Wednesday ✅.

Today's newsletter is 692 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 0.1%.

  • Biggest gainer? Nike (+5.7%). ¯\_(ツ)_/¯
  • Biggest decliner? Humana (-11.2%), led health insurance stocks down after UnitedHealth Group warned of higher medical costs from older Americans catching up on delayed surgeries.

1 big thing: The Fed’s hawkish pause

Illustration: Aïda Amer/Axios

The Federal Reserve kept interest rates steady — for now.

The big picture: Today's skipped rate hike is the first since the Fed began its historic campaign to cool inflation 15 months ago, but officials anticipate they still have more to do to slow the economy as prices continue to rise quickly, Axios Macro's Courtenay Brown writes.

  • In opening comments at his news conference, chair Jerome Powell said that "nearly all" policymakers "expect that it will be appropriate to raise interest rates somewhat further by the end of the year."

By the numbers: New forecasts released alongside the decision show most Fed officials expect rates to be higher by year-end (5.6%), suggesting two more hikes are on the horizon by December.

Meanwhile, officials lowered projections for inflation only slightly.

  • They anticipate it falling to 3.2% at the end of 2023, compared to the 3.3% they previously projected, as measured by the Personal Consumption Expenditures index, the Fed’s preferred gauge.
  • Projections of core inflation, which excludes energy and food prices, were upgraded. Officials now anticipate it will be 3.9% by the end of 2023, 0.3 percentage points above the March estimate.

By the end of next year, they say inflation will be 2.5% — still above the 2% level that officials target.

Go deeper.

2. Charted: IEA forecasts slowing oil demand

Projected year-over-year global oil demand growth, select sectors
Data: IEA; Chart: Thomas Oide/Axios

The International Energy Agency sees global oil demand growth slowing "markedly" in the coming years, with a peak "on the horizon," Axios Generate co-author Ben Geman writes.

Driving the news: The IEA's new five-year outlook sees worldwide use rising 6% to 105.7 million barrels per day in 2028. But the pace of growth is expected to slow greatly.

Zoom in: Petrochemicals used in plastics and other products are a major source of demand growth in the forecast. Aviation fuel is, too.

  • But demand for road transport fuels goes into reverse starting around mid-decade.

What they're saying: A rapid shift to a "clean energy economy" is driving the latest outlook, IEA head Fatih Birol said in a statement.

Go deeper.

3. What's happening

Two Senate Democrats want the DOJ to investigate the proposed deal between the PGA Tour and Saudi-funded LIV Golf. (CNBC)

🖥️ The European Commission may force Google to sell part of its ad business due to alleged anti-competitive conduct. (Reuters)

4. Slight thaw in UPS labor talks

Photo: Justin Sullivan/Getty Images

UPS drivers scored a cool win this week: Most UPS delivery vehicles will likely soon be equipped with air conditioning, Axios Markets co-author Emily Peck writes.

Driving the news: The company and the Teamsters union that represents about 340,000 workers reached a tentative agreement Tuesday to add A/C to vehicles starting next year.

  • The issue drew heightened attention last summer, as UPS drivers shared photos of thermometer readings inside their trucks going as high as 120 degrees or more, and they went viral.

The big picture: Negotiations between the Teamsters and UPS began in April — the labor contract at stake is the largest private-sector union deal in North America.

  • Their contract expires on July 31, and Teamsters general president Sean M. O’Brien has said they're prepared to strike if there's no deal by then.

5. Swedish Beyflation

Beyoncé performs on May 10 in Stockholm, Sweden. Photo: Kevin Mazur/Getty Images for Parkwood

The Fed is promising to watch the effects of tightening credit conditions and readings on the labor market as it assesses inflation pressures ahead of its next rate decision.

  • One thing it may be underestimating — Beyonce.

Driving the news: Sweden released its own inflation figures today for May, where it noted price increases for "hotel and restaurant visits, recreational services, and clothing."

The intrigue: The chief economist for Sweden from Danske Bank, Michael Grahn, attributed part of the uptick to Beyonce's May 10 Renaissance World Tour kickoff in Stockholm.

  • "[The show] seems to have coloured May inflation, how much is uncertain, but probably 0.2 p.p. of the 0.3 p.p that hotels/restaurants added. Perhaps also hiked concert ticket prices (recreation)," Grahn said.

What we're watching: Beyonce will bring her tour to the U.S. next month, starting in Philadelphia on July 12 and wrapping in New Orleans at the end of September.

6. What they're saying 🍺

“Our year is screwed.”
— An Anheuser-Busch distributor, to WSJ, on the continued decline of Bud Light sales. The brand just lost its 22-year title as the best-selling beer in the U.S. to Modelo Especial.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

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