July FOMC rate hike? Don't bet on it.
Inflation isn't dead, but a 25-50bp tweak won't kill it. Real tightening comes from balance sheet runoff and asset market correction — not a 10% V-shaped dip. Warsh and Bessent both know this.
The recent inflation data came in ice cold. That gives the Fed cover to pause. Oil rallying is already doing the tightening work for them — no policy response needed.
Sure, the committee has hawks, Trump critics, and people frustrated with sticky inflation. They'd hike if the data gave them any excuse. But this month? The data is the opposite of that excuse.
Ignore the hawkish pundits calling for a surprise 50bp move. They're selling headlines, not trading reality. Warsh isn't going to burn credibility with a rash maverick play that the committee won't even support. He'd be labeled "reckless" forever. Not his style.
FFQ26 and SFRM6 pricing 33% odds for a hike? Expensive lottery ticket. You might 2x or 5x as a YOLO, but it's a bad bet. I'm not touching it. If longer-dated STIR pukes though, I'll pick up some longs.
Pause is the path of least resistance here.
Inflation isn't dead, but a 25-50bp tweak won't kill it. Real tightening comes from balance sheet runoff and asset market correction — not a 10% V-shaped dip. Warsh and Bessent both know this.
The recent inflation data came in ice cold. That gives the Fed cover to pause. Oil rallying is already doing the tightening work for them — no policy response needed.
Sure, the committee has hawks, Trump critics, and people frustrated with sticky inflation. They'd hike if the data gave them any excuse. But this month? The data is the opposite of that excuse.
Ignore the hawkish pundits calling for a surprise 50bp move. They're selling headlines, not trading reality. Warsh isn't going to burn credibility with a rash maverick play that the committee won't even support. He'd be labeled "reckless" forever. Not his style.
FFQ26 and SFRM6 pricing 33% odds for a hike? Expensive lottery ticket. You might 2x or 5x as a YOLO, but it's a bad bet. I'm not touching it. If longer-dated STIR pukes though, I'll pick up some longs.
Pause is the path of least resistance here.