Job openings held firm, the Fed stayed insulated, and money tightened at quarter-end

Job openings came in at 7.6 million in May, well above consensus and holding near the levels that kept the Fed cautious through the first half of the year. The labor market continues to defy predictions of sharp cooling, and the resilience is showing up in economist forecasts: most now expect the Fed to keep rates steady through 2026, per GlobeSt. The tape that was supposed to soften kept its footing.

While labor held, money markets tightened. Morgan Stanley analysts warned that the risk of a quarter-end deleveraging event is rising, citing funding pressures that tend to surface when balance sheets reset. The FT reported the note as part of broader concern about liquidity conditions that don't show up in headline volatility but appear in repo spreads and margin calls. Same calm surface, different undertow.

The Supreme Court ruled Monday that Lisa Cook can remain as a Federal Reserve governor, but the decision was narrower than it looked. Four of six conservative justices dissented, and the Court punted on key questions about presidential power to fire Fed governors. Axios noted that another ruling the same day grants the president broad latitude to remove officials in similar roles, leaving the Fed independence framework unresolved and vulnerable to future challenge. The win was tactical, not structural.

Elsewhere, Colorado PERA is weighing a pullback from private equity after years of underperformance, according to Private Equity International and Buyouts. The $68 billion pension has watched PE lag public markets through the post-2021 repricing, and the allocation review signals a broader reassessment among institutional LPs who locked capital into vintage years that now look expensive. The asset class that was supposed to smooth volatility became the one that couldn't be marked or exited.

Bond sentiment turned bearish, WealthManagement reported, as advisors navigated a regime where yields stayed elevated but duration risk remained live. The Japanese yen hit a 39-year low against the dollar, per AP, extending the divergence between Fed policy and Bank of Japan accommodation that has defined currency flows since 2022. Same policy, widening spread.