• Federal Reserve Chairman Jerome Powell continued his Congressional testimony, promising that the central bank will not move hastily to reduce interest rates despite prodding from President Trump. Powell emphasized the need for additional time to see if the Trump administration’s proposed tariffs will lead to persistent inflation, with initial impacts expected this summer. The Federal Reserve’s benchmark rate has sat at 4.25% to 4.5% since December, and future changes will depend on how price pressures from tariffs evolve.

• In a major breakthrough, the NATO leaders agreed to increase defense spending to 5% of GDP, a major win for President Trump, who has time and again called on European allies to step up their security contributions with Russia becoming more aggressive. This record commitment of collective defense was made at their summit in The Hague.

• Locally, a new estimate by the Bipartisan Policy Center puts the US government’s “X date” – when it is no longer able to pay its bills because of the debt ceiling – at between August 15 and October 3, highlighting the need for urgent Congressional action to prevent potential financial crisis and recession. Despite these reservations, US long-term bond funds attracted a record $7.4 billion in May, reversing April outflows and indicating investors are seeking the shield of higher-yielding debt.