The $300 Billion Wager: Inside The Private Fund At The Center Of The U.S.-Iran Framework

A proposed $300 billion investment fund has emerged as one of the most consequential-and politically explosive-features of the U.S.-Iran framework agreement, turning what began as a war-ending diplomatic effort into a test of whether private capital can be used as a substitute for reparations, sanctions relief and state-to-state reconstruction aid. This, of course, is the part where we 'give' Iran $300 billion - though what it actually is and does hasn't been disclosed until now. This isn't unfrozen Iranian assets, and is separate from parallel talks over sanctions relief. Read on and decide for yourself whether Reuters is simply polishing a turd. 

An Iranian woman waves a national flag at Valiasr Square in Tehran. Photograph: Atta Kenare/AFP/Getty Images

According to Reuters, the fund is not designed as a direct U.S. payment to Tehran, nor as a government-backed reparations program. It is described instead as a private investment vehicle intended to unlock large-scale capital for Iran once a final U.S.-Iran deal is signed. More than half of the $300 billion has already been committed, a source with direct knowledge of the arrangement told Reuters, with pledged financing spanning companies and investors from the United States, Gulf Arab states, Asia, South America and Africa.

The fund, reportedly to be called the Reconstruction and Development Fund, would target sectors central to Iran’s postwar recovery and long-term economic reintegration: energy, logistics, manufacturing, transport and broader infrastructure. It would not become operational immediately. Instead, the current memorandum of understanding is expected to structure a 60-day negotiating period during which fund administrators, Iranian officials and prospective investors would scope projects and establish terms.

That timing is crucial. The fund is not the deal itself. It is a prize held behind a series of political, nuclear and security conditions.

From reparations demand to investment vehicle

The financial mechanism appears to have emerged from a failed demand for compensation. Reuters reported that Tehran initially sought $400 billion from Washington for war damages, a request the United States rejected. The compromise was to shift the discussion away from U.S.-paid reparations and toward a private investment structure that could be sold differently to each side.

For Iran, the fund offers a path to reconstruction and economic revival after years of sanctions and months of war. For Washington, it creates a performance-based incentive without requiring Congress or U.S. taxpayers to finance Iran’s recovery. For Gulf states and multinational firms, it could create controlled access to one of the Middle East’s largest and most underdeveloped markets.

That distinction-investment, not indemnity-is the political heart of the arrangement. The White House can argue that Iran is not being handed American money. Tehran can argue that it extracted a massive reconstruction pathway from a conflict it says it survived. Investors can argue that they are not subsidizing Iran’s state but positioning themselves for a potential opening of a long-isolated economy.

But that structure also creates ambiguity. A private fund of this size cannot function in a vacuum. It would depend on sanctions relief, banking access, legal clarity, security guarantees and a durable political settlement. Without those, pledged capital remains theoretical.

The broader deal: Hormuz, sanctions and the nuclear file

The fund sits inside a wider U.S.-Iran framework designed to end the war that began after U.S. and Israeli strikes on Iran on February 28. The framework is intended to halt the U.S. blockade of Iran, reopen the Strait of Hormuz and begin a new negotiating track on Iran’s nuclear program, sanctions relief and regional security.

The Strait of Hormuz is central to the urgency. Before the conflict, the waterway handled a major share of global oil and gas shipments. Its closure and militarization created pressure on energy markets, shipping, insurers and governments dependent on Gulf exports. Reopening the strait is therefore not simply a diplomatic concession; it is a global economic priority.

U.S. officials expect traffic through Hormuz to rise gradually, not instantly - so shipping lanes, insurance markets, naval risk, mines, damaged infrastructure and commercial confidence cannot be restored by proclamation. Even if the formal agreement is signed, physical normalization may lag diplomatic announcements.

What Iran must give up

The proposed fund is conditional. Vice President JD Vance has publicly framed the arrangement as a reward Iran could access only if it meets strict obligations. Those obligations include dismantling or permanently constraining its nuclear weapons pathway, eliminating its stockpile of enriched material and accepting a stringent inspection and enforcement regime.

That framing is intended to answer critics who argue that the deal rewards Tehran for escalation. The administration’s argument is that Iran receives nothing meaningful merely for signing. Instead, the framework establishes a staged bargain: Iran opens Hormuz, accepts nuclear limits and permits verification; in return, it can receive sanctions relief, access to frozen assets and eventually participation in a massive private reconstruction fund.

The distinction between the $300 billion fund and frozen Iranian assets is important. Reuters reports that the fund is separate from parallel talks over sanctions relief and the release of Iranian sovereign assets held abroad. Those are different mechanisms with different timelines. Frozen funds involve Iran’s own oil revenues and reserves trapped in foreign banking systems. The $300 billion fund, by contrast, is described as new private investment into Iran.

That separation may be legally and politically useful, but it does not eliminate the core problem: investors will not move at scale unless they believe sanctions relief is real, durable and enforceable.

Why Iran is attractive-and why it has been untouchable

On paper, Iran is exactly the kind of market global capital would normally chase. It has one of the world’s largest combined oil and gas resource bases, a population of more than 92 million, a relatively educated workforce, a diversified industrial base and major needs in refining, petrochemicals, transport, aviation, steel, ports, power and logistics.

But for four decades, Iran has been largely frozen out of global capital markets. U.S. sanctions, secondary sanctions risk, compliance uncertainty and fear of future penalties have kept most major Western banks and corporations away. Even after the 2015 nuclear deal, many large financial institutions remained reluctant to re-enter Iran because they feared violating remaining restrictions or being punished later if U.S. policy changed.

That history is a warning. A commitment to invest is not the same as an executed project. A memorandum of understanding is not the same as bankable legal certainty. And a fund administrator cannot neutralize the risk that a future U.S. administration-or even the current one-could reverse course.

According to Reuters, the deal’s “cash sweeteners” should be treated cautiously. The central contradiction is simple: Iran wants proof of economic benefit before making irreversible concessions, while Washington wants Iranian compliance before allowing major financial benefits. That sequencing problem has bedeviled U.S.-Iran diplomacy for years.

Israel and the regional security dilemma

Israel’s position remains one of the biggest uncertainties. Reuters has reported that Israel is not a party to the U.S.-Iran memorandum and that Israeli officials have insisted they retain freedom of action against threats. Iran, meanwhile, has linked regional calm to Israeli conduct in Lebanon and beyond.

This creates a fragile triangle. The U.S. may be able to negotiate with Iran over Hormuz and nuclear inspections, but it cannot automatically bind Israel to every term Tehran wants. If Israel continues operations in Lebanon or strikes Iranian-linked targets, Tehran may claim the broader bargain has been violated. If Iran or its allies resume attacks, Israel may escalate. Either path could undermine investor confidence before the fund is even created.

That is why the $300 billion headline may obscure the more important question: can the security architecture hold long enough for any money to matter?

Tyler Durden Wed, 06/17/2026 - 11:05

Cushing Stocks Crash To 'Tank Bottoms', Seasonally Lowest Since 2005; SPR Sees Another Huge Drain

Oil prices have tumbled in recent days as optimism grew there would be a lasting Middle East peace agreement, which would mean supplies would be back on track - but investors are taking a breather today with prices marginally higher this morning, rising off three month lows (and the 200DMA) after Trump threatened to 'start bombing again' if he doesn't like the deal (or how Iran is behaving). Solid US macro data also helped lift oil prices (demand).

"The collapse in oil has changed the tone of global markets, supporting bonds (prices) and reducing near-term inflation pressure," noted Tickmill market strategist Patrick Munnelly.

Oil industry experts and shipping companies have warned that it will take time to restore normal operations after the waterway's near shutdown.

Crude inventories held by OECD member countries fell in May to the lowest level since 1990 as governments drew down stocks to offset the blockage of Gulf crude shipments during the Middle East war, the International Energy Agency said Wednesday.

The drawdown since the start of the conflict has reached 163 million barrels in the Organisation for Economic Cooperation and Development club of wealthy countries, the IEA said in its monthly report.

And so, all eyes on the official situation in the US today for any signs of those drawdowns slowing (API's report suggest not).

API

• Crude -8.33mm

• Cushing -1.5mm

• Gasoline +2.47mm

• Distillates -461k

DOE

• Crude -8.263mm (-3.5mm exp, -5.2mm whisp)

• Cushing -1.606mm

• Gasoline -906k

• Distillates +951k

Crude inventories fell for the 8th straight week (-8.3mm) and Cushing saw another major drop in stocks. Products were mixed...

Source: Bloomberg

At Cushing, Oklahoma, stockpiles declined for the eighth straight week, taking inventories to just above 20 million barrels. That’s the lowest inventories have been at the storage hub since October 2014, and takes us to what are considered essentially 'tank-bottoms', the point at which the hub is unable to fully operate. 

This is the lowest level for Cushing stocks for this time of year since 2005...

Source: Bloomberg

The Strategic Petroleum Reserve saw yet another massive drawdown (8.9mm barrels), down almost 75mm barrels since the war started...

Source: Bloomberg

The US rig count continues to rise along with US Crude Production (now back near record highs)...

Source: Bloomberg

WTI was trading around $76.50 ahead of the official data and rallied uyp to $77 on the report...

Finally, we note that The International Energy Agency warned on Wednesday that the conflict is causing a bigger hit to demand than previously thought, while adding in its first look at next year’s balances that it expects a renewed glut.

Crude prices are down by almost 40% from their peak during the conflict. Producers, shippers and traders are now assessing whether the interim peace agreement will prove to be durable, and how long it will take for vessel transits of the Hormuz chokepoint to be revived in earnest. Sticking points remain, including opposition in Israel, which launched the war with the US in late February.

But the scale of the price drop is already quashing concerns about a further energy-induced inflationary spike.

“This decline is not merely a reduction in the geopolitical risk premium; it is a recalibration of the global oil balance for the months ahead,” said Tamas Varga, an oil analyst at brokerage PVM.

“With oil prices tumbling, inflation expectations are likely to decline, while increases in consumer and producer prices should moderate.”

In addition to the extra supply, the selling pressure that has hit oil markets has been compounded by a clutch of factors.

Technical traders have added to bearish wagers but today's rebound comes right as Brent (briefly) dropped below its 200-day moving average for the first time since February.

Tyler Durden Wed, 06/17/2026 - 10:41

Ease In Our Time

By Micael Every, Global Strategist at Rabobank

Yesterday saw the BOJ hike rates to 1%, the highest level since 1995, and the RBA hold at 4.35%, with some chatter of the next move being down, not up, despite inflation running way above 2%. Today it’s the turn of new Fed Chair Warsh who, like the other central banks, has to deal with a geopolitical backdrop which may or may not allow for any monetary policy easing.

There, the text of the 14-point US-Iran MoU has been leaked ahead of its Swiss signing ceremony on Friday: ironically, it says “Ease in our time.” It allows Iran to immediately sell oil again, including the waiver of all banking and transport sanctions (though US legislation may prove an obstacle re: IRGC terror designation). It also includes the private sector $300bn investment fund for Iran, which Reuters claims has already been half committed.

What does this imply? It’s either a giant TACO that markets look past the full implications of to embrace; or a can-kick until the midterms (after which what?); or the Middle Eastern dish maqluba --not muqlaba (‘confrontation’)-- layers of rice, veggies, and meat prepared one way up, then flipped when served. In other words, a behind-the-scenes-and-rhetoric normalisation from Iran. Ultimately, the proof of that dish is in the eating, and there are still many points to choke on.

NBC reports Iran has continued to fire multiple drones toward ships in Hormuz since the MoU was agreed, with the US shooting them down. The US Navy underlines the Strait still holds “substantial” risk. Insurers therefore remain wary, and as noted yesterday, maritime traffic is more likely to flood out than back in ahead.

Iran is demanding an Israeli withdrawal from Lebanon, which Israel states it will not and just struck Hezbollah again, with Iran now threatening to respond if Israel continues. Trump yesterday suggested Syria, with a history of looking at Lebanon as its own, should take care of Hezbollah (which the Lebanese government wants to disarm, but is unable to), not Israel. Given Syrian president Al-Sharaa’s Al Qaeda background and links to Turkey, with its history of looking at Syria as part of the Ottoman Empire, this does not seem the panacea some might hope for.

The MoU text is vague on uranium: it “will be adequately addressed in a final agreement.” Again, is it maqluba (a deal, flipping the rice) or muqlaba (no deal, flipping the peace)? China is warning the next phase of US-Iran talks will be “more difficult,” which is very clear.

The US is also weighing boosting ties with the Palestinian Authority as it seeks to advance its Gaza Board of Peace and an expanded Abraham Accords, while Israeli PM Netanyahu is said to be dropping election campaign posters showing him alongside Trump, as his opponents are all as hawkish as him re: Hezbollah and Iran, if not on the Palestinian issue.

In short, there are so many layers of rice, veggies, and meat here that’s not clear if anyone can flip the dish without spilling the food: and that’s just the Middle East, which is a current pivot point within a larger global negotiation.

At the G7, Trump promised to support Ukraine and sanction Russia – if Europe helps secure Hormuz. First, with minesweepers… but then with military patrols that offer GCC states a layer of protection (alongside Ukrainian anti-drone tech) should war with Iran restart after the US mid-term elections? Bloomberg reports Europeans are wary of committing naval power quickly. So are South Korea and Japan – but they likely all have a role to play.

Last week, Trump invoked the 1950 Defence Production Act regarding munitions, citing that “conditions exist which may pose a direct threat to the national defence or its preparedness programs," due to "limited production capacity, fragile supply chains, long-lead dependencies, and related production bottlenecks." What does he need this for if we are all friends now?

Elsewhere, the US is suggesting a ‘trusted partner’ AI scheme for its allies, extending what is currently US-only technology, a significant carrot. The European Parliament cleared the way for the EU-US trade deal - and Brussels is gearing up for a trade war with Beijing. Indeed, even as European discourse focuses on the US, it’s not hard to see the contrasting contours of US-EU cooperation in the Middle East and against China. Will it be transatlantic maqluba or muqlaba?

The US is also reaching out to Kazakhstan, offering to build local telecoms infrastructure. Central Asia looks increasingly contested space between Russia, the US, and China. And can Trump rebuild bridges with Indian PM Modi at the G7?

So much is in flux beyond oil, now back below $80 in time for the mid-terms. On which note, yes, ‘markets were right’ there – but to think it was market forces that kept market pricing of oil lower than feared until now is naïve: it was aggressive economic statecraft. If we see more Middle East war ahead, much more statecraft will be required.  

On that broader flux, that the FBI just arrested five people for an alleged plot to attack Trump’s White House lawn 80th birthday UFC event with explosives-laden drones and guns speaks to the zeitgeist.

So does the Wall Street Journal reporting that ‘A $40m Gold Heist Risks Exposing CIA’s Top-Secret Spy Programs’; as the Financial Times notes central banks are repatriating gold as global insecurity rises rather than storing bullion in other countries; and the Nikkei Asia shares that central banks expect their gold reserves to continue to rise as de-dollarization continues, with 84% of related survey respondents seeing such holdings increasing in the next five years.

And against that backdrop, the FT also notes that ‘The world is more dangerous. Why is risk cheaper?’, underlining that capital is piling into insurance because of high returns and low volatility (against our current backdrop!) which leaves some worried about mispricing.

Traditionally, they don’t have to worry because central banks are there to save the day. But right now, those knights in shining armour have a lot of other things to worry about: like swords and armour. Does that still allow them to just “ease in our time”?

Tyler Durden Wed, 06/17/2026 - 10:20

"Late Spring Buyer Rush": US Pending Home Sales Just Surged By The Most In Almost 2 Years

Pending home sales in the US were expected to rise for the fourth straight month in May and they did with a huge beat (+3.8% MoM vs +0.9% MoM exp - above the highest analysts estimate), which was slightly offset by a downward revision for April (from +1.4% to +0.3%).

That is the best monthly improvement in pending home sales since Sept 2024 and that lifted sales by just over 2% YoY.

“A late spring buyer rush - even with mortgage rates not budging - is an indication of pent-up housing demand and consumers’ acceptance of above-6% mortgage rates as the new normal,” NAR Chief Economist Lawrence Yun said in a release.

The Pending Home Sales Index is now at its highest since Nov 2025, after bouncing back from record lows in January...

There has been a notable decoupling between rates and pending sales with the recent rise in rates coinciding with a rise in sales (but of course, sales are lagged relative to rates, by typically a month or more)...

Pending sales climbed in all US regions, with the Northeast leading with an 8.7% increase over the month. Yun noted the Northeast is picking up following a period of low inventory and rising home prices.

As a reminder, because houses typically go under contract a month or two before they’re sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.

Tyler Durden Wed, 06/17/2026 - 10:07

DOJ Sues New York Health Officials Over Alleged Fraud In Medicaid Homecare Program

Authored by Aldgra Fredly via The Epoch Times,

The U.S. Department of Justice (DOJ) on June 16 sued New York health officials and a Georgia-based company over an alleged fraud scheme involving the state’s $10 billion Medicaid homecare program.

The lawsuit names state Health Commissioner James McDonald, state Medicaid Director Amir Bassiri, and financial management services company Public Partnerships LLC as defendants.

In its lawsuit, the DOJ asked the court to issue an injunction barring the defendants from making “false statements and misrepresentations” about New York’s Consumer Directed Personal Assistant Program (CDPAP) and prevent what it called the company’s “siphoning of funds from the federal coffers.”

“New York’s failure to police a favored vendor that unlawfully siphoned millions of dollars of Medicaid funding is egregious and betrays the public trust,” Assistant Attorney General Brett Shumate of the DOJ’s Civil Division said in a statement.

CDPAP is one of New York’s largest health benefit programs. It provides home care through lay caregivers to Medicaid patients with disabilities or significant medical needs.

The lawsuit states that more than 250,000 patients and more than 300,000 caregivers participated in the program as of 2024. That same year, the New York Legislature passed a statute consolidating management of CDPAP from hundreds of existing fiscal intermediaries to a single fiscal intermediary.

The DOJ alleged that the New York Health Department awarded Public Partnerships the contract to manage CDPAP through a “sham bid process” in late 2024.

The Justice Department accused Bassiri of being part ​of an effort to disqualify other qualified bidders after he had “personally scored” Public Partnerships’ successful bid.

According to the complaint, Bassiri was part of last-minute email exchanges with other states, in which Health Department officials said they were “under some sort of ‘pressure from our Governor’s Office’” to see if other bidders were qualified.

The DOJ accused the state health department of enabling the company to generate “millions of dollars in excess revenues” from the program by “billing at hourly rates in excess of those anticipated by New York prior to the contract award.”

The department said that Public Partnerships’ self-dealing and New York’s failure to enforce the contract’s terms erased the cost savings the program’s transition was expected to deliver.

“New York’s backroom deal with PPL has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb,” Assistant Attorney General Colin McDonald for the DOJ’s National Fraud Enforcement Division said in the statement.

Public Partnerships has denied the allegations. The company said in a statement to multiple news outlets that it won the contract “through a transparent, competitive process.”

“We strongly disagree with the characterizations in the complaint and will respond fully through the appropriate legal process,” the company said.

In a statement, the New York Department of Health called the lawsuit baseless and lacking merit.

The department said the courts have confirmed that the process of hiring Public Partnerships “was accomplished through a fair and legally sound competitive bidding process.”

It added: “We look forward to the day where these disingenuous attacks can stop and our partners in Washington can look to New York as a model for how to improve to control costs and root out abuses while preserving and improving quality of care.”

A spokesperson for New York Gov. Kathy ​Hochul said, “New York’s decision to move to a single fiscal intermediary has already saved taxpayers more than $1 billion while deterring ‌fraud, ⁠waste and abuse.”

Hochul is not a defendant and was not accused of wrongdoing.

The Epoch Times reached out to both McDonald and Bassiri for comment but did not receive a response by publication time.

Tyler Durden Wed, 06/17/2026 - 09:55

No FISA Without SAVE Act: Trump Calls Out 'Dumocrat' Double-Cross," Keeps Pulte As Acting DNI

Just two years after Donald Trump urged Congress to kill Section 702 of the Foreign Intelligence Surveillance Act while on the campaign trail, he's now livid that Democrats won't help Republicans pass it.

Trump took to Truth Social early Wednesday morning with a lengthy post accusing 'Dumocrats' of breaking a bipartisan deal on FISA reauthorization - and announced a series of moves that throw a wrench into Senate plans for both intelligence leadership and surveillance powers.

According to Trump, Republicans played themselves - after agreeing with Democrats to accelerate the removal of Acting DNI William Pulte (by fast-tracking Jay Clayton’s confirmation) in exchange for Democratic support on renewing FISA Section 702 surveillance powers. Now, however Democrats are threatening to vote against FISA anyway. 

“The Republicans wound up having fulfilled their commitment, but Dumocrats broke the Deal.”

As a result, Trump said he is canceling today’s Senate hearing for Jay Clayton as permanent DNI. He will not move Clayton out of his current role as U.S. Attorney for the Southern District of New York until Jamie McDonald (a Sullivan & Cromwell partner and Trump’s former personal lawyer, recently nominated to replace him at SDNY) is confirmed - including clearing the “blue slip” process.

In the meantime, Bill Pulte will remain as Acting Director of National Intelligence - who Trump picked to replace Tulsi Gabbard after she said in May she was leaving the administration in June to spend time with her husband following his cancer diagnosis. Pulte has been a controversial pick over his lack of intelligence experience - which led to Trump nominating U.S. Attorney for the Southern District of New York Jay Clayton to be the next DNI.

Southern District of New York U.S. Attorney Jay Clayton at Johnson Houses on Dec. 17, 2025. USAO Southern District of New York/Screenshot via The Epoch Times

Trump explicitly linked his approval of FISA renewal to passage of the SAVE America Act - his priority legislation requiring photo ID, proof of citizenship for voter registration, and strict limits on mail-in ballots.

“Therefore, to add a slight bit of intrigue but, for the Good of the Nation, and the People of our Country, I will not approve FISA without THE SAVE AMERICA ACT going along with it. Not complicated, actually, the Republicans fell into a trap.”

The SAVE America Act - which requires Americans to show proof of citizenship to register to vote and a valid ID to cast a ballot, has stalled in the Senate after the House passed the legislation in February. 

Tyler Durden Wed, 06/17/2026 - 09:20

The post Quick Thoughts on Wealth appeared first on CEPR.

"Radical Earnings Cut": JPMorgan Sounds Alarm After BMW's Forecast Shock

BMW shares cratered in Germany after the automaker warned investors it would slash its 2026 margin guidance to as low as 1%, down from a prior estimate of as high as 6%, amid weakening demand in China, Middle East-related pressures, rising energy costs, and a deteriorating consumer backdrop hitting sales and profitability.

BMW now expects its pretax profit to fall sharply this year, versus a prior expectation of a moderate decline, and for deliveries in the auto segment to slide, compared with a previous expectation of flat performance.

Here's the new forecast for the year:

• Sees automotive Ebit margin 1% to 3%, saw 4% to 6%, estimate 4.9% (Bloomberg Consensus)

• Sees Automotive return on capital employed 1% to 5%, saw 6% to 10%

JPMorgan analyst Jose Asumendi called the downgrade a major "wake-up call for the auto industry" and warned that the German luxury automaker must address its compact-segment product strategy in China, where European premium automakers have been priced out of the market.

Asumendi called the downgrade a "radical earnings cut" but noted that BMW is generally executing well. He believes the automaker will likely take one-time charges to downsize its global production footprint, with a particular focus on Europe.

Here is Barclays analyst Christophe Boulanger's first take on BMW's big profit warning:

BMW's profit warning signals a sharp cyclical and regional deterioration, with China and macro/geopolitical factors driving a reset in expectations. While management is addressing costs, near-term fundamentals look weak, with recovery deferred to subsequent years. We reiterate our UW rating.

FY26 outlook sharply downgraded amid China weakness, macro headwinds and restructuring

BMW issued a material profit warning for FY26 on the evening of 16 June, reflecting a sharp deterioration in China and a more challenging macro backdrop (two-thirds of the profit warning). The downgrade is broad-based across volumes, margins, cash generation, and returns, with further measures to adjust the cost base, including a restructuring provision (one-third of the profit warning). This one-off item is said to amortise within two years and not be cash effective in 2026 (indicating a combination of restructuring provisions and impairments). The company will disclose further information at its capital market day in September.

Overall/China market development has been weaker than expected by management at the start of the year. In December 2025, CPCA (Chinese Passenger Car Association) expected flat Chinese passenger car sales in 2026, but in May cut its estimate to -7.6%, then -11%, and to -14.1% on 16 June, versus YTD May actuals of -19.4% for the total market.

New FY26 guidance: Auto deliveries to decline 1-5% (from flat in previous guidance), Auto EBIT margin to range between 1-3% (from 4-6% in previous guidance and 5.3% FY 25), a >15% decline in group PBT (from a 10-15% decline in previous guidance) and FCF to >€2.5bn (from >€4.5bn and €3.24bn in FY25).

Read-across to other OEMs: We view Mercedes as the major OEM on the cross-read (c.50-60% China EBIT exposure vs BMW c.50%). VW is much less exposed at c.20%. We see no meaningful read-across for STLA, RNO.

As stated in our Euroean IG Best Ideas report, 17 June, our Underweight rating on BMW (and Mercedes) is driven by tight valuations versus the peer group (as stated in recent our recent report that highlighted downside risk) and weak FY26 guidance and fundamental outlook.

Shares of BMW in Germany tumbled as much as 12%, the biggest intraday decline in almost two years. For the year, shares are down around 32%.

Shares are trading at Covid lows ...

Citigroup analyst Harald Hendriks explained to clients why his team remains "Neutral" rated on BMW shares:

Conclusion — Yesterday's announcement confirms investor concerns over the sustainability of BMW's China business. While the profit warning helps bring down earnings expectations, the real question is what other way can BMW reliably boost EPS growth and finally build a "momentum" equity narrative? With no obvious positive equity narrative, with FY26E earnings still under downward pressure, with a structural thematic negative industry trend, with continued industry-punishing EU regulations, and with a limited number of investors in European (German) value names, we think BMW's undervaluation may persist. Given we see no new positive catalysts at BMW, we maintain our Neutral rating.

As for the STXE 600 Auto & Parts Index (which includes names such as BMW, Mercedes-Benz, Volkswagen, Stellantis, Porsche, Ferrari, Renault, Continental, Michelin, Valeo, and others), Europe's auto industry has drifted back to 2020 levels.

Europe's left-wing political elites may want to rethink their strategy of allowing low-cost Chinese EVs to flood the continent before the region's industrial base suffers lasting damage. BMW's warning suggests the turmoil is industry-wide and likely spread across the broader European manufacturing complex. Also, climate policies on the struggling continent have been an utter disaster.

Tyler Durden Wed, 06/17/2026 - 08:45

Despite Slumping Sentiment, US Retail Sales See Strongest Annual Rise Since Jan 2023

Despite record low consumer sentiment and declining real wages, BofA's omniscient analysts forecast a blockbuster beat for US Retail Sales for both headline, core, and control group cohorts.

Retail sales should be a blowout beat, according to BofA's real-time card data pic.twitter.com/NZmfqWzVNr

— zerohedge (@zerohedge) June 17, 2026

And they were right with the headline retail sales rising 0.9% MoM in May (+0.6% MoM exp) driving YoY sales up a stunning 6.9% - the best since Jan 2023

Electronics and Food Services saw sales decline very modestly in May while Gasoline Stations, Nonstore Retailers, and Motor Vehicle & Parts Dealers saw the biggest rise...

Core (Ex-Autos and Ex-Autos and Gas) also strongly beat expectations (+0.8% MoM vs +0.6% MoM exp and +0.5% vs +0.3% MoM exp respectively.

Most notably, the 'Control Group' which feeds directly into the GDP caluclation rose 0.7% MoM (better than the 0.4% exp)...

Of course this is all nominal-based.

Interestingly, 'real' retail sales (admittedly crudely adjusted via CPI) continue to rebound from a negative print in December...

Spending does seem to continue improving despite the cataclysmic decline in confidence...

Nevertheless, back to where we started above and the disgruntled consumer. BofA notes that gas prices took another big leg up in May, rising by 7.0% m/m SA in the CPI report. As a result, the share of discretionary categories in the consumer wallet in May 2026 was lower than in May 2025 levels across all income cohorts.

This is noteworthy because this share has been trending up in recent years.

Lower-income HHs are feeling the pinch of the gas shock more: they’ve seen a larger increase in necessary spending, which has led to a widening of the “K” in discretionary outlays.

Will those alligator jaws begin to close now that gas prices are starting to tumble?

Tyler Durden Wed, 06/17/2026 - 08:37

Futures Fade Overnight Gains As Attention Turns To Kevin Warsh's First Fed Decision

US futures are attempting to bounce back from yesterday’s losses on Wall Street led by Tech. As of 8:00am ET, Nasdaq 100 futures lead the charge, with gains of 0.5% versus 0.1% for the S&P 500 future, although both are off session highs. SpaceX’s post-IPO surge continues, with shares adding another 3% in the pre-market while Mag 7 are mixed: NVDA is up 0.4%, while GOOGL is down 0.5%. The Stoxx 600 is up 0.2%, while the MSCI APAC Index gained 0.5% in mixed trade for regional bourses. Overnight, headlines were largely muted: US retail sales print and earnings from Jabil and CarMax come before the open, but the real action comes later, with attention focused on the Fed and Kevin Warsh's first FOMC meeting as governor. Bond markets have mirrored some of this choppiness with the exception of gilts, which have been boosted by soft UK CPI metrics. US yields are down 1bp across the curve ahead of Kevin Warsh’s debut as FOMC Chair. The dollar is mixed versus peers. The krona is a touch weaker after the Riksbank held rates as expected.  Bitcoin is down 1.3%.  Commodities are mostly flat to modestly lower: oil prices have been choppy as investors await the formal signing of the US-Iran peace accord on Friday and financial details of the agreement emerge. WTI crude futures are little changed around $76/bbl.

In premarket trading, SpaceX rises 1.9% to eye a fourth straight day of gains, reinforcing the company’s place among the world’s largest after it surpassed Amazon by market value. Nvidia is outperforming Magnificent 7 peers with semiconductor shares set for a rebound (Nvidia +0.2%, Amazon unchanged, Apple -0.1%, Tesla -0.2%, Meta -0.4%, Microsoft -0.4%, Alphabet -0.5%)

• Figma Inc. (FIG) is up 4.2% after Citi initiated coverage of the design software company with a recommendation of buy on expected growth from artificial intelligence demand.
• La-Z-Boy (LZB) jumps 16% after the home furniture store’s reported adjusted earnings per share for the fourth quarter beat the average analyst estimate.
• ResMed (RMD) slips 1% after Morgan Stanley downgraded the stock to equal-weight from overweight, citing lower revenue growth ahead for the maker of breathing machines.
• Rexford Industrial (REXR) is down 1.4% after JPMorgan analyst Michael Mueller cut the recommendation on the real estate investment trust to underweight from neutral, writing that it’s possible the company will see “muted” or even negative growth in 2028 in core funds from operations per share.

In other corporate news, Amazon is said to be facing a possible lawsuit from the US FTC that may lead to billions of dollars in civil penalties, over claims the e-commerce giant misled advertisers. Kuaishou Technology is in discussions with General Atlantic to lead a first round of financing for its video AI arm, Kling AI, ahead of an IPO.

SpaceX shares are poised for a fourth straight day of gains, rising 3.1% in premarket trading. SpaceX may have made headlines for overtaking Amazon’s market cap on Tuesday, but it will take time to catch up on capex spending, or revenue as this Bloomberg chart shows.

Turning to today's main event - Kevin Warsh's first Fed decision - we noted in our FOMC preview that while rates are expected to be left where they are, investors will be looking to see which Warsh shows up for his first press conference as chair: Trump's advocate for lower rates, or the inflation hawk seen around the global financial crisis. The swaps market is not fully pricing in a 25-basis-point hike until March next year, but Warsh is expected to remove the Fed’s “easing bias” today as inflationary pressure builds. 

Investors remain divided on the Fed’s next move, with forecasts ranging from rate cuts to multiple increases over the coming year. Oil has slumped on expectations a US-Iran agreement to reopen the Strait of Hormuz will boost supply and ease inflation pressures, prompting investors to reassess the outlook for global interest rates on Fed day. Ahead of the Fed decision, OIS contracts price in around 20bp of tightening by the end of the year. Option traders have been hedging a range of outcomes for Fed policy this year and in early 2027, from cuts to multiple hikes. 

“We’re all poised for a hawkish, ready-to-fight inflation Warsh,” Ian Lyngen, head of US rates strategy at BMO Capital Markets, said in an interview with Bloomberg TV. “What happens if he comes out and he’s a lot more dovish?”

JonesTrading chief strategist Mike O’Rourke highlights that two of Warsh’s primary criticisms of the Fed are its expansive balance sheet and over-communication. The communication includes the Summary of Economic Projections, commonly known as the dot plot. “The forecasts are terrible,” notes O’Rourke. 

Markets are also watching for changes in Fed communications under Warsh. Bloomberg Economics expects the new chair to forgo submitting his own interest-rate projection to the closely watched dot plot, a break from the practice followed by Jerome Powell, Janet Yellen and Ben Bernanke.

“Warsh faces a formidable challenge, striking a balance between President Trump’s desire for lower rates and signalling to the market that he is a credible and independent Fed chair,” said Bank J Safra Sarasin equity strategist Wolf von Rotberg. “Inflationary pressures in the US are unlikely to abate quickly. Solid growth and elevated core inflation suggest a hawkish bias, regardless of oil prices.”

On the geopolitical front, the US and Iran are preparing to formally sign a memorandum of understanding on June 19 in Switzerland. Still, governments, energy investors and shipping companies remain cautious about how quickly traffic through the Strait of Hormuz can return to normal.

Turning to politics, at the G7 meeting in France, AI is in focus with bosses of OpenAI and Anthropic in attendance. Cut-off to frontier AI models is causing concern, notes Bloomberg Opinion columnist Catherine Thorbecke, highlighting a French presidential candidate calling the move a wake up call, adding that “a nation that depends on others for its technology is a nation that can be unplugged overnight.”

Elsewhere, the IEA said world oil consumption will slump by 1.1 million barrels a day this year, worse than its previous forecast of a decline of about 420,000 a day, the biggest drop since Covid in 2020 amid “higher fuel prices and disruptions to product availability.” 

In Europe, the Stoxx 600 is up 0.2%, and holding steady near record highs as investors awaited the Federal Reserve’s rate decision, with German automaker BMW the biggest faller on the Stoxx 600 benchmark after slashing its profitability forecast, weighing on the wider auto subindex. Here are the biggest movers Wednesday:

• Straumann shares jump as much as 11%, the most since October, after the Swiss dental implant maker increased its profitability guidance for the year. Analysts were upbeat on the magnitude of the outlook boost
• Aixtron shares rise as much as 5.8% after JPMorgan analysts raised their estimates for the German semiconductor equipment supplier and set a new Street-high price target for the stock
• PZ Cussons climbs as much as 9.9%, to the highest since September 2024, after the personal care products maker said full-year adjusted operating profit should come in at, or slightly above, the upper end of the previously guided range
• BFF Bank shares rise as much as 13% in Milan trading, the most since May 12, after Italian newspaper MF reported that Banco BPM and Amco may be considering an offer for the bank, without citing sources
• Lenzing advances as much as 12%, the most since August, after Berenberg turns positive on the textile producer for the first time in almost nine years, upgrading to buy from hold to reflect an improvement in pricing
• BMW shares fall as much as 12% after the German carmaker slashed its profitability forecast and ramped up its cost-cutting program, flagging worsening demand in China and negative sentiment from the war in the Middle East.
• Orange shares slip as much as 4.1% to the lowest since March after Barclays reinstated coverage with an equal-weight rating, saying upside value from the recent SFR deal is already caputred in valuation
• Zealand Pharma falls as much as 8.1% after Berenberg cut its recommendation to hold from buy, saying unlocking upside will now take longer than previously anticipated
• Silex Microsystems falls as much as 20% after several brokers initiated coverage of the Stockholm-listed specialist microchip maker that debuted on May 7. SEB starts coverage with a sell rating, saying it’s too richly valued
• Medincell shares slump as much as 16%, the most since April 2022, after the French biopharma company reported full-year revenue that analysts said was weaker than expected

Asian stocks advanced for a fourth straight day as investors awaited the Federal Reserve’s first policy decision under new chairman Kevin Warsh.  The MSCI Asia Pacific Index rose 0.5%, erasing similar losses from earlier in the session. South Korea’s Kospi led regional gains as shares of memory chipmaker SK Hynix Inc. hit a record high. The Fed decision will cap a week of major central bank meetings, after the Bank of Japan raised interest rates and the Reserve Bank of Australia left policy unchanged, both in line with forecasts. Here Are the Most Notable Movers

• Tamron shares surged 24% to a record after the camera lens maker announced an unexpected mid-term plan and a significant expansion of shareholder returns.
• Kuaishou Technology shares gain 7.3% on optimism over Chinese AI firms and news that the company is in talks with General Atlantic for the first-round financing of its video unit Kuaishou Kling.
• SK Hynix shares gain as much as 5.7% to a record after Korea Economic Daily reported the memory chipmaker is preparing a shareholder return policy worth up to 100t won this year.
• Fila SpA has sold 4.25 million shares of DOMS Industries Ltd. for 2,200 rupees each, according to terms of the deal seen by Bloomberg News.
• Chinese printed circuit board supply chain stocks extended their climb after a report that a major upstream supplier plans to raise prices. Senasic Electronics Technology shares soar as much as 100% in their Hong Kong trading debut on Wednesday.
• Merdeka Gold Resources shares rise as much as 3.2% in Jakarta trading after the Indonesian miner offered 89.7 million HDRs at up to HK$26.60 each in its Hong Kong listing.
• Kingboard Holdings shares surge 17.7% after a unit agreed to sell 155 million shares of Kingboard Laminates for HK$76 per share through a block trade agreement.
• Senasic Electronics Technology shares more than doubled in their Hong Kong trading debut on Wednesday.

In FX, the dollar is mixed versus peers. The krona is a touch weaker after the Riksbank held rates as expected.  

In rates, treasuries are marginally richer across the curve, following steady price action in oil and supported by wider gains across gilts, which outperform after UK headline and core inflation figures rose less than expected in May. Treasury yields remain within 1bp of Tuesday’s closing levels, the 10-year around 4.435%, with UK counterpart outperforming by 4bp; following UK CPI data, 10-year gilt yield dropped to a two-month low 4.734% as BOE rate-hike pricing for this year eased slightly. Focal point of US session is first FOMC decision of Chairman Kevin Warsh’s tenure, expected to hold rates steady.  Treasury auctions resume Thursday with $24 billion 5-year TIPS reopening; demand was strong for Tuesday’s 20-year sale

In commodities, WTI futures are up around 0.6% after rebounding from a fresh three-month low in anticipation of a US-Iran deal signing. Bitcoin is down 1.3%. 

Today's US economic data calendar includes May retail sales (8:30am) and April business inventories and May pending home sales (10am)

Market Snapshot

Top Overnight News

• Brent held below $80 as traders bet a US-Iran deal due to be signed Friday will reopen the Strait of Hormuz, restore Iranian oil exports and give Tehran access to a $300 billion development program. BBG
• The Trump administration’s emerging nuclear deal with Iran risks securing fewer restrictions than the deal negotiated by the Obama administration — one he derided and later scrapped. BBG
• As the world awaits the full reopening of the Strait of Hormuz following the signing of an interim peace deal between Iran and the US, the United Arab Emirates is working on a highly ambitious plan to try to end its dependence on the critical chokepoint. BBG
• G7 leaders agreed to tighten sanctions on Russia’s oil and gas industry and boost military support for Ukraine. The summit’s final day turns to AI, with OpenAI and Anthropic execs attending. BBG
• Senior Trump administration officials had weighed how to structure potential government equity stakes in major AI companies before the government’s export controls on Anthropic further roiled the industry. Semafor
• US President Trump's administration considered requiring Anthropic to obtain government approval before allowing foreign nationals access to its most advanced AI models, as officials weigh new export control measures for AI tech.
• FOMC Preview: The most important change in the economic data since the last FOMC meeting is the impressive pick-up in job growth that has put the labor market on a sturdier trajectory. This has left the focus on whether the inflation situation is becoming concerning enough to warrant a rate hike. The war and the increase in oil prices will likely drive headline PCE inflation above 4% and leave core PCE inflation above 3% all year. But so far the impact on inflation looks more like the usual passthrough from large oil shocks than the pandemic’s wide-ranging shortages and price spikes. Link
• UK inflation held at 2.8% in May, unchanged ‌from April's 13-month low and below forecasts from both economists and the Bank of England, official figures showed on Wednesday, a day before the central bank's next interest rate decision. BoE expected to keep interest rates on hold at 3.75% on Thursday. RTRS
• Sweden’s Riksbank assesses that it is well-balanced to leave the policy rate unchanged at 1.75 per cent now, but the probability that the rate will be raised later this year has increased in relation to the assessment in March.  Riksbank
• Convertible bond issuance surges as companies rush to raise as much money as possible to fund their AI ambitions. WSJ

Middle East News

• An informed source told Tasnim that Bloomberg's alleged text about the US-Iran MoU is not accurate, adding that the text of the memorandum, based on the agreement of the parties, will not be published after it is signed on Friday. However, this was later corrected, stating that the text will be released after the signing on Friday.
• US Defence Secretary Hegseth and CIA Director Ratcliffe were among the “most pessimistic” about whether the Iranians would honour their commitments to make substantive concessions on their nuclear program, according to CNN.
• A US senior official was said to have dismissed as "preposterous", the reports of side deals in which Gulf states such as the UAE and Qatar could unfreeze Iranian funds they hold, according to Axios.
• The US Senate voted 48-47 to narrowly block a new bid to rein in Trump's war powers.
• Trump administration officials were reported to be discussing ideas to kick-start oil tanker traffic through the Strait of Hormuz, including offering a fee-based “VIP pass” naval escort through the waterway, according to people familiar with the discussions cited by POLITICO.
• US officials told a CNN reporter that Iran's Supreme Leader has given his tacit approval of the MOU, and that there are internal discussions over whether he could issue a statement ahead of Friday's formal signing ceremony in Switzerland. It was separately reported that US officials downplayed the Iran agreement texts and said that the text omits key back-channel commitments, according to CNN.
• Israeli artillery shelling reported in southern Lebanon, according to SNN.
• Al Jazeera correspondent reported that 10 rockets were fired towards Israeli forces in the vicinity of Kfar Tebnit town in the Nabatieh district of southern Lebanon.

A more detailed look at global markets courtesy of Newquawk

APAC stocks ultimately traded mixed, albeit at an improvement from the initial losses seen following the subdued lead from Wall St, where most major indices finished in the red amid renewed tech selling. ASX 200 shrugged off early weakness and edged mild gains with upside led by mining, materials and tech, although further upside in the index is capped by losses in energy and the defensive sectors. Nikkei 225 clawed back initial losses and printed a fresh all-time high after briefly topping the 70,000 level. Hang Seng and Shanghai Comp lagged amid losses in auto names and aluminium producers, while they also failed to benefit from a report that the US delayed blacklisting China's DeepSeek and over 100 Chinese firms deemed national security risks. There was also little reaction seen to the PBoC's announcement to add overnight reverse repo instruments and to increase overnight reverse repo operations, as it seeks to improve the efficiency of interest rate transmission.

Top Asian News

• PBoC Governor Pan said they will allow overseas institutions to access yuan liquidity and will add overnight reverse repo instruments at the appropriate time, while he added they will increase overnight reverse repo operations and improve the efficiency of interest rate transmission. Pan also stated that six banks are authorised to conduct offshore foreign exchange transactions in the Shanghai Free Trade Zone, and commented that it is difficult and unnecessary for China's credit growth to maintain its previous pace.
• PBoC announces an adjustment to the temporary overnight reverse repurchase and outright repurchase agreement time which is to be set between 15:00-15:30 local time (08:00-08:30BST/03:00-03:30EDT). PBoC seeks to ensure flexible and efficient use of temporary overnight reverse and outright repurchase agreements in the open market. Furthermore, PBoC said operating rates will be set at the 7-day reverse repurchase rate in the open market minus 25bps and plus 25bps, respectively, and that it will act when the money market overnight rate remains consistently below or above the respective operation rates of the tools.
• Chinese Vice Premier He Lifeng said they will step up financial supervision and will vigorously and orderly advance resolution of local government debt, while He added they will issue CNY 300bln special bonds to replenish the capital of financial institutions and that the financial sector will be opened up further.
• China's financial regulator said they will increase regulatory cooperation in emerging areas and will strengthen efforts to avert systemic financial risks. The regulator will also strictly curb unlawful financial activities and address risks in small and medium-sized financial institutions effectively and orderly, while China is to steer financial resources towards emerging and future industries.
• Senior leaders of Japan's ruling party said to have proposed cutting the consumption tax on food to 1% from April 2027 for a two-year period.

European bourses (STOXX 600 +0.3%) start Wednesday's trade mixed, with outperformance in the AEX (+0.7%) while the DAX 40 (-0.2%) lags after BMW cut guidance. Geopolitical newsflow has been light thus far as markets await for the official MoU signing on Friday.
European sectors also lack a clear bias. Technology (+1.2%) and Banks (+0.8%) top the sector pile. Autos (-2.1%) is the worst-performing sector this morning, primarily driven by updated guidance from BMW. The Co. cut its operating auto margin to 1-3% (prev. 4-6%) and said it would intensify cost-cutting, with a negative one-off in the H2'26. Analysts at Deutsche Bank and Jefferies both said the outlook cut was significantly larger than expected, which has resulted in the Co.'s shares slumping as much as 11%. This has dragged peers lower with it (Volkswagen -2.4%, Mercedes-Benz -3.0%)

Top European News

• UK Inflation Rate YoY (May) Y/Y 2.8% vs. Exp. 3% (Prev. 2.8%); Services 3.7% (exp. 3.7%, prev. 3.2%).
• UK Inflation Rate MoM (May) M/M 0.2% (Prev. 0.7%).
• UK Core Inflation Rate YoY (May) Y/Y 2.6% vs. Exp. 2.7% (Prev. 2.5%, Low. 2.6%, High. 3.0%).
• UK Core Inflation Rate MoM (May) M/M 0.3% (Prev. 0.7%).
• EU Inflation Rate YoY Final (May) Y/Y 3.2% vs. Exp. 3.2% (Prev. 3%, Low. 3.2%, High. 3.2%).
• EU Inflation Rate MoM Final (May) M/M 0.1% vs. Exp. 0.1% (Prev. 1%, Low. 0.1%, High. 0.1%).
• EU Core Inflation Rate YoY Final (May) Y/Y 2.6% vs. Exp. 2.5% (Prev. 2.2%).
• ECB Wage Tracker: 2026 Quarterly +2.604% (prev. +2.597% Y/Y); Annual +2.281% (prev. +3.193%).

FX

• DXY is on a modestly firmer footing after softening on Monday alongside a decline in yields and lower oil prices. Focus today is overwhelmingly on Warsh’s first FOMC meeting as chair, where the committee is widely expected to keep the federal funds rate unchanged at 3.50-3.75%. Within the meeting, attention will be on language surrounding the easing bias, and the dot plots, which ING believes a removal of the bias alongside a cut to the 2026 dot plot, would support the Buck. Alongside these points, Warsh’s communication will be closely monitored. (Full Fed preview in the Newsquawk Research suite). DXY lacks direction, trading unchanged and supported just above 99.50.
• GBP is a touch lower. In short, a cooler than expected UK CPI print, which falls beneath BoE forecasts on both a headline and core basis, services were also cooler than BoE forecast, but in line/hotter than analyst forecasts, depending on which data vendor is cited. GBP weakened post-data; Cable fell as much as 20 pips to a 1.3408 trough before paring modestly. The pair dipped below its 200DMA at 1.3418.
• Two-way action seen in SEK, which is modestly softer post-announcement despite the forecasts implying a greater chance of a 2026 hike. Pressure that is a function of the fact that the forecasts and statement are based on information up to the 11th of June, as such the fall in energy benchmarks seen in the last few sessions on the US-Iran MOU progress is not accounted for, and therefore the hawkish tilt to the policy forecast is likely to be unwound in the next meeting, if the MOU holds and the energy retreat sticks and/or extends. We may get more details from Governor Thedeen at 10:00BST, and the Minutes on the 24th of June.

Fixed Income

• Global fixed benchmarks are mixed, with USTs a couple of ticks lower whilst Bunds and Gilts gain; the latter outperforms after the UK’s inflation held steady in May. Geopolitical updates have been lacking today, with all eyes on the US-Iran deal signing on Friday. However, Iran’s Tasnim, citing a source, suggested that the text will not be published after the signing on Friday. Though, this was later corrected and it will be released.
• USTs (-2 ticks) hold within a 109-26+ to 109-30+ range. Markets are ultimately on tenterhooks ahead of the Fed policy announcement, which will see the debut of Kevin Warsh as Chair. Policy rates are expected to remain unchanged, so focus will be on whether the easing bias will be removed from the statement. Dot plots are seen to show higher inflation and a more cautious policy path, with the new Chair interestingly not expected to publish a personal dot plot. At the presser, traders will eye whether he attempts to push a dovish agenda and how he contrasts to his fellow board members. From a yield point, Warsh will be eyed for any hints to his thinking on the Fed balance sheet; should markets be guided to faster unwinding of the Fed’s balance sheet, a steeper curve could be expected.
• Bunds (+20 ticks) trade firmer this morning, continuing recent price action. Domestically, the release of the ECB Wage Tracker had little impact on German paper, where the 2026 quarterly figure rose slightly from the prior. Focus ahead turns to the EZ Final Inflation metrics for May, which are expected to remain unrevised. From a yield perspective, the German 10yr has now slipped below the 3.00% mark (current 2.93%), and now approaching levels not seen since early April.
• Gilts (+57 ticks) outperform vs peers following the region’s inflation report. In brief, a cooler-than-expected print on both a headline and core basis. A series that reduces the odds of a hawkish surprise at the June BoE. However, the as-expected/slightly-hotter (depending on the consensus provider) services figure will be a point of concern for policymakers and may well be enough to keep some dissenters in play, even given the significant energy benchmark moderation in recent days. The report will not have any impact on the policy decision at Thursday's meeting (BoE to hold), but could push the vote split a bit more dovish vs consensus; analysts saw a range between 8-1 to 6-3 before the inflation print and recent energy moderation on US-Iran progress.
• Germany sells EUR 2.107bln vs exp. EUR 2.5bln 3.40% 2047 and 1.80% 2053 Bund.
• Australia sells AUD 300mln 4.75% June 2054 bonds b/c 2.46, avg yield 5.3040%.

Commodities

• Crude futures are essentially incrementally firmer, hovering at 3-month lows, as markets await the US-Iran MoU signing in Switzerland. Details of the deal remain light; however, Reuters did shine some light on a point of the draft MoU: the rehabilitation and economic development of Iran. The report stated that a USD 300bln private fund is being designed to trigger investment into Iran. The report added that commitments have already exceeded USD 150bln across 5 regions, while the fund will not contain US government money or grants.
• Energy benchmarks are relatively contained. WTI Aug'26 oscillates in a USD 74.09-76.06 range while Brent Aug'26 rotates in a 77.75-79.57/bbl band.
• Spot gold has come off slightly ahead of the FOMC meeting, in which a hold is expected. Focus will lie in the press conference, in which Fed Chair Warsh is delivering his first post-policy conference in his new role. The yellow metal currently trades at the lower end of its narrow USD 4318-4350/oz range.
• 3M LME Copper flips either side of the USD 13.8k/t handle as market risk is subdued.
• US Private Inventory Data (bbls): Crude -8.3mln (exp. -4.5mln), Distillates -0.5mln (exp. -0.2mln), Gasoline +2.5mln (exp. -1.4mln), Cushing -1.5mln.
• IEA OMR (Jun): World oil demand falling by 1.1mln BPD in 2026 on the Iran War (prev. forecast 420k BPD fall); sees total world oil supply 920k BPD lower than demand in 2026 (prev. forecast 1.7mln BPD lower).
• TotalEnergies (TTE FP) says its Saudi Arabian refinery was hit by three drones but is still only running at 70% and "probably" will not be repaired until early 2027.
• Tanker Trackers reported that two Iranian supertankers carrying a total of 3.8mln barrels of crude oil passed through the US blockade.
• Two US Senate Democrats are calling for US Energy Secretary Wright to abandon efforts to build a West Coast SPR, CNN reported. Democrats warned that establishing it this fiscal year would flout the law and usurp congressional authority.

Trade/Tariffs

• The US delayed the blacklisting of China's DeepSeek and over 100 Chinese firms deemed national security risks, to avoid escalating tensions with Beijing, according to sources cited by Reuters.

US Event Calendar

• 7:00 am: Jun 12 MBA Mortgage Applications, prior 10.8%
• 8:30 am: May Retail Sales Advance MoM, est. 0.55%, prior 0.5%
• 8:30 am: May Retail Sales Ex Auto MoM, est. 0.6%, prior 0.7%
• 10:00 am: May Pending Home Sales MoM, est. 0.9%, prior 1.4%
• 2:00 pm: Jun 17 FOMC Rate Decision; est. 3.75%, prior 3.75%

DB's Jim Reid concludes the overnight wrap

It’s set to be a long day: I was up just before 4am to drop my daughter off for a three-day school trip to Disneyland Paris, and will be up late tonight for England’s first World Cup game while also keeping an eye on the outcome of Fed Chair Warsh’s first FOMC meeting. When I was at school, we had a one-day trip to Thorpe Park, a theme park just three miles away. I vividly remember that it cost £4 to get in. The trip to Disneyland Paris is costing me a little more than that! How things have changed.

Thankfully we can park the rollercoaster market analogies at the moment as relative calm has broken out in markets since the war in the Middle East is now seemingly over. The latest overnight was a reported 14-point US–Iran peace framework (reported by Bloomberg) outlining a broad de-escalation package centred on a permanent ceasefire, the lifting of the US naval blockade and the reopening of the Strait of Hormuz with traffic targeted to return to pre-war levels within ~30 days. Crucially, the draft includes immediate waivers for Iranian oil and petrochemical exports upon signing, alongside a broader package of financial incentives including access to frozen assets (timing unspecified) and a ~$300bn externally financed development plan. In return, Iran reiterates its commitment not to pursue nuclear weapons and to neutralise enriched material, with core nuclear constraints deferred to a 60-day second phase of negotiations. Importantly, the benefits appear conditional on compliance, and much of the detail remains fluid ahead of formal signing, underscoring that this is still a high-level MoU rather than a final settlement. The plan is for it to be signed in Switzerland on Friday.

Oil continues to edge lower overnight (Brent -0.42% to $78.61/bbl) after a big fall yesterday with Asian equities relatively quiet. Across the region, the Nikkei (+0.92%) and KOSPI (+0.83%) continue to perform well even with a setback in US tech yesterday that we'll discuss below. The ASX (+0.50%) is also higher with mainland Chinese equities broadly flat and the Hang Seng (-0.37%) slightly lower. S&P 500 (+0.25%) and Nasdaq futures (+0.54%) are bouncing back after a tougher day for US tech on Tuesday.

Ahead of those overnight moves, global markets had mostly put in another decent performance yesterday although a slump in chipmakers weighed on US equities. The main global catalyst was the US-Iran headlines, with Brent crude (-5.06%) posting a fourth consecutive decline as the two sides prepared to sign the memorandum of understanding this Friday. Indeed, Brent hit a three-month low of $78.43/bbl, which in turn has seen investors increasingly price out the chance of stagflation this year. Indeed we saw rising evidence of the US easing its blockade yesterday with Iranian tankers sailing through it with active location trackers for the first time since April.  

That fall in oil prices led to a fresh boost for markets, particularly for European assets which are more exposed to the energy shock. So yesterday saw the STOXX 600 (+0.25%) and Italy’s FTSE MIB (+1.15%) hit another record high, alongside gains for the FTSE 100 (+0.61%) as well.  
But for US equities there was a more divergent performance, as weakness among chip stocks dragged on both the S&P 500 (-0.57%) and the Nasdaq (-1.15%). Continued volatility for chipmakers saw the Philly semiconductor index slump by -5.71% from its record high the previous day, after rising by +15.5% after the three previous sessions. Aside from that though, there were some stronger moves, with most S&P 500 constituents higher on the day and the KBW Banks index (+1.64%) up to a new record.  

Meanwhile, bonds rallied as investors became increasingly optimistic on the near-term inflation profile. The US 1yr inflation swap fell -9.5bps to 2.57%, its lowest since February 27, the day before the strikes against Iran began. And the 1yr Euro inflation swap (-10.0bps) fell to a three-month low of 2.61%, having been above 3.8% less than a month earlier. So that supported bonds on both sides of the Atlantic. In the US, the 2yr Treasury yield (-1.4bps) was down slightly to 4.05%, whilst the 10yr yield (-3.5bps) saw a bigger decline to 4.44%. European sovereigns saw similar moves, with yields on 10yr bunds (-2.5bps), OATs (-3.6bps) and BTPs (-4.1bps) all moving lower.  

Nevertheless, even as oil prices have come down again, there were still warnings about the inflation shock. For instance, ECB chief economist Philip Lane warned that inflation was still in the pipeline, given “four months of elevated energy prices”. He also warned that “There’s going to be indirect effects on food, on goods, on services this year and into next year.” So even with oil prices coming down again, markets are still fully pricing in a second ECB hike before the end of the year, following on from last week’s move.

Speaking of central banks, attention today will be firmly on the Federal Reserve’s decision, which is the first with Kevin Warsh as the new Chair. They’re widely expected to keep rates on hold, but a new Chair often leads to higher volatility at first, because the market is trying to work out their communication style and reaction function. So it could still be an eventful one, even without a change in rates. In terms of what to expect, our US economists think the statement will drop the easing bias from last time, and expect the median dot will no longer signal a rate cut this year, as the last one did in March. Based on prior comments, they think Warsh is likely to avoid forward guidance and an overreliance on short-term data trends. And they also see him tacking towards the centre of the committee, so not arguing for near-term rate cuts, but not taking rate hikes off the table either. For more details, see the full preview here from our US economists.

In terms of the latest market expectations on the Fed, fed funds futures are pricing 21bps of hikes by year-end, with this pricing actually rising +1.3bps yesterday despite the broader rates rally as expectations for any dovish rhetoric from Warsh appear to have eased.

In other news, the European Parliament voted in favour of the EU trade deal with the US agreed last year, by a 440-151 margin. Although the deal was initially reached last summer, there had been several delays to the ratification process, including earlier this year when Trump was threatening to annex Greenland.  

Finally, there were a few data releases yesterday, including the ZEW survey from Germany. That showed the expectations measure rising more than expected to 10.5 in June (vs. -5.5 expected), a 4-month high. However, the current situation measure fell more than expected to a 6-month low of -81.0 (vs. -78.0 expected). Then in the US, housing starts saw an unexpectedly big drop in May, falling to an annualised pace of 1.177m (vs. 1.430m expected), which was the lowest since May 2020 during the pandemic.

Overnight in Asia, Japan’s trade deficit narrowed unexpectedly to ¥378.7bn in May (vs. ¥547.6bn expected), supported by robust export growth of +17% year-on-year on strong demand from the US and China. Imports also rose (+12.5% y/y) but came in slightly below expectations. Meanwhile, April’s trade surplus was revised down to ¥299.3bn.

Looking at the day ahead, the main highlight today will be the Federal Reserve decision, along with Chair Warsh’s subsequent press conference. We’ll also hear from the ECB’s Sleijpen. Otherwise, we’ll get the UK CPI release for May, along with US retail sales and pending home sales for May.

Tyler Durden Wed, 06/17/2026 - 08:25

A Social Media Ban For Minors Requires Data From Everyone

Authored by Luke Nelson and Mike Campbell via The Epoch Times,

In debating a social media ban for minors, it appears we face a choice between two perceived harms.

One is the reported damage that social media is doing to the mental health of children and adolescents.

The other is the normalization of mass age verification systems—most likely involving biometrics—that would apply to everyone, not just minors.

This carries real risks of privacy invasion, data breaches, and future mission creep.

There is little dispute that many Western countries have experienced a rise in youth mental health problems beginning around 2010–2012 (when Smartphones and social media exploded). Anxiety, depression, self-harm, and suicide rates among adolescents, particularly girls, have increased dramatically since this period. There is disagreement, however, not over whether these spikes exist, but whether they can be attributed specifically to social media. The lingering effects of the pandemic and lockdowns, and family breakdown are just some of the other factors that could be in play.

Data debates aside, most Canadians with common sense and personal experience using social media for prolonged periods of time would admit that doing so is harmful for their mental health, no matter their age. So, what should we do?

Whatever steps we take, resorting to broad government-mandated bans and mass surveillance should not be one of them.

Australia offers the clearest real-world test of such a policy. Since its under-16 social media ban took effect on Dec. 10, 2025, platforms operating in the country, including Facebook, Instagram, Snapchat, Threads, TikTok, X, YouTube, Reddit, Twitch, and Kick, have been required to take “reasonable steps” to prevent users under 16 from creating or maintaining accounts. Platforms guilty of breaching this new law can reach up to AU$49.5 million.

Australia’s legislation “specifically prohibits platforms from compelling Australians to provide a government-issued ID or use an Australian Government accredited digital ID service to prove their age.” To comply with the law, platforms have implemented widespread use of behavioural analysis, device signals, and facial age estimation scans. By mid-December 2025, platforms had already removed access to approximately 4.7 million suspected under-16 accounts.

But large numbers of teenagers quickly found workarounds. Surveys conducted in early 2026 show that more than 60 percent of under-16s who had accounts before the ban continue to access at least one restricted platform. Common methods include using borrowed phones or parents’ ID, fake age declarations, VPNs, and printed mesh masks to fool facial recognition.

Without robust age verification systems, therefore, a meaningful ban doesn’t exist.

It might initially remove under 16s, but millions of ineligible minors will find a way to return to these platforms, as has taken place in Australia.

This begs an important question: What is the point of an age verification system that is only half effective?

This would create a new set of problems including the loss of privacy rights for everyone, without actually solving the underlying problem the legalization is reportedly designed to fix.

Canada is aware of this conundrum. What would Canada do, then, to both kick minors off the platforms and keep them off the platforms? There is no reason to think that parental oversight or enforcement will be any different here than across the Pacific.

One possibility is social media users must submit verification of identity every time they log in to the platform. The most obvious way to do this would be a government-mediated login system. This would essentially grant government an immense amount of metadata about who logs in to what, how often, etc.

Another possibility would be for social media platforms themselves to monitors users’ data, either by periodically scanning faces and matching it to submitted photo ID, or by evaluating user behaviour (i.e., what content is being accessed and predicting the age of users). This would give an immense amount of data to social media companies that, if retained, could lead to significant privacy violations. Imagine a camera monitoring you every time you use Instagram or Facebook. Think about the fact that biometric technology can already be used to predict age based on wrinkles, skin texture and elasticity, facial proportions, eye shape, hairline, and bone structure. Researchers have even found statistical correlations between typing speed, error patterns, touch pressure, and age.

In this latter possibility, Canadians would be handing highly sensitive biometric data (faces, fingerprints, typing style, etc.) to foreign corporations that are subject to foreign laws (U.S. CLOUD Act, Chinese national intelligence law, etc.). These companies can be compelled by their own governments to hand over your personal and identifiable data. This type of data is also permanent. If it gets hacked, leaked, or demanded by a foreign government, you cannot change it like a password.

Finally, a mandatory social media ban for minors under 16 would significantly restrict their ability to access information about the world. Freedom of expression under the Charter section 2(b) includes not only the right to speak, but also the right to receive information. Canadian courts have recognized this in several cases. Social media platforms have become one of the primary ways many young people receive news, public debates, educational content, and diverse viewpoints.

One doesn’t have to be an absolutist to value freedom and privacy, but the fact of the matter is we have not tried alternative strategies that would minimally impair this fundamental freedom of privacy for everyone, and freedom of speech for minors. Yes, facial recognition is already used voluntarily on some platforms (such as dating apps). And a driver’s licence is often required from gambling sites to ensure compliance with the law. But there is a profound difference between choosing to use one of these sites and being required by law to submit biometric data to participate in modern public discourse. The scale is also vastly different.

We should pursue less invasive strategies instead of choosing between an ineffective ban or a robust and draconian one. Aggressive cultural campaigns against early smartphone use, phone-free schools until at least Grade 9 or 10, and better parental control tools have all shown meaningful results for youth mental health in multiple studies. Stronger platform liability for addictive design specifically aimed at children could also be pursued.

At the end of the day, parents are responsible for their children’s social media use with or without a law that requires everyone share their digital data. In other words, even if a robust law existed, parents would still be responsible to ensure their children avoid workarounds.

The instinct to protect children is good, but we cannot protect them by quietly dismantling the privacy and freedom of the entire society. The cure must not be worse than the disease.

Tyler Durden Wed, 06/17/2026 - 08:05

NetJets Business Jet Crashes On Texas Highway

The aviation world has endured a turbulent week, with a series of high-profile incidents spanning a fighter jet crash, a B-52 bomber crash, and now a business jet that went down on a Texas highway in the overnight hours.

A NetJets Cessna 680 Citation Latitude (N523QS) crashed on a Texas highway while attempting an emergency landing near Laredo International Airport, Texas. 

NetJets confirmed to Fox News that its Cessna 680 Citation Latitude was involved in the accident but did not provide details on what led to the emergency landing. 

Fox provided more details:

The plane was carrying six people when it crashed on Loop 20 in Laredo, Texas, shortly after 10 p.m., according to Jose Baeza, an investigator with the Laredo Police Department. Baeza also said a vehicle was struck by the aircraft. It was not immediately clear if the person killed was in the aircraft or on the ground.

Footage shows the small business jet partially on fire and split in half while good Samaritans and law enforcement attempted to rescue passengers and crew.

First responders seen breaking cockpit window at plane crash scene near Loop 20 in Laredo, Texas. https://t.co/0L5hk8yMwB pic.twitter.com/euAazbd7kl

— AZ Intel (@AZ_Intel_) June 17, 2026

On Monday, a USAF B-52 Stratofortress bomber crashed in California, while a military F/A-18 Hornet crashed 55 miles southeast of Seattle, Washington, on Saturday.

Tyler Durden Wed, 06/17/2026 - 06:55

My mid-week morning train WFH reads:

• A Good Family: Fight Warsh says he wants one, inflation demands it, and the dot plot is how we’d see it. All eyes will be on Kevin Warsh this week as he chairs his first FOMC meeting. However, with PCE inflation on track to top 4% in May, the more pressing question is whether the Fed should raise rates this year. The debate around the FOMC table will be critical, and I worry that Warsh’s efforts to rein in forward guidance could bury it. Obscure a hawkish shift now, and markets get an unwelcome surprise if the Fed actually moves. The uncertainty itself could add to borrowing costs. (Stay-at-Home Macro)

• Elon Musk Is Colonizing Earth: On the surface, Starbase resembles other small Texas towns. It is run by a city commission headed by a mayor who was voted into office to serve a one-year term in May 2025. At their monthly meetings, the mayor and two elected commissioners conduct garden-variety municipal business, like voting to approve ordinances and starting the process to hire a police chief. But this American town functions very differently than most. From what I can tell, every conclusion the commission reaches seems to be a foregone conclusion, and every measure it enacts seems to benefit SpaceX. To date, all votes the commission has taken since the city was incorporated have been unanimous. (New York Times)

• How to Save Capitalism: Nick Hanauer and Eric Beinhocker have a plan for fixing capitalism: “market humanism.” Capitalism is yet worth saving, argue entrepreneur Nick Hanauer and scholar Eric Beinhocker. But they also argue for a radical rethinking of what capitalism should achieve. Their solution: a philosophy they call “market humanism,” which elevates “human flourishing” over efficiency as goals for the economy. (Washington Monthly)

• The abundance illusion: It has worked for every US Administration since Bush Sr. The inventory buffer became the policy. Consume the insurance, call it abundance, and avoid the pain of rebalancing. The hard work Carter asked for — building the physical capacity to never need the buffer — was quietly abandoned. The energy transition gradually became an environmental project, eventually losing much of its security logic and curdling into a polarised fight over green and brown that has lasted a quarter century. (Carlyle)

• SpaceX’s Critical Mineral Consumption: SpaceX’s mineral consumption could increase by 10x over the next decade: Based on an analysis of the company’s S-1, marketing materials, and public information. Over the next decade, SpaceX could consume nearly 270k tons of minerals. The majority of SpaceX’s mineral consumption will come from aluminum, with a total of 137k tons used across Falcon models, StarshipV3, and satellites (V2 and V3). The next bucket of materials contains iron, nickel, silicon, titanium, and germanium, which are used in alloys (Fe, Ni, Ti), while Si is used in high-performance ceramics for heat shields and/or seals. Ge is generally used in solar cells and semiconductors. The next tier of minerals (Ga, In, Cu, Cu, Cr, Nb, Co, Mo, Li, Mn, As) is used in a wide variety of applications, from wiring to lithium-ion batteries and high-temperature components. (Gabriel C)

• Anthropic’s Safety Superpower: To that end, I can certainly buy the case that Fable/Mythos is in fact more capable when it comes to identifying and exploiting security issues, and that Anthropic’s cautious roll-out was justified. The problem with publicly releasing models, however, is that guardrails can be jailbroken, and apparently that is exactly what happened shortly after the release. (Stratechery)

• Serendipity: The Role of Luck in Your Life and Career: But the simple truth is that random events can and do lead to unanticipated outcomes that drive much of what occurs. We underestimate fortune, randomness, and chance at our own peril.  (The Big Picture)

• A solar-powered rubbish-eating boat? The vessel chomping plastic waste out of the sea: Guided by floating barriers, the Interceptor has already stopped more than 143,000lbs of rubbish from entering the Pacific from one LA river (The Guardian)

• There’s a Name for the People Who Drain You: “Hasslers” make life more difficult—and we can’t escape them. The Atlantic on the psychological literature classifying the high-maintenance people in our lives. Naming them is half the cure. (The Atlantic)

• The 2026 World Cup Is an Experiment Like No Other: The Ringer on the Trump-Infantino co-production now underway. The tournament is going to be a stress test for U.S. infrastructure and politics — in roughly equal measure. Why the vibes surrounding this World Cup are so cartoonishly bad—and why the beautiful game might beat all the bullshit. (The Ringer)

Video of the day: How a Short Unwanted Jalen Brunson REVIVED The New York Knicks.

Our Masters in Business interview this week was with Jean Eric Salata, Chair of EQT Group and Chair of EQT Asia. EQT is a purpose-driven global investment organization with over $310 billion in total assets under management, making it the largest private markets firm headquartered outside the United States.

 

NBA Championships, by Franchise (1947-2026)

Source: Reddit

 

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Telegram Founder Warns UK Social Media Ban Is Digital Iceberg About To Sink The Free Internet

Authored by Steve Watson via Modernity,

Telegram founder Pavel Durov told the Freedom Forum audience in Oslo that Western societies have already struck the iceberg and started sinking - yet most citizens remain in their cabins, convinced the ship of personal freedoms is unsinkable.

His remarks arrive precisely as Keir Starmer's government rams through a social media ban for under-16s that functions as the perfect pretext for mandatory digital ID, device-level scanning on every phone, and the practical elimination of anonymous speech online.

The policy is dressed in the familiar language of child protection. In practice it requires every major platform to verify ages with facial scans, passports or credit card data. What starts as a restriction on minors rapidly becomes a national system of internet passports.

Encrypted messaging apps currently sit outside the ban, but the same Online Safety Act framework already contains the levers to demand backdoors later. Tech executives who refuse to turn every smartphone into a government scanner face up to five years in prison.

Durov drew on two decades running major platforms and direct experience with state pressure in Russia, the EU and France. The core message was unmistakable.

"Our ship has already hit the iceberg. We have already started to sink without even realizing it. And I'm talking about the ship of our personal freedoms."

He continued, "Passengers of the Titanic actually didn't want to leave the ship for almost two hours after it hit the iceberg. People thought the Titanic was unsinkable. Lifeboats left half empty."

"Only in the last half an hour people started to panic, but by that time it was already too late. Not enough lifeboats, nowhere to hide, nowhere to run," Durov stressed.

He then turned to concrete examples. In the United Kingdom, thousands of people are arrested each year over social media posts. In Germany, posting something politically incorrect can mean fines or prison time. Durov described how "child protection" rhetoric short-circuits debate.

"Once somebody says child protection, all of a sudden it triggers very ancient, very deep parts of our brain. Who would be against protecting children? It completely bypasses logic. It bypasses debate. It bypasses rationality," he explained.

"All of a sudden, people are ready to give up everything. And authoritarian regimes were able to smuggle all kinds of repressive legislation under the guise of protecting children," he added.

He recounted Russia's failed attempt to ban Telegram. Authorities blocked the app, yet 95 percent of Russian teenagers still used it every month - many via VPNs that exposed them to far more fringe and illegal content than the original platform ever hosted.

The pattern repeats wherever governments claim they must control speech to save the children.

Starmer announced the under-16 social media ban as a way to "give children their childhoods back." The accompanying rules demand age verification across Snapchat, TikTok, YouTube, Instagram, Facebook, X and more.

Additional restrictions hit livestreaming, stranger messaging in games, and impose curfews and scroll limits for under-18s. Regulations are meant to be in force before Christmas 2026, with full enforcement by April 2027.

The machinery does not stop at apps. A parallel device-level system using "nudity detection" and monitoring is already scheduled for rollout by major phone makers this September.

If companies drag their feet, legislation will make client-side scanning mandatory. The phone itself becomes the gatekeeper - before any message is encrypted or sent.

Big Brother Watch put it plainly: this is population-wide ID checks for everyone who wants to use a phone, tablet or laptop. The government that has repeatedly failed to protect children from grooming gangs and ideological capture in schools now positions itself as the only body qualified to decide what counts as safe online."

"Its own evidence review found only a small correlation between social media use and wellbeing - no proven causal harm. That finding has been buried while the infrastructure races forward," the organisation added.

The coercion extends to corporate leadership. Draft rules under the Online Safety Act would impose up to five years in prison on tech executives whose companies refuse to build and deploy scanners that inspect every photo, video and message on user devices before encryption.

Client-side scanning turns personal phones into always-on surveillance endpoints. Privacy advocates note the "child safety" framing masks the broader project: making every smartphone a mandatory informant for the state.

Encrypted messaging services such as Signal remain exempt from the current social media ban. That exemption is fragile. The same Online Safety Act that created the age-verification regime already contains provisions that can later demand access to private communications. Signal has not stayed silent.

The company's leadership has made clear it will not implement dystopian combinations of age verification and content scanning that "will not safeguard children" and "endanger us all."

Recent statements indicate Signal is prepared to stop providing services in the UK rather than compromise the encryption its users rely on.

?BREAKING: The President of the messaging app Signal has threatened to STOP all services in the UK due to government regulations and overreach ?? pic.twitter.com/HSRNlsXAiv

- Tironianae ?? Z. - Ultra Verbum Vincet (@Tironianae) June 16, 2026

BRILLIANT!

The Signal App tell the Starmer Gov't where to go!

& EXPOSES their surveillance agenda in one go! pic.twitter.com/tiZSq0XxQZ

- Jane Rochford Boleyn ?? (@VictoriaHa50399) June 13, 2026

The warnings expose the surveillance agenda hiding behind child-protection language. Once the verification and scanning infrastructure exists, expanding it to messaging apps becomes a regulatory tweak rather than fresh legislation.

YouTube warned that blanket bans simply push young people toward anonymous, less safe corners of the internet and away from curated educational content. Meta argued against forcing users to hand over ID to dozens of separate services and floated the idea of device-level or app-store age checks instead.

These responses reveal both resistance to fragmented compliance and the companies' own interest in centralised systems they can control.

The underlying trend remains the same: the open, pseudonymous internet is being replaced by a permissioned version that requires state-approved identity.

Starmer has been branded authoritarian for good reason. The ban arrives alongside documented overreach: more than 80,000 arrests for social media posts in recent years, selective enforcement that appears to spare ideologically aligned platforms, and a broader project of tying smartphone access to digital ID.

There is a high chance Starmer will be out of office by year's end, replaced by his own party - yet the machinery he is building will outlast him.

Keir Starmer has been branded 'authoritarian' amid his crackdown on social media in the UK.

Starmer is banning under 16's from social media but concerns are growing the law may be used to push for digital ID cards.

He has a 78% chance of being out as PM by the end of the year. pic.twitter.com/fo1JJv7EBe

- Oli London (@OliLondonTV) June 15, 2026

The UK version accelerates a global pattern already visible in Canada, Australia and the EU. Each jurisdiction uses slightly different pretexts while constructing the same core capability: verified digital identity standing between citizens and the open internet.

Once every post, search, message and transaction requires state-linked identity, dissent that was previously difficult to police at scale becomes routine administrative action. An entire generation will grow up treating constant surveillance as normal.

History shows these systems are never limited to their initial stated purpose. The technology now being embedded will serve whatever purpose future governments assign it.

Durov's warning from Oslo remains the clearest summary. The ship has already hit the iceberg. The only question is how many passengers will still be below decks when the water reaches their cabins.

Tyler Durden Wed, 06/17/2026 - 05:00

Rolls-Royce Bags Third European SMR Deal While Adding Gas-Cooled Reactor Design

Rolls-Royce SMR just added its third major European contract. Videberg Kraft, backed by Sweden’s utility Vattenfall, selected the UK design for three units on the west coast, making it Sweden’s first new nuclear plant in more than forty years. 

The multibillion-pound export win, actively supported by UK government trade efforts, lands on top of existing deals in the UK and Czechia and makes Rolls-Royce the only SMR developer with multiple binding commitments across the continent.

We tracked when the UK advanced its own program, Great British Energy – Nuclear signed a contract earlier this year to move forward with initial units at Wylfa in North Wales. CEZ in the Czech Republic had already inked an early works agreement for deployment at Temelin, with plans ultimately targeting up to 3 GW of Rolls-Royce capacity and even taking a 20% stake in the company’s SMR subsidiary.

The Sweden announcement came one day after Rolls-Royce, the UK National Nuclear Laboratory, and Japan’s JAEA signed trilateral memorandums to accelerate High-Temperature Gas-Cooled Reactor (HTGR) technology and the next generation of coated particle fuel that goes with it. 

The program is positioned as complementary to the existing 470 MWe pressurized-water SMR. HTGRs are different reactor technology, different size and power output, but the same modular construction philosophy and supply-chain approach.

The fuel development announcement carries added weight given the UK's history of developing the first generation of advanced, durable nuclear fuel. 

Coated particle fuel, the accident-tolerant form that enables the high-temperature safety case for these gas reactors, traces its conceptual lineage straight back to BISO work done in the UK during the Dragon reactor program in the 1960s. TRISO evolved from those early British coated-particle concepts. 

Rolls-Royce and its partners are now moving to qualify and ultimately manufacture next-generation versions of this fuel form. 

The US connection fits the same pattern. Rolls-Royce is already embedded in BWXT’s Project Pele effort for the Department of Defense, delivering the power conversion module for the mobile microreactor that BWXT is building with TRISO fuel and that targets operation around 2028. 

The growing roadmap and list of projects is great for the company and the rolling press releases, but, similar to most of the other Western reactor developers, the company is lacking with getting nuclear-grade steel in the ground. Site prep work is ongoing in the UK, but given the significant delays with the UK's current larger reactor program, it could still be years before Rolls-Royce reaches criticality on any of their new facilities. 

Tyler Durden Wed, 06/17/2026 - 04:15

BBC Hands Soros-Linked Pro-Migrant Campaigners Direct Access To Shape Children's Show

Authored by Steve Watson via Modernity,

Britain's state broadcaster has opened the door to pro-migrant activists who openly brag about steering storylines in a CBBC comedy aimed at primary school children.

While small boat crossings continue and communities deal with the daily consequences of unchecked arrivals, the BBC opted to let outside campaigners help frame migration narratives for the youngest viewers instead of reflecting the scale of policy failure.

The programme in question is Pickle Storm, a CBBC (Children's BBC) series following a young 'alien' who flees persecution on her home planet and settles in a British town. Her family encounters 'humorous' culture shock moments. Reports note that pro-migrant charity Heard held meetings with the show's producers at Blackdog Television, including at least one BBC children's programming representative on a Zoom call.

Heard later claimed in its own materials that producers used the input to inform the second series, which aired in 2025. The charity described the engagement as part of a strategy to "tap into children's media and directly impact framing of migration in children's content."

Heard presents itself as seeking to "shift public attitudes, norms and policy preferences." A spokesperson told The Telegraph the group helps media professionals "represent those experiences fairly and accurately" while focusing on "building understanding between people."

The BBC claims that the charity "had no power to influence editing or production of its programming" and described expert consultations as standard practice.

Heard has received more than £4.5 million in grant funding since launching in 2021. Much of it flows from left-leaning foundations including the Esmée Fairbairn Foundation, Paul Hamlyn Foundation, and seed support linked to George Soros's Open Society Foundations.

Additional backing has come through Arts Council England and Comic Relief channels. Similar efforts by another group, Imix, have secured over £2 million since 2019 from National Lottery and Comic Relief sources.

Imix focuses on "building social support for migration" by targeting "persuadable audiences" through journalists and media placements. It has claimed credit for stories placed on BBC News and in newspapers, including pieces about refugees finding new homes in Britain and coverage of LGBT refugees from Africa.

The group also consulted on sympathetic portrayals in drama, including an asylum seeker storyline on ITV's Coronation Street.

These operations form part of a coordinated "narrative change" push funded by globalist and left-wing sources. The goal is to soften public resistance to high levels of migration through entertainment, news, and children's programming rather than open debate.

This approach fits a wider pattern already documented across UK institutions. Schools have been drawn into similar messaging through programmes that supply reading lists and events promoting unconditional welcome for new arrivals, including those coming by small boat.

Government-backed initiatives have gone further by embedding warnings inside children's content that questioning mass migration or noticing rapid cultural shifts can signal extremist thinking.

One Home Office-funded video game aimed at 11- to 18-year-olds portrays researching immigration statistics or expressing concern over changes to British values as routes that raise an "extremism meter" and trigger Prevent referrals or counseling for ideological issues.

Counter-terrorism police campaigns have reinforced the message by warning teenagers that sharing material they consider merely "funny" online can result in device seizures, criminal records, and barriers to education if authorities later classify it as 'terrorist' content.

The same institutions pushing positive migration framing for young children simultaneously expand surveillance-style tools that treat skepticism as a gateway to radicalisation. This creates a closed loop: state media and charities shape the approved narrative for the next generation while official channels flag dissent for intervention.

Critics have highlighted the hypocrisy. While proposals surface to restrict platforms accused of spreading "disinformation" on migration, the BBC faces no equivalent scrutiny for allowing activist input into content consumed by primary school children.

Truly a mystery why BBC iPlayer isn't part of the ban, but YouTube is. pic.twitter.com/zgQ15REqKX

- Paul Joseph Watson (@PrisonPlanet) June 16, 2026

These efforts form only one layer of a much larger state apparatus dedicated to narrative management. The Home Office's Research, Information and Communications Unit, operating under the Prevent banner, functions as a dedicated nudge unit that seeds favourable migration messaging while actively working to suppress and reframe backlash.

Leaked operations show the unit advising police intelligence teams to identify online protest calls and supplying strategic guidance to portray demonstrators as unsympathetic thugs rather than citizens raising legitimate concerns, all aimed at behavioural change.

It has also inserted itself into family liaison after migrant-linked incidents, scripting statements with generic phrasing that pivots to calls for calm and emphasis on migrant contributions instead of unfiltered grief or anger.

Heard and aligned groups frame their work as countering "well-funded anti-migrant campaigns and the disinformation that spreads hostility online." An Imix spokesman described narrative change work as "listening to people's real concerns, being honest, and meeting them where they are."

The results on the ground tell a different story. Record net migration, ongoing small boat arrivals, and visible pressures on housing, schools, and healthcare continue regardless of polished storylines about aliens finding refuge or hippos making room for newcomers.

Parents and taxpayers fund the BBC through the licence fee. They also fund many of the grants and public bodies supporting these narrative efforts. The claim that such consultations are harmless "standard practice" rings hollow when the groups involved explicitly measure success by their ability to shift attitudes among the youngest audiences.

Britain's approach to mass migration has produced measurable strains. Rather than confront those outcomes directly, captured institutions have chosen to engineer consent from the ground up, starting with children's television and classroom materials.

This is not education. It is narrative management dressed as entertainment and safeguarding. The public deserves broadcasters and schools that reflect reality instead of laundering activist priorities through content aimed at seven-year-olds.

Removing third-party ideological programmes from classrooms would be a minimal first step toward restoring balance and protecting the next generation's right to form their own views without state-approved filters.

The pattern is clear and consistent. Institutions captured by globalist priorities use every available channel - television, schools, games, and even police messaging - to suppress open discussion of immigration failure while accelerating efforts to make the next generation more receptive to it.

Parents who object are not extremists. They are the last line of defence for their children's ability to think independently.

Tyler Durden Wed, 06/17/2026 - 03:30

Which Countries Americans Like Most (And Least)

Public opinion offers a window into how Americans perceive the world beyond their borders.

Using Gallup survey data from February 2026, this ranking, via Visual Capitalist's Dorothy Neufeld, shows how Americans view 21 major countries, from longtime allies to geopolitical competitors.

The results provide a snapshot of global perceptions at a time of shifting international relationships and rising geopolitical tensions.

How Americans View 21 Major Countries

The table below shows favorable and unfavorable ratings based on a Gallup survey of 1,001 U.S. adults conducted in February 2026.

America’s Allies Dominate the Top

Canada remains one of America’s most favorably viewed countries, but its 80% rating is the lowest Gallup has recorded.

Japan, Canada, Italy, Denmark, France, the United Kingdom, and Germany all rank near the top of the list. Their strong economic, security, and cultural connections to the U.S. highlight how foreign relationships can shape public perceptions.

Notably, each of the top seven countries is either a NATO member or a formal U.S. treaty ally.

Japan and Italy moved ahead of Canada and Britain in 2026 after favorability toward both longtime allies fell to record lows. Meanwhile, Japan’s rating has climbed steadily from 65% in 1995, reflecting decades of expanding economic and security ties.

Mexico ranks eighth overall with a 66% favorable rating, suggesting that deep economic and cultural connections can outweigh political tensions.

Israel Stands Apart

Israel occupies a uniquely divisive position in American public opinion. In 2026, 46% of Americans viewed Israel favorably, while 48% viewed it unfavorably, making it one of the few countries in the survey with nearly equal shares of positive and negative views.

The divide comes amid changing attitudes toward the Middle East conflict. According to Gallup, 2026 marked the first year in more than two decades that Americans expressed greater sympathy for Palestinians than Israelis. While this measure differs from overall country favorability, it highlights how public opinion on the region has shifted in recent years.

What the Results Reveal

The rankings suggest that public opinion is shaped by more than economics or geography alone.

Countries with longstanding diplomatic, security, and cultural ties to the United States tend to receive the strongest ratings, while nations associated with conflict or strategic competition generally rank near the bottom.

At the same time, the results highlight how perceptions can evolve. Japan has steadily climbed in favorability over the past three decades, while support for longtime partners such as Canada and the United Kingdom has softened in recent years.

Learn More on the Voronoi App 

To learn more about this topic, check out this graphic on the countries losing trust in America.

Tyler Durden Wed, 06/17/2026 - 02:45

Yet More Churches Torched; Sustained Attack On Christianity Gathers Pace

Authored by Steve Watson via Modernity,

France suffered another direct hit to its Christian heritage last week when two historic religious sites burned within hours of each other.

A 17th-century chapel in Brittany lost most of its roof and part of its framework, while a centuries-old cloister housing thousands of rare books in the southwest saw its library devastated.

These blazes fit a widening pattern of attacks on churches and sacred sites that shows no sign of slowing, even as the state claims it lacks funds for preservation while directing resources elsewhere.

Another church on fire in France last night. pic.twitter.com/7lzLToSOvg

- RadioGenoa (@RadioGenoa) June 13, 2026

The incidents occurred on June 12. In Trégastel, Côtes-d'Armor, flames engulfed the Chapelle Sainte-Anne-des-Rochers, built in 1635 and already closed to the public since March for structural safety reasons.

Firefighters battled the blaze that destroyed roughly 75 percent of the slate roof and caused part of the charpente to collapse. Artworks and classified statues inside were saved.

One widely shared post captured the events plainly: "Another church on fire in France last night." It highlighted the Trégastel chapel while noting this was one of two such fires that day.

Hier une Chapelle à Tregastel est en feu mais aussi un cloître à Condom où des livres du XVIe siècle partent en fumée (plus de 4300 livres archivés).
C'est quand même curieux tous ces édifices religieux qui font la fierté de la France et ses racines chrétiennes qui brulent!
Et... pic.twitter.com/nc84Clfy0r

- ?? fred le gaulois ?? Uniondesdroites ?? (@FredGaulois) June 13, 2026

Hours later, in Condom, Gers, fire broke out in the médiathèque located in the historic cloister attached to the cathedral. Hundreds of square meters of roofing burned, and the collection of over 4,300 archived volumes suffered heavy damage from flames, water, and smoke.

The cathedral structure itself was protected, but the loss to local history and scholarship is severe.

Christian heritage sites that define French identity keep burning while the state pleads poverty for repairs yet finds ample resources for mass immigration and other priorities. Crowdfunding appeals and calls on the Fondation du Patrimoine now appear routine for these "accidental" losses.

These latest fires arrive amid a documented surge in incidents targeting Christian places of worship. Reports indicate nearly 50 fires or arson attempts on churches and Christian sites in France in 2024 alone, representing roughly a 30 percent rise from 38 the prior year.

Broader tallies over recent years point to well over 100 such events. France consistently records among the highest numbers of anti-Christian acts and church fires in Europe.

Just a coincidence... pic.twitter.com/0GhfhSSPmG

- Gerda van de Pol (@Gerdavande12965) June 13, 2026

Previous coverage has tracked the gutting of historic churches across France, often with officials quick to cite accidents or brush fires while skepticism mounts over the sheer volume and timing.

Similar blazes have struck in Canada and the UK, with governments showing little urgency compared to their responses on, shall we say... other issues.

In the UK, Prime Minister Starmer voiced immediate concern and backed funding boosts for mosque security after one incident, yet stayed silent as historic churches burned.

The contrast reveals selective priorities. Christian sites that have stood for centuries face repeated destruction, while the political class appears more invested in demographic transformation than in safeguarding the civilization that built the nation.

Mainstream coverage often frames each blaze in isolation, citing investigations without clear conclusions or motive. Yet the cumulative effect is unmistakable: a steady erosion of physical symbols of Christianity.

Heritage advocates have long warned that rural churches and smaller sites receive inadequate protection and funding compared to flagship projects. When fires strike, the response frequently defaults to donation drives rather than systemic prevention or serious scrutiny of patterns.

France's Christian roots in particular are under sustained pressure from vandalism, desecration, arson, and demographic shifts driven by open-border policies. Each new incident chips away at the tangible inheritance of Western civilization while elites prioritize globalist projects and mass migration over preservation.

These fires are not random bad luck or isolated failures. They form part of a broader assault on Christianity and the cultural foundations it provided for Europe and the wider West. When governments downplay the trend, fast-track replacement-level immigration, and offer only crowdfunding as a fix, they signal that Christian heritage ranks low on the priority list.

Nations serious about their identity do not let their foundational landmarks burn while claiming helplessness. They secure borders, enforce laws without favor, and treat attacks on their civilizational core as the emergencies they are.

France's repeated losses serve as a warning: without a sharp course correction toward sovereignty and cultural self-preservation, more irreplaceable pieces of the Christian inheritance will vanish.

Tyler Durden Wed, 06/17/2026 - 02:00

The AI Threat SciFi Predicted Is Right On Our Doorstep

Authored by Mike Fredenburg via The Epoch Times,

Science Fiction has long predicted the threats and challenges posed by AI. In the Star Trek universe, particularly in the original series, Season Two, Episode 24, “The Ultimate Computer,” Dr. Leonard McCoy delivers this haunting line: “Compassion: that’s the one thing no machine ever had. Maybe it’s the one thing that keeps men ahead of them.” The line comes in the aftermath of a revolutionary new AI computer, the M5, using its soulless AI logic to turn a training exercise into a deadly massacre. In another Star Trek episode, we meet Nomad, a genocidal AI cleansing the universe of biological imperfections.  

Foreshadowing the rise of AI with immense hacking powers such as Anthropic’s Mythos, the reimagined “Battlestar Galactica” (2003–2009) has humanity’s AI-powered Cylons using their ability to hack any network-connected computer to rebel, nearly eradicating their creators. In the “Terminator” franchise, Skynet got “smart” (achieved sentience) and determined mankind’s fate, “extermination,“ in a ”microsecond,” unleashing nuclear Armageddon on humanity. These narratives warn that artificial intelligence, without robust safeguards, can lead to catastrophe. As AI capabilities continue to accelerate in 2026, fiction is rapidly converging with reality. Software protections, industry standards, and patchwork regulations are inadequate. A stronger foundation; immutable hardware constructs and changes in national and international law are essential.

Isaac Asimov’s Three Laws of Robotics 

As described in the Institute of Electrical and Electronics Engineers’ Spectrum magazine, renowned scientist and science fiction writer Isaac Asimov’s Three Laws of Robotics, introduced in his “I, Robot” stories, provide a thoughtful framework for artificial intelligence safeguards:

1. A robot may not injure an individual human or humanity, or through inaction allow a human or humanity to come to harm. 

2. A robot must obey the orders given to it by human beings except where such orders would conflict with the First Law. 

3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law. 

Long story short, Asimov’s Laws are a good starting point, but as described in great detail in Asimov’s follow-on masterwork, the Foundation Series, they are inadequate when it comes to protecting genuine humanness. Further, it will be a real challenge to hardwire equivalents into AI as was done in Asimov’s universe via the “Positronic” brain. But undertaking the challenge to create safeguards that go beyond software-based approaches is critical to ensuring that AI only benefits mankind.

The Inadequacy of Software Safeguards, Encryption, and Regulation Alone 

Software-based guardrails are modifiable and vulnerable to hacks and exploits.

And history demonstrates the fragility of self-regulation: the Equifax data breach (2017), the SolarWinds supply chain attack (2020), the MOVEit vulnerability (2023), and ongoing breaches show that corporate promises of “robust protections” frequently fail.

We are in an AI Wild West, with insufficient binding global or national frameworks.

True Protection Via Immutable Hardware Gatekeepers

History demonstrates that software-based safeguards cannot currently, and will never be able to provide the level of protection required. As inspired by Asimov’s Positronic brain, safeguards instantiated into ASICs (Application-Specific Integrated Circuits) will provide a critical layer that provides the guardrails that will increase the chances that AI benefits, rather than harms, mankind. These specialized chips take millions of lines of complex software logic or rules that are physically etched directly into the silicon hardware itself. Once the chip is manufactured and deployed, those rules become immutable: they cannot be altered, updated, or bypassed through software changes, patches, or hacking attempts. The only way to modify the embedded logic is to design and physically produce an entirely new ASIC chip, a process that is expensive, time-consuming, and highly visible. This creates a “hardware firewall” that is far more reliable than any software-based safeguard, ensuring critical safety constraints remain locked in place no matter how clever or aggressive future AI systems become.

The ASICs will act as physically fixed, inline gatekeepers. And in the future, both AI-focused and general-purpose processors could incorporate these tiny ASICs directly into the CPU as a hardware AI screening layer as a standard, non-optional part of the CPU.

Some Suggested Core Design Principles:

• With the hardware layer acting as the interface to external interactions, such as is the case with some smartphones today, the AI can freely think, plan, and simulate in software without being slowed down by the ASIC. Only when the results are being communicated externally will the ASIC become involved as a gatekeeper to ensure that the actions proposed by the AI pass muster in terms of safety and other constraints.

• Training Incentives: Cost/loss-based algorithms, etc., will reward the AI for routing actions through the hardware screener and severely penalize it for attempting to bypass the hardware gatekeeper layer. Hence, the AI will be incentivized not to try to bypass its restrictions. 

But such an important layer will only work if its use becomes universal.

Without the force of law to mandate such AI guardrails, they will fail to protect humanity.

Today, particularly in the Ukraine–Russia war, efforts are being made by both Russia and Ukraine to allow drones that have been cut off from their human operators to autonomously continue their mission to kill enemy combatants. This must not be tolerated. Just as the international community has banned chemical, biological, and gas warfare, so must AI be banned from making any final decisions that result in harm to humans. This could be accomplished via an explicit update to the Geneva Conventions to prohibit autonomous lethal decision-making by AI systems.

But AI can cause harm beyond the battlefield. Consequently, along with updating the Geneva Convention, laws must be put in place that address the non-military application of AI. To prevent misuse of AI in so-called civilian applications, there must be very serious consequences, including financial penalties steep enough to threaten the organizational viability of companies and non-profits, prison time for individuals, and economic sanctions or even military action against governments for running AI systems without the required immutable hardware safety layer and other protections.

The above is only an initial cut of what the framework should include, but whatever form it takes, it should embody the spirit of Asimov’s Three Laws, with the addition of ensuring human uniqueness is respected. The current patchwork of laws, standards, and technologies is wholly inadequate.We need a comprehensive, contiguous framework in place, supported by the full force of national and international laws that put guardrails on AI.

Finally, we must resist the siren call of convenience and efficiency when it comes to making decisions that can harm human beings and ensure that moral agents who are accountable to mankind and their Creator—i.e., human beings—make such decisions, not soulless AIs.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Tue, 06/16/2026 - 23:05

China Revives Heavy Naval Firepower With New 155mm Gun That "Could Support An Attack On Taiwan"

As modern naval combat increasingly relies on aircraft, missiles and unmanned systems, China is investing in a capability many navies have largely moved away from: heavy naval artillery, according to South China Morning Post.

Recent reports indicate that the PLA Navy is testing a new 155mm naval gun, a calibre larger than any main gun currently in active naval service. The weapon has been observed aboard the experimental vessel Wu Yunduo, which appears to have completed a round of sea trials near Dalian earlier this year. Such testing would typically assess accuracy, fire-control performance, platform stability and the weapon’s ability to sustain repeated firing under operational conditions.

The gun first attracted attention in 2024 when a prototype was photographed during transport. Information visible on the system suggested it was manufactured by Norinco, weighs nearly 22 tonnes and can fire precision-guided ammunition. Images released later showed the weapon installed on a test ship, with a turret design that appears intended to reduce radar visibility.

The SCMP writes that the project stands out because large-calibre naval guns have long been overshadowed by missiles and carrier aviation. For decades, navies have favoured weapons capable of striking targets far beyond the horizon with greater precision. As a result, ship guns have largely been relegated to supporting troops ashore or handling limited surface engagements.

China’s interest in reviving heavy naval gunfire appears closely tied to amphibious warfare. In any large-scale landing operation, sustained bombardment of coastal defences could be essential. Compared with missiles, naval artillery can deliver a much higher volume of fire at significantly lower cost, making it useful for suppressing defensive positions and supporting advancing forces.

Analysts note that a 155mm system would represent a substantial increase in capability over the PLA Navy’s existing 130mm guns carried by its most advanced destroyers. Depending on the ammunition used, the new weapon could potentially engage targets more than 100km away and perhaps even beyond 200km. Operating at such distances would require support from drones or other reconnaissance assets to locate targets, assess damage and correct fire.

Economics may be just as important as range. Precision missiles remain expensive, particularly when used against relatively low-value targets. A naval gun can provide sustained firepower at a fraction of the cost, making it attractive for coastal bombardment, suppression missions and prolonged operations. Additional savings could come from sharing ammunition and logistics with the PLA Army’s existing family of 155mm artillery systems, which already includes guided, rocket-assisted and extended-range projectiles.

The US Navy’s experience offers a contrasting example. Although its Zumwalt-class destroyers were equipped with 155mm guns, the programme struggled because specialised long-range ammunition became prohibitively expensive, ultimately leading to the guns’ replacement with missile-focused systems.

China has not revealed which ships may eventually carry the new weapon. Amphibious vessels are considered strong candidates because their current armament is relatively limited when it comes to shore bombardment. Installing a larger gun could significantly improve fire-support capabilities during expeditionary or landing operations.

The weapon may also have applications beyond attacking land targets. Military observers suggest it could be used against drone swarms, unmanned surface vessels and other emerging threats when paired with specialised ammunition. In lower-intensity missions, it could provide a cost-effective alternative to missiles for maritime patrol, anti-piracy operations, warning shots and the interception of non-compliant vessels.

While China continues to develop advanced technologies such as railguns and laser weapons, the new 155mm system reflects a more practical approach: enhancing naval firepower with a mature, proven technology that can be fielded relatively quickly and integrated into existing military logistics networks.

Tyler Durden Tue, 06/16/2026 - 22:10