Greetings,

The tense geopolitical environment of 2026 has corporate tax leaders calling on global authorities to focus less on a global minimum tax and more on improving dispute resolutions in the fractured international tax landscape. More on that below.

Also in this edition: 

• Bond traders test Fed pivot with inflation data
• Warsh's Fed guidance shift may lift borrowing costs
• Cutting benefits may not produce significant savings
• Private-credit fund redemption requests surge to $12B in Q2

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Tax professionals are urging the OECD to focus on resolving specific tax issues stemming from global discord rather than pursuing broad multilateral tax reforms. They highlight the urgent need for improved dispute resolution amid challenges such as US tariffs, the Iran war, and debates over the global minimum tax.

Bond traders are closely watching this week's personal spending data after Federal Reserve Chairman Kevin Warsh's recent comments on restoring price stability prompted a shift toward a more hawkish stance. Short-term Treasury yields surged last week as traders priced in a potential rate hike in 2026, following Warsh's first press conference.

Investors have warned that Federal Reserve Chair Kevin Warsh's move to strip back forward guidance could increase Treasury volatility and push US borrowing costs higher by forcing markets to price more uncertainty. Warsh declined to submit his own dot plot and signaled further changes to Fed communications, a shift that may raise risk premia while giving traders less advance warning on future rate moves.

The Conference Board's Leading Economic Index increased 0.5% in May, marking the second consecutive month of growth. The index is still down 1.9% year over year, but the increase suggests a positive outlook for the economy, according to the Conference Board.

The S&P 500 is approaching new records because of rising corporate earnings, solid economic data and falling oil prices, but investors are wary. Risks include stretched valuations, potential interest-rate increases by the Federal Reserve and the sustainability of artificial-intelligence-driven growth. Net equity issuance has also increased, raising concerns about market stability.

Companies such as Deloitte and Zoom are reducing employee benefits, especially parental leave, to counter rising healthcare costs. Rich Fuerstenberg of Mercer warns that such cuts may not yield substantial savings and could harm employee morale. Fuerstenberg suggests companies evaluate the true value and savings of benefits cuts, considering state mandates and productivity costs, before taking action.