The Fed is ‘meaningfully deviating’ from one of the most basic rules for fighting inflation, BofA warns

Good morning. On Fortune’s radar today:

Fed is breaking Econ 101’s golden rule, BofA warns.

Markets: “Blown past expectations.”

U.K.’s Starmer clings on as his MPs revolt.

Iran vows to make U.S. taxpayers feel the pain.

Tech bloodbath: 118,000 jobs gone in 2026.

Forget your office ping-pong — meet the Wimbledon of work.

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Q1 earnings have “blown past expectations”

S&P 500 futures were down 0.36% this morning. The index rose 0.19% yesterday to a new record high of 7,412.84. 

In Europe, the Stoxx 600 was down 0.77% in early trading and the U.K.’s FTSE 100 was down 0.54% before lunch.

Asia: South Korea’s KOSPI lost 2.29%. Japan’s Nikkei 225 was up 0.52%. India’s Nifty 50 declined 1.92%. China’s CSI 300 was flat. 

Brent crude was $107 a barrel this morning, up from a low of $102 yesterday.

Why does the S&P 500 keep hitting new highs even though the world is at war and oil is above $100 per barrel? To misquote former U.K. Prime Minister Harold Macmillan, “Results, dear boy, results.” The index has delivered a blockbuster set of Q1 earnings. With 86% of companies reporting, “64% of companies beat both EPS and sales expectations, nearly 20 percentage points ahead of the historical average of 42% since 2001,” according to Savita Subramanian of Bank of America. The “1Q26 earnings season has blown past expectations,” she said in a note.

It was the sixth straight quarter in which the index has delivered EPS gains of 5% or more, according to Ohsung Kwon and his colleagues at Wells Fargo.

U.K.’s Starmer clings on despite rebellion aimed at forcing him out

In a fast-moving situation that is changing by the minute, U.K. Prime Minister Keir Starmer this morning said he would face down a rebellion from his own members of parliament and stay on in No.10 Downing Street. More than 70 of his Labour party MPs have demanded he leave office, after their party lost nearly 1,500 seats in local elections last week. However, the party’s rules require 20% of the parliamentary party—81 MPs—to demand his resignation before a leadership election can be forced.

“The Labour Party has a process for challenging a leader and that has not been triggered,” Starmer said this morning. “The country expects us to get on with governing. That is what I am doing and what we must do as a cabinet.”

The number of MPs moving against Starmer has been changing by the minute and it is possible that Starmer may be forced........

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