 Economist's Morning: What's Happening in the World on May 4, 2026 Morning yen crash to 157/USD, Russian PMI below 50 for the 11th consecutive month, gold at $4,600, and Brent at a four-year high of $126 per barrel. All this against the backdrop of Big Tech preparing to spend $725 billion on AI this year. The connection between these events is direct: the blockade of the Strait of Hormuz has sent oil soaring, putting pressure on inflation worldwide. Japan is in the risk zone—the BoJ could intervene at any moment to curb the yen's fall. Russia continues to shrink industrially—11 consecutive months of recession. In Korea, on the other hand, PMI rose to 53.6, the strongest in 4 years. The paradox is that precisely in conditions of high inflation and uncertainty, businesses invest most actively in automation. $725 billion on AI infrastructure from the four largest tech companies is a signal: the bet on AI agents is not slowing down but accelerating. The more expensive human labor becomes and the higher geopolitical risks are, the faster companies will transition to AI solutions. The main question now: can the Fed and ECB keep rates steady if oil stays above $120 and inflation does not return to the target 2%?