SpaceX Starship, NBA Finals, and Best Airlines.

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Big Stories

The End of Coordinated Rate Hikes

After two years of raising interest rates together to fight inflation, major central banks are now going in different directions.

• The European Central Bank (ECB) and Bank of Canada recently cut rates, signaling a shift away from the hawkish stance adopted by the US Federal Reserve, which is expected to maintain rates next week. Some predict institutions like the ECB are potentially entering a rate-cutting cycle, while others like the Fed remain cautious.

• The ECB justified its rate cut by pointing to signs of inflation easing. Central banks are stressing their responsibility to adjust rates based on individual economic conditions. However, concerns about global economic spillovers, particularly currency fluctuations, make them wary of moving rates too far apart.

• The Fed is unlikely to change rates next week, but recent market shifts suggest potential future rate cuts — bond yields and Fed futures pricing indicate a higher probability of rate cuts by September compared to previous weeks.

• Major economic data will be released next week (May jobs report, May CPI), and the Fed's policy announcement, including projections and Jerome Powell's press conference.

• Bottom Line: Next week we'll know if the Fed follows the ECB and Bank of Canada's easing interest rate stance, or sticks to its plan of keeping them the same.

SpaceX’s Starship completes test flight without exploding

SpaceX's Starship completed its first full test flight, lasting an hour and splashing down in the ocean.

• This was the longest and most successful flight of the massive rocket, following three previous attempts that ended in explosions. Despite losing some tiles and damaging a flap, the spacecraft remained intact and transmitted data throughout the flight.

• The road to this success wasn't smooth. Earlier test flights encountered critical issues that destroyed the Starship spacecraft and its booster. SpaceX engineers had to implement software upgrades and refine the rocket's re-entry maneuvers before the Federal Aviation Administration approved this fourth launch.

• The test flight is a significant milestone for SpaceX's goal of using Starship for crewed missions to the Moon and Mars. NASA has partnered with SpaceX for lunar missions and private space tourism ventures are also underway.

Russia Plans Naval Exercises in the Caribbean

This summer, Russia plans to send combat ships to the Caribbean for naval exercises, possibly stopping in Cuba and Venezuela.

• The exercises are part of Russia’s regular military activities and will lead up to a larger global naval exercise in the fall. While the U.S. Navy will monitor these exercises, they do not see the limited number of ships and planes involved as a threat.

• Tensions between the U.S. and Russia have risen since Russia invaded Ukraine in 2022, with increased Russian naval activity seen as a response to U.S. support for Ukraine. The U.S. has briefed lawmakers about these activities and remains unconcerned, viewing the deployments as routine and non-threatening. Despite regular appearances of Russian ships in the western hemisphere from 2013 to 2020, maintaining these operations is costly for Russia’s aging navy.

• Meanwhile, Russia’s President Vladimir Putin criticized the West for giving long-range weapons to Ukraine, warning that Moscow could provide similar weapons to other countries to attack Western targets. Putin made these comments after a U.S. senator and a Western official confirmed that Ukraine used American-made weapons to strike inside Russia. The attacks were allowed under new guidelines from President Biden, permitting American arms to be used for defending Kharkiv, Ukraine’s second-largest city.

Little Stories

• The Boston Celtics dominated the Dallas Mavericks in the first game of the 2024 NBA Finals. Boston jumped out to a big lead early and held off a Dallas comeback attempt in the 3rd quarter to win 107-89. Luka Doncic had a good game for Dallas but the Celtics' defense shut down the rest of the Mavericks.. (More)

• An Israeli strike on a school sheltering displaced Palestinians in central Gaza killed over 30 people, including 23 women and children, according to local health officials. The Israeli military said Hamas militants were using the school. (More)

• The FDA has lifted its ban on Juul e-cigarettes to review new legal and company information. This doesn’t approve Juul for sale yet but suggests federal approval is possible. Juul, which held 37% of the US market in 2022, was pulled from shelves and has faced lawsuits for marketing to teens. (More)

• A federal judge ordered former Trump adviser Steve Bannon to start his four-month prison sentence by July 1. Bannon was sentenced for contempt of Congress in 2022 after ignoring a subpoena from the Jan. 6 committee. He claimed executive privilege even though he was a private citizen at the time. (More)

• The New York architect accused of murdering multiple women and leaving their bodies along the Long Island coast had a “blueprint” of his crimes on his computer, prosecutors said on Thursday. They charged Rex Heuermann with two more murders in addition to the four other women he murdered in the Gilgo Beach serial killings. (More)

Extra Credit

Qatar Airlines tops the list of best airlines in the world.

80th anniversary of D-Day in pictures. 

Six places to score discounts on National Donut Day. 

Ranking the most beautiful ballparks in Major League Baseball.