rent assunder, indefinitely
market vibes
April 30…)
in the news
Powell is staying “for a period of time to be determined,” something a Fed Chair has not done since 1948. The FOMC has been rent asunder and the level of the split especially with dissents on both sides of policy hasn’t been seen since 1992 (Barrons).
Three governors dissented text in the statement that was actually not written in the statement:
“In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas): [“additional adjustments”] is what analysts and the dissenting members interpreted as maintaining an “easing bias” …Stephen Miran dissented in favor of an immediate 25-basis-point rate cut. This was his sixth straight dissent.
In war news, oil markets discounted the “extended US naval blockade” with a rally of 7% in WTI. Secretary Hegseth testified for 6 hours before the Senate Armed Services Committee in a grueling disputatious marathon. At one point calling congressional Democrats (and some Republicans) the “biggest adversary” due to their “reckless, feckless, and defeatist” criticisms of the US Military. This was just short of saying “comfort and aid to the enemy,” imo…He said, “You stain them.”
Hegseth is testifying again today at 11:00 with General Caine, Chairman of the Joint Chiefs… It’s going to be every bit as violent as a UFC cage fight. The real war is in Washington, in my opinion.
On a lighter note, many recipients of food stamps in Minnesota own Bentleys and Ferraris according to Fox News. And after 30 games in a 162 game season… The NY Yankees are in 1st place leading the Rays by 1.5 … everyone else is miles behind.
in the markets
Oil prices are notably not higher today despite shrill narratives. The correlated uptrend in open interest indicates about 40,000 new longs entered on the plunge when May WTI went off the board on April 21 and 20k came in since Friday.
Traders are getting chopped to bits (chart below). WTI had one move higher on one day (March 9) in few hours that blew out embedded bad gamma. Since then there has been zero range extension higher in flat prices and especially spreads.
This is a chart of the front spread in continuous data with roll expiries noted that speaks for itself. Next chart please…
