Greetings,

A new projection from Morgan Stanley shows global merger and acquisition activity hitting a whopping $6.3 trillion this year — which would smash the 2021 record. More on that below.

Also in this edition:

• SK Hynix's AI-driven surge leads to $1T valuation
• PCE revisions could lower inflation readings
• Fed names leaders and objectives for new task forces
• Finance salaries in N. America rise amid talent shortage

Morgan Stanley projects global mergers and acquisitions to reach a record $6.4 trillion in 2026, surpassing the 2021 levels amid strong equity markets and renewed corporate confidence. The bank notes a significant increase in deal activity in the second quarter, particularly in software, utilities, energy and health care.

SK Hynix has reached a $1 trillion valuation, driven by demand for advanced memory chips amid the artificial intelligence boom. The company's market value has surged as its high-bandwidth memory chips have become crucial for AI data centers. The company has begun trading American depositary receipts on the Nasdaq to access more capital and global investors.

The Bureau of Economic Analysis' annual update to the personal consumption expenditures price index, due in September, could lower recent core inflation readings by 0.1 to 0.3 percentage point, economists estimate. The revisions, which reflect updated methodologies for several categories, may influence the Federal Reserve's assessment of inflation as policymakers weigh the outlook for interest rates.

Federal Reserve Chair Kevin Warsh named members of five task forces that will review the central bank's communications, balance sheet, data, productivity and jobs, and inflation framework. The panels include business leaders, economists and former central bankers, including Marc Andreessen, Doug McMillon, Greg Mankiw and Mervyn King, and are expected to recommend policy and operational changes later this year.

Businesses are increasingly willing to invest in supply chain resilience amid rising threats such as geopolitical tensions, climate change and cyber incidents, according to Proxima's Global Supply Chain Resilience Outlook. The survey of more than 500 CEOs found that 72% are willing to accept a greater than 10% increase in third-party supplier costs to ensure resilience, with many planning to fund this through cost-saving measures or by passing costs on to customers.

Commodity Futures Trading Commission Chair Michael Selig warned that regulators could end up writing digital asset rules if Congress does not pass the Clarity Act before the Senate's August recess. The bill would divide crypto oversight between the CFTC and the Securities and Exchange Commission, but negotiations remain slowed by disputes over decentralized finance, illicit finance and ethics provisions.

Direct lending by US private credit firms declined 55% in Q2, even as fundraising surged to $16.25 billion, the most in two years, according to Preqin. PitchBook LCD data shows that direct lending volume, including private equity-backed lending, fell to $33.59 billion. Key factors for the drop include softer M&A activity, borrower delays and increased selectivity from lenders due to higher interest rates and portfolio stress.

Lynlee Brown of Ernst & Young highlights the complexities of managing US tariff refunds following the Supreme Court's decision to strike down tariffs under the International Emergency Economic Powers Act. Brown says companies face challenges with refund timing, transfer pricing and potential impacts on the Pillar Two global minimum tax.

North American companies have increased salaries for finance professionals by an average of 6% in the past 12 months to address a talent shortage, according to the Controllers Council. Executives saw the highest increases at 6.7%. Despite the salary hikes, 61% of companies report significant talent shortages, especially for controllers.