The Fed's Mistake | Macro Mondays: July 6, 2026

June eurozone inflation came in 0.2–0.3 percentage points below economists’ consensus, with softness extending beyond energy. Christine Lagarde acknowledged that inflation had undershot the European Central Bank’s projections; Andreas said oil was already below the ECB’s mildest scenario and other inflation measures were also weaker than expected. The breadth of the downside surprise supports the view that price pressures are easing more broadly.

For the upcoming U.S. inflation report, inflation-swap pricing was substantially below surveyed economists’ expectations, and Andreas’s own nowcast was also low. He sided with market pricing and remained confident that inflation was rolling over, while noting that reversals in leisure and hospitality hiring could create technical softness in some services categories after May’s employment effects. He sees a central-bank pivot after the summer as likely, though the near-term inflation data still matter.

Oil has fallen back to the low $70s, near or below levels before the Iran war, despite forecasts that it could reach $200. Andreas exited energy loans in the first week of April and shifted into semiconductors. He welcomes the prospect of an oil glut, but said the next price move is unclear because opposing forces remain in play. The market was described as more than balanced, with possible oversupply and more oil on water than ever before even after adjusting for sanctions.

Tanker crossings through the strait remain well below pre-war levels, but the speakers said little of the oil on water is stuck there: around 7–8 million barrels a day leave the region through pipelines, trucks, and other routes. Additional bypass capacity could take 6, 12, or 18 months to develop, potentially reducing the strait’s long-term geopolitical importance. One proposed pipeline across the Arabian desert would likely involve Chinese participation.

China remains on a buying strike and can afford to wait, with Russian crude available at decent prices when it resumes purchases. The speakers think China’s return is not far off if prices fall enough; renewed buying could support an oil-price floor and become a major driver in the second half of the year. Europe, meanwhile, has held back on natural-gas purchases during the usual storage-filling season because prices are elevated and supply is limited.

South Korean high-bandwidth-memory exports rose 32% month over month in June, while HBM and DRAM margins, considered apart from Samsung and Hynix’s other businesses, were approaching 90%. Andreas sees memory demand accelerating rather than rolling over and expects Samsung to beat expectations again in its quarterly results. Strong operating activity does not guarantee that semiconductor stocks have further to run, however: markets can peak before activity does if investor risk appetite changes.

Andreas said Meta’s effort to sell compute could grow into a high-margin cloud business like Amazon Web Services, rather than indicate that the company is ending its capacity buildout. Its plans remain unclear, and he doubts Meta has already abandoned them given that it raised capex projections seven or eight weeks earlier. Hynix plans to tap dollar markets through a depository receipt, which Andreas said could improve access and liquidity for U.S. investors; he also sees the move as a possible sign that Hynix may not sustain its current valuation for years.