain high leverage ratios. In contrast, bank regulatory capital ratios remain high relative to historical levels. However, the market capitalization-adjusted bank capital ratio declined in the first quarter and remains below pre-2022 levels, although significantly higher than the lows of several years ago. Bank asset duration has returned to pre-pandemic levels, indicating that their interest rate risk exposure has lessened compared to recent years. Vulnerabilities related to funding risk are assessed as "moderate."

Trump: We remember Cuba. The indictment of former Cuban President Castro was a very important moment. Cuba is a failed state, and their future is unpredictable.

Citigroup CEO Frazier: The United States, Canada, and Brazil, as net oil exporters, are better able to cope with high energy prices.