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Walsh is about to "take the helm" of the Federal Reserve—can he handle five major challenges? Walsh will immediately face the following five major challenges after taking office: 1. Walsh and the Fed's independence will face an almost imminent test. Economists believe Walsh's start will be tough. The market will closely watch whether Walsh can formulate policies that differ from the president's wishes before the crucial midterm elections in November. "He will face tests from day one," Shenfeld said. "Trump wants an immediate rate cut, but Walsh is unlikely to vote for a cut in the short term." Walsh's former colleague Randall Kroszner said Walsh is used to criticism and won't be intimidated. "During the global financial crisis, the Fed was under enormous pressure—what they should and shouldn't do. There was direct criticism and behind-the-scenes blame," he added. Meanwhile, over the past nine months, the Federal Open Market Committee (FOMC) has shown greater independence, with fewer unanimous decisions. Just a few months ago, it was thought the Fed might cut rates once or twice this year to give Walsh a "honeymoon period." But recent high inflation caused by the Iran war will inevitably hinder rate cuts. Worse, according to Wall Street veteran and founder of investment advisory Yardeni Research, Ed Yardeni, in a client report, the internal debate at the Fed centers on whether Walsh can prevent the central bank from hiking rates rather than cutting them. 2. Walsh's main argument supporting rate cuts is facing increasing skepticism. Walsh has clearly stated in speeches and interviews that he believes we are at the beginning of an economic "golden age," with AI boosting productivity, promoting economic growth, and reducing corporate costs. He says that despite inflation being above the Fed's 2% target, these factors justify rate cuts. His views align with the White House economic team. Walsh has not yet revealed how many rate cuts he thinks are appropriate this year. But according to "Trump confidant" and Fed Governor Stephen Millan, productivity gains mean four rate cuts are needed this year. Former Bank of America chief economist Ethan Harris recently posted that Fed officials clearly do not agree with the "golden age" theory. Millan calls for significant rate cuts but lacks support from other Fed officials. In other words, Walsh's rate cut proposal may face similar resistance. Former U.S. Treasury Secretary and Fed Chair Janet Yellen also criticized this week in an article that Walsh only focuses on the prosperous side of AI. Yellen and Jared Bernstein, who served as chair of the White House Council of Economic Advisers during the Biden administration, both point out that the other side of AI is that it will stimulate increased corporate investment and consumer spending, both of which will push inflation higher, offsetting the need for rate cuts. 3. The relationship with the market is unstable (at least initially). TS Lombard Global Macro Managing Director Dario Perkins said Wall Street has long held the view that the market will "test" the new chair through a sharp decline. Barclays economists cite recent research showing that new Fed chairs typically face some "test" within the first six months in office, meaning stock prices fall. Since 1930, the U.S. stock market has on average dropped 5% within one month and 12% within three months after a new Fed chair takes office. Barclays emphasizes, "This does not happen before the new appointee officially takes office... If history is any guide, the real test is more likely to come after May." Perkins believes it should be thought of the other way around—that the new Fed chair should test the market by advocating tighter policies than expected to build credibility. He points to the most famous example: the October 1987 "Black Monday" stock market crash, when Greenspan unexpectedly raised rates. The White House appointed Greenspan because they thought he would support easing policies. "If Walsh takes a similar approach to Greenspan, the market definitely won't accept it. But given the current inflation situation, it's not entirely unreasonable," he added. 4. The changes Walsh seeks will be difficult to implement. Morgan Stanley Chief U.S. Economist Michael Gapen recently said in an interview that Walsh's two main complaints about the Fed are that it has "too much" influence on financial markets and "talks too much." Besides rate cuts, Walsh's other major policy proposal is balance sheet reduction. In addition to previous high inflation, Walsh also blames the Fed's expanded balance sheet for social division in the U.S. Walsh said at a hearing: "I think the Fed is partly to blame for the divide between 'those who own financial assets' and 'those who do not.' After all, the Fed's balance sheet has expanded from $800 billion in 2006 to a scale an order of magnitude higher today." Analysis points out that in the short term, Walsh's push for balance sheet reduction will face constraints from financial liquidity, market volatility, and even Trump’s midterm election pressure. He needs to first ease financial regulation to allow banks to hold more U.S. Treasuries, so it is difficult to achieve in the short term. Fitch Ratings economists say balance sheet reduction carries risks and the Fed will not act quickly. Compared to rate cuts and balance sheet reduction, "talking less" may currently face the least resistance for Walsh—he may not hold press conferences after FOMC meetings like Powell, and might even cancel the release of the "dot plot." 5. Working with people he has criticized. In fact, since leaving the Fed, Walsh has been critical of the Fed. This may have helped him get selected by Trump as Fed chair but could also make his leadership at the Fed more difficult. Former Fed Vice Chair Donald Kohn pointed out in an email that Walsh's criticism of the Fed since 2011 has been "sharp-tongued." Now, Walsh will be back inside, working with people he once harshly criticized. "He knows he needs to use great skill, gather evidence, and analyze to support the policy direction he wants to pursue. I hope this process will bring good results for the U.S. economy," Kohn wrote.

Long-term bond sell-off, interpreting the "Tail Effect" Long-term bond sell-off alarm sounds: The winning yield of the 30-year US Treasury auction has exceeded 5.0% for the first time since the 2007 financial crisis. 1. Basic Definition: What is the "Tail Effect" Tail Effect / Tail Spread (Tail) refers to the difference between the highest winning yield in a government bond auction and the market's expected yield before the auction[]. Positive tail: Winning yield > expectation → weak demand, cold subscription, issuer must offer higher premium to sell[]. The larger the tail: the more cautious the market is about long-term bonds, the stronger the selling pressure[]. 2. Tail Effect of Long-term Government Bond Sell-off: Three Layers of Transmission 1) Auction level: demand collapse, tail hits record high Bid-to-cover ratio declines: fewer buyers; Direct/indirect bid ratio decreases: domestic institutions and overseas central banks are retreating[]; Tail spread widens: 30-year often sees extreme values of 5–10bp (normal 0–1bp)[]. → Signal: Long bonds "hard to sell," confidence loosens[]. 2) Market level: negative feedback stampede, yields soar Longest duration, worst liquidity: 30-year most sensitive (duration ≈ 20), sold first; Stop-loss + deleveraging: yield rises → programmatic stop-loss → selling → yield rises again in a loop; Term spread widens: 30Y–10Y spread expands from 20–30bp to 40bp+, long-end risk premium surges. 3) Macro level: fiscal and financial conditions tighten Financing cost jumps: government bond interest payments surge, fiscal pressure intensifies; Global financial conditions tighten: long bond rates are benchmarks for mortgages and corporate bonds, rising → credit contraction, growth pressure; Safe-haven asset shaken: US Treasury "safe haven" halo weakens, risk of triple hit on stocks, bonds, and FX rises[]. 3. Typical Trigger Factors (2023–2025 cases) Inflation rebound: energy/prices exceed expectations, rate cut expectations delayed, long bonds pressured; Fiscal deficit out of control: bond supply surges, supply-demand imbalance; Geopolitical risk: Middle East conflict pushes oil prices up, inflation expectations rise again; Institutional behavior: year-end profit-taking, duration reduction, concentrated sell-off of ultra-long bonds. 4. "Last Bow" Signals of the Tail Effect (When approaching the turning point) Tail spread extreme values: tail >5bp for 3 consecutive auctions, pessimism fully released[]; Bid-to-cover ratio stabilizes: no new lows, marginal buyers return[]; Term premium peaks: 30Y term premium spikes then falls back, inflation/supply anxiety eases; Growth expectation downgrade: market shifts from "inflation worries" to "recession worries," long bond safe-haven demand rebounds. 5. Summary in one sentence The tail effect of long-term government bond sell-off is a chain reaction of long bond demand collapse → auction tail widening → yield stampede upward → tightening financing and financial conditions, essentially a concentrated market repricing correction on inflation, fiscal, and debt sustainability[].

Fed Official Turns Hawkish: Collins Says "Rate Hikes May Be Needed" Boston Fed President Susan Collins hinted at a possibility: if inflationary pressures spread further in the coming months, the Federal Reserve may need to consider raising interest rates, although this is not currently her most favored economic scenario. In an interview on Wednesday, Collins said she expects inflationary pressures triggered by the Iran war to eventually subside, and that the current shock masks evidence that underlying inflation is still declining. However, she also stated, "The probability of this scenario has decreased, while some other scenarios are less mild, and higher, more persistent inflation is entirely possible," which may require rate hikes. Collins pointed out three factors that could determine whether the Fed needs to raise rates. She said the most important is households' and businesses' expectations for future inflation—currently hovering at the high end of the historical range. She is also watching whether price pressures will spread from the energy sector to other goods and services, and to what extent tariffs will continue to transmit along the price chain. She believes wages are not a significant source of inflation. Rising inflation mechanically lowers the inflation-adjusted level of the Fed's policy rate, thereby reducing the degree of policy tightening without any official action. When asked whether the Fed might need to raise rates simply to prevent policy from becoming effectively looser in real terms, Collins said this is "one of the issues to consider." She added that the inflation-adjusted rate (i.e., the real rate) is "something worth close attention." But she emphasized that she focuses on broad financial conditions, not just the Fed's benchmark short-term rate. She described current borrowing conditions as supporting the recent resilience of the economy. Collins does not have a voting right on the Fed's rate-setting committee this year. She said she supported removing language at last month's meeting that implied the next rate move would be a cut. She said, "Adopting a more agnostic communication approach is appropriate." Collins directly linked the issue of statement wording to inflation expectations: she said only when the Fed maintains credibility through both rate decisions and communication will the public expect the Fed to sustain low inflation over the long term. "How we talk about policy, as well as actual rate decisions, both play a role in shaping this backdrop."

What are the shortcomings in the strategic mutual trust between Saudi Arabia and the United States? In five aspects—security guarantees, energy interests, regional strategy, political trust, and technological cooperation—the core deficiencies in the strategic mutual trust between Saudi Arabia and the United States are clearly outlined: 1. Security Guarantees: Asymmetric commitments, unreliable protection Saudi Arabia seeks to "legalize a mutual defense treaty" (similar to the US-South Korea treaty), but the US only offers a vague promise as a "major non-NATO ally" with no collective defense obligations. In critical crises, the US provides "selective protection": In 2019, when Saudi oil facilities were attacked by Iran, the US refused direct military intervention; in 2026, the US military prioritized protecting Israel, while Saudi facilities suffered retaliatory losses exceeding $50 billion. US military actions disregard Saudi sovereignty: In May 2026, before Trump announced the "Freedom Plan," Saudi Arabia was not informed; the Crown Prince learned of it via social media, considering it a serious humiliation; Saudi Arabia then closed the Sudanese Prince Airbase and banned US military overflights. Saudi Arabia refuses to be dragged into the US anti-Iran campaign: In January 2026, it publicly prohibited the US from using Saudi territory or airspace to attack Iran, fearing Iranian retaliation and unwilling to take sides. 2. Energy Interests: From "oil for security" to direct competition The old alliance foundation has collapsed: The 1974 "oil for security" agreement has effectively expired; in 2024, Saudi Arabia did not renew the petrodollar agreement, conducting oil trade in multiple currencies (including RMB). Oil price demands are fundamentally opposed: Saudi Arabia needs high oil prices (≥$96/barrel) to support its "Vision 2030" transformation; the US requires low oil prices ($70–80) to curb inflation, leading to frequent OPEC+ disputes. The US has become the biggest competitor: After the shale oil revolution, the US became the world's top oil producer, shifting from energy partner to market rival, often pressuring Saudi Arabia to increase production and lower prices. 3. Regional Strategy: Misaligned goals, Saudi Arabia "looking east" The US strongly pushes the "Abraham Accords": Pressuring Saudi Arabia to normalize relations with Israel, which Saudi Arabia firmly rejects, unwilling to sacrifice Palestinian rights or anger the Arab/Islamic world. Saudi Arabia leads Middle East autonomy: In 2023, under China's mediation, it restored diplomatic ties with Iran, breaking the US-led "anti-Iran camp"; it has increased energy and security cooperation with China and Russia, reducing dependence on the US. GCC internal struggles: Bahrain, Kuwait, Qatar, and UAE are pro-Western; Saudi Arabia and Oman are more autonomous; NATO invited the four countries but not Saudi Arabia, reflecting US efforts to court the four and counterbalance Saudi Arabia. 4. Political Trust: Human rights disputes + internal interference + leadership conflicts The Khashoggi case has caused long-term rifts: Since the 2018 murder of Saudi journalist Khashoggi, the US has continuously held Saudi high officials accountable and sanctioned them; the Crown Prince harbors extreme resentment toward the US. US interference in Saudi internal affairs: The US often pressures Saudi Arabia under the pretext of human rights, demanding reforms (e.g., women's rights, religious policies), which Saudi Arabia views as sovereignty interference. Personal leadership grudges: The relationship between Trump and Mohammed bin Salman has been volatile; in May 2026, it completely broke down over the "Freedom Plan," with mutual trust hitting rock bottom. 5. Technology and Trade: US defense posture, promises hard to fulfill F-35 arms sales stalled: Saudi Arabia seeks to purchase F-35s, but the US is legally restricted by "maintaining Israel's military edge" and has long withheld approval; Israel strongly opposes and ties this to Saudi-Israeli normalization. High-tech embargoes: Saudi Arabia urgently needs AI chips and nuclear technology, but the US strictly limits exports citing "security controls," hindering core technology cooperation. Investment commitments hard to realize: Saudi Arabia pledged $1 trillion in US investments, but actual execution is difficult (due to oil price volatility and large domestic project expenditures); the US also imposes scrutiny on Saudi investments, reflecting mutual trust deficits. In summary Security promises are hollow, energy interests clash, regional strategies conflict, political disputes run deep, and technological cooperation is blocked—these five structural contradictions compound, leading to severe deficiencies in US-Saudi strategic mutual trust, with the alliance shifting from "unbreakable" to "fragile and brittle."

NATO plans to invite representatives from the four Gulf countries—Bahrain, Kuwait, Qatar, and the UAE—to attend the summit scheduled for July 7-8 in Ankara, Turkey's capital. Why is Saudi Arabia not invited? The NATO Ankara summit only invites Bahrain, Kuwait, Qatar, and the UAE, excluding Saudi Arabia. The core reasons are: Saudi Arabia is not a NATO “global partner,” there is insufficient strategic mutual trust between the US and Saudi Arabia, Saudi Arabia is unwilling to be overly tied to the West, and internal Gulf Cooperation Council (GCC) power struggles. These four factors combined lead to this outcome. 1. Status Threshold: Saudi Arabia is not on NATO’s “global partner” list NATO has an official “global partner” mechanism that includes Bahrain, Kuwait, Qatar, and the UAE (the four Gulf countries), but excludes Saudi Arabia and Oman. Partner countries can be invited to meetings, participate in joint military exercises, and share intelligence; Saudi Arabia lacks this status and is not routinely invited. Although there have been frequent high-level visits between NATO and Saudi Arabia from 2023 to 2026, Saudi Arabia has not been formally accepted as a partner country, and cooperation remains at the “dialogue” level rather than “institutionalized” [(NATO)]. 2. US-Saudi Contradictions: Strategic mutual trust has fallen to recent lows Oil and inflation dynamics: The Biden administration is unhappy with Saudi-led production cuts that raise oil prices, affecting US inflation and elections; Saudi Arabia resents US pressure interfering with its oil policy. Saudi Arabia “looks east”: In 2023, under China’s mediation, Saudi Arabia restored diplomatic ties with Iran, promoting Middle Eastern autonomy; it increased energy and infrastructure investments in China, reducing its security dependence on the US. The US is wary of its “de-Westernization.” Human rights and nuclear disputes: The US continues to pressure Saudi Arabia on the Khashoggi case and human rights issues in the Yemen war; Saudi Arabia openly seeks civilian nuclear capabilities, while the US fears militarization, making reconciliation difficult. Sensitive Israel relations: Saudi Arabia is highly cautious about the US-Israel “special relationship” and does not want to share a stage with Israel under NATO’s framework, avoiding being tied to the US Middle East agenda. 3. Saudi Arabia actively “keeps distance”: unwilling to be a Western vassal Regional leadership mindset: Saudi Arabia sees itself as the leader of the Arab/Islamic world; NATO is a Western military alliance, and Saudi Arabia does not want to lower its status to “observer” but prefers dialogue on equal footing rather than as a “partner.” Security autonomy prioritized: In recent years, Saudi Arabia has promoted diversified security arrangements—strengthening energy and security cooperation with China and Russia, signing a mutual defense agreement with Pakistan, and not putting all its eggs in the US basket. Avoiding angering Iran: Saudi Arabia just restored ties with Iran; NATO is a core anti-Iran bloc, and attending the summit could be seen by Iran as “taking sides,” undermining détente. 4. GCC internal power struggles: the four countries “band together,” marginalizing Saudi Arabia Among the six GCC countries, Bahrain, Kuwait, Qatar, and the UAE have moved closer to the West in recent years, forming a pro-Western bloc; Saudi Arabia and Oman remain more conservative and autonomous. From 2017 to 2021, Saudi Arabia allied with the UAE and Bahrain to sanction Qatar; although the rift has been repaired, mutual distrust remains. The four countries use the NATO summit to strengthen their ties with the West and increase regional influence, indirectly weakening Saudi Arabia’s leadership. NATO also welcomes this: courting the four countries, dividing the GCC, balancing Saudi Arabia, and preventing a unified Gulf anti-Western bloc. 5. In summary Insufficient status, weak relations, Saudi Arabia’s reluctance, and the four countries stealing the spotlight—these four major factors combined lead to Saudi Arabia’s absence from this NATO summit.

Interpretation: “U.S. Securities and Exchange Commission (SEC) Enforcement Head: The SEC has ‘taken note’ of potential risks in private equity funds regarding liquidity, fees, valuation, and conflicts of interest.” Core meaning of this statement: The SEC has officially designated liquidity, fees, valuation, and conflicts of interest in private equity funds as current enforcement priorities. It is no longer just a “reminder” but a “preparation to take action.” This reflects the concentrated exposure of risks in the $2 trillion U.S. private equity market and a regulatory shift from “leniency” to “strict enforcement.” Below is an analysis from four perspectives: meaning, four major risks, regulatory signals, and market impact: 1. What exactly is this statement saying? Subject: SEC Enforcement Head (not an ordinary official, but the person directly responsible for filing cases, prosecuting, and imposing fines). Wording: “Taken note” = officially pinpointing risk areas + initiating intensive inspections + preparing to issue fines, not just simple attention. Background: In 2023, the SEC passed the “Private Fund Reform Rules,” which will be implemented in phases from 2024 to 2025; 2026 will be the full implementation and strict enforcement year [__LINK_ICON]. Essence: Shift from “information disclosure” to “behavioral regulation + accountability,” targeting long-standing gray areas. 2. Four major risks: each is an industry chronic problem 1. Liquidity risk (most fatal, already triggered defaults) Typical issues: maturity mismatches + concealing liquidity pressures + arbitrary redemption limits/lock-ups. Funds tell investors “quarterly redemption available,” but underlying assets are illiquid for 5-10 years (private credit, real estate, unlisted equity). During concentrated redemptions, direct restrictions on redemptions, delayed payments, NAV freezes (e.g., Blackstone’s 2022 real estate fund lock-up). SEC focus: whether liquidity risks are truthfully disclosed + whether all investors are treated fairly + whether preferential redemption rights exist [__LINK_ICON]. 2. Fee risk (most common, heavy area of investor exploitation) Typical issues: non-transparent fees + double charging + cost shifting + breach of agreements. Management fees, performance fees, transaction fees, monitoring fees, consulting fees stack up without clear disclosure. Fees paid by portfolio companies not deducted from management fees as agreed (disguised double charging). Operating costs and investigation fines shifted to fund investors [__LINK_ICON]. SEC focus: whether fees are properly disclosed + whether fees comply with agreements + whether undisclosed extra fees exist. 3. Valuation risk (most hidden, inflated NAV) Typical issues: arbitrary valuation of illiquid assets + artificially inflated NAV + lack of independent verification. For unlisted equity, private debt, real estate, etc., with no public market prices, internal models are used, easily manipulated. To collect more management fees, asset values are deliberately overestimated, even “zombie assets” are not impaired long-term. Valuation process lacks independent third-party audit, fully controlled by managers [__LINK_ICON]. SEC focus: whether valuation methods are reasonable + whether independent verification exists + whether intentional overvaluation occurs. 4. Conflict of interest risk (most core, insider abuse) Typical issues: manager’s interests prioritized + insider trading + favoritism toward certain investors + related-party transactions. When managing multiple funds, good assets are preferentially allocated to affiliated funds. Using fund assets for personal or related-party gain (e.g., low-interest loans, benefit transfers). Leaking non-public information to some investors, providing preferential redemption rights, harming others [__LINK_ICON]. SEC focus: whether conflicts are fully disclosed + whether unfair treatment exists + whether fiduciary duties are violated. 3. Regulatory signals: turning point from “leniency” to “strict enforcement” Enforcement upgrade: rules set in 2023, full enforcement year in 2026, batch investigations already underway [__LINK_ICON]. Key targets: private equity, private credit, real estate funds, hedge funds (larger scale means higher risk). Penalty severity: huge fines + disgorgement of ill-gotten gains + executive accountability + industry bans, no longer minor matters. Industry reshuffle: compliance costs soar for small and medium private funds, forcing exits; top private funds face high compliance pressure, profits squeezed [__LINK_ICON]. 4. Market impact: chain reactions for investors, institutions, and assets For investors: increased transparency + stronger rights protection + but short-term redemptions harder, fees clearer, NAV more volatile [__LINK_ICON]. For private fund firms: compliance costs surge + fee restrictions + stricter valuations + limited conflicts of interest, ending wild growth era. For asset prices: illiquid asset valuations return to rationality, inflated bubbles burst; high-quality transparent private funds favored. In summary: The SEC’s focus on the four major private fund risks signals the arrival of a strong regulatory era for the industry, with short-term pain and long-term normalization. Investors should beware of products with poor liquidity, high fees, and opaque valuations.

#US April CPI recorded 3.8%, exceeding expectations Saudi crude oil production has fallen to its lowest level since 1990, mainly due to the Iran war's impact on energy transportation in the Persian Gulf and precise strikes by Iranian proxies on Saudi facilities, combined with a de facto blockade of the Strait of Hormuz, directly triggering a global supply crisis. 1. Core Data (April 2026, OPEC Monthly Report) Saudi production: 6.768 million barrels/day, a sharp month-on-month drop of 958,000 barrels/day, the lowest since 1990 (pre-war about 10.4 million barrels/day). OPEC total production: 18.983 million barrels/day, a month-on-month decrease of 1.727 million barrels/day, the lowest since 2000. Other heavily affected areas: Kuwait (-561,000 barrels/day), Iraq (-291,000 barrels/day), Iran (-211,000 barrels/day). 2. Three Direct Causes of the Plunge Strait of Hormuz “death blockade” Iran blocks the strait, causing a 94% drop in transit volume; Saudi eastern oil ports are nearly paralyzed, with 30% of crude unable to be shipped. Although there are east-west pipelines (Red Sea export), the capacity limit is only 5.9 million barrels/day, far from enough to absorb production capacity, leaving 1.1-1.6 million barrels/day idle. Precise bombings of Saudi facilities by Iranian proxies Houthi forces + Iranian drones launched consecutive attacks: Ras Tanura refinery, east-west pipelines, Manifa/Khurais oil fields were bombed. Direct loss of 600,000 barrels/day production capacity, pipeline transport reduced by 700,000 barrels/day, worsening the situation. OPEC+ production increase plan completely fails Originally planned to increase production by 206,000 barrels/day from April (Saudi +62,000 barrels/day), but the war caused a reverse plunge, completely reversing market expectations [__LINK_ICON]. 3. Chain Reactions on Oil Prices/Inflation Oil prices: severe supply-demand imbalance, $120/barrel is the floor, with a high probability of hitting $150/barrel. Global inflation: energy costs soar, US CPI breaks 6% again, Trump's price stability goal completely fails, election pressure skyrockets. Saudi finances: production plunges 30%, although oil prices rise, total revenue declines year-on-year, putting severe pressure on the economy. 4. Iran's Strategic Objectives (Precise Strikes on Key Targets) Strangle the US inflation lifeline, forcing Trump to lift sanctions and seek peace. Destroy Saudi oil export capacity, weaken its regional hegemony, and consolidate Iran's influence in the Middle East. Use very low-cost means (drones + missiles) to gain very high returns (global oil price surge, US internal turmoil). 5. Follow-up Forecast (May-June) Short term (1 month): production difficult to recover, oil prices maintain $120-$140, global inflation worsens further. Medium term (3 months): if the war continues, Saudi production may fall below 6 million barrels/day, oil prices may hit $150-$180, global economic recession risk soars. In summary: The sharp drop in Saudi production is a precise hit by Iran's "oil weapon," completely restructuring the global energy landscape, with high oil prices and high inflation becoming long-term.