A Hawkish Fed Debut, a Fragile Iran Deal, and a Firmer Dollar

[00:00:00]Let's be clear, this was the most hawkish outcome from a meeting in terms of the movement in the 2-year yield probably on record, I would say. I mean, you know, certainly for the first meeting, first press conference, it was certainly there. We've had about 90 press conferences altogether. I would say this probably ranks within the top five, if not the top.

[00:00:24]RenMac offscript originated as a weekly internal research meeting designed to summarize and discuss what happened in Washington, the markets, and the economic data over the past week. It was always intended to be and remains a free- flowing conversation with no discernable objective other than to extract the wisdom and opinion of our analysts and their expertise. This is a conversation among colleagues.

[00:00:46]Individual circumstances are unique and nuanced. Do not mistake these conversations for investment advice because it's not. Here we go.

[00:00:57]>> All right. Welcome to RedMac Offscript where we openly discuss markets, economics, policy, history, and life. It is June 19th, Friday, 2026. I'm Steve Duttonoffer.

[00:01:08]>> I'm Jeff Degrav.

[00:01:09]>> I'm Neil Da. And I'm Steve Pav.

[00:01:13]>> Uh Jeff, very fancy. Where are you? I just arrived in London via Paris. Uh yeah, it's uh hot as all get out in Europe this week and uh I was in Versail right after President Trump and uh yeah, it was a cool 98° there. Uh so I don't know if you left the place burning, if that's why it was so hot or uh or what, but um no, it's a good trip. Good trip.

[00:01:40]>> Well well well stay safe over there. You know, a lot of lot of crazy soccer fans or football. Well, you know, so I did have the benefit of watching uh France uh from Paris, which was great, by the way. It was uh pretty, you know, obviously allin. I The amazing thing is how few people take American Express here. I'm like, wait a second. Uh anyway, so yeah, I had to make some plan B's with uh my American Express card. So anyway, just a little travel tip for those that are coming over. What's so funny is Jeff is over there in Europe and um there's all these viral sort of videos going on going around in the States about how much the Europeans are enjoying watching the World Cup in the States. You know, they they see things like pickup trucks, wide roads, open spaces, bies, you know, things that the European mind could never comprehend.

[00:02:34]Um it's it's it's been quite interesting to see. Um they should come to some of our homes too. I mean we can show them things like such innovations as washers and dryers and dishwashing machines.

[00:02:50]We don't have to hang our clothes with clothes in. I mean um >> I'm going to go on the record and just say I've enjoyed myself thoroughly. You know, I come to Europe at least once a year, but I enjoy myself thoroughly, unlike Neil, who usually comes to a foreign country and then wants to get out as soon as he possible.

[00:03:08]>> No, I mean, you enjoy it the way every American enjoys it, which is, you know, you get to see a bunch of history and, you know, you would never you wouldn't trade you wouldn't you wouldn't trade you wouldn't trade it for Darian, would you?

[00:03:24]>> Fair enough. Fair enough.

[00:03:27]uh on the show. Here we go. The travel uh section, yeah, travel section of the pod is now over. Uh Neil, we'll turn it to you. You were out last week stuck in an airport. I think that was probably just, you know, karma. Um but we talked about the steps that the Fed was going to go through, you know, starting with Wars first meeting. It seems like that started to play out. Maybe uh moved a couple steps quicker than we thought.

[00:03:49]But why don't you walk through what you heard this week, what it means, um and what where you think we're going?

[00:03:56]Well, I think what's interesting is we didn't actually hear a lot from the chairman. Um, you know, he did talk a lot, but he said a lot of nothing uh in my opinion. Um, you know, Worsh has always been uh an antagonist to forward guidance and I think that's fine. It's not like the markets need to know exactly what the Fed is going to do over the next two meetings. Um, but that there's a difference between foregoing forward guidance and then failing to provide a framework in terms of how the Fed thinks about its policy decisions. And I think that I would characterize Wars as falling in the latter uh camp. Um, you know, I I would just say that um, you know, like I said, I mean, it's about the reaction function. Um, and so it just what this does is I think um it kind of um increases the the the risk of market volatility. Um and that's okay. Um but it also I think the bigger story is that there's a chance that markets don't know what the Fed thinks until the Fed actually makes the policy decision itself. and that that kind of creates the risk of a uh a kind of abrupt kind of shift in pricing. So, um you know, I don't really view uh his communication strategy as a positive development thus far. Um you know, I've rarely thought of the Fed as a potential left tail risk on the economy, but you have to start thinking about that scenario. And you know, I would just say, you know, Worsh mentioned that he's not submitting a dot, not giving forecasts. It's part of the forward guidance that he hates. But guess what?

[00:05:43]Just because he doesn't like doing that doesn't mean that other people have stopped doing that. And the markets just latched on to the next thing. And um what we found is a committee that is uh skewing in a more hawkish direction. And that's why you saw the sharp rericing uh in in the uh in the rates market. I mean, let's be clear, this was the most hawkish outcome from a meeting in terms of the movement in the two-year yield probably on record, I would say. I mean, you know, certainly for the first meeting, first press conference, it was certainly there. We've had about 90 press conferences altogether. I would say this probably ranks within the top five, if not the top. Um so uh those are some of my thoughts. Um >> so the so the bond market reacted right as you said you had the short end yields move higher. Uh the long end either didn't move or came down a little bit I think. Uh but Jeff the equity markets seemed after one day to seem to blow through it and you see ma you saw a massive rotation.

[00:06:51]Yeah, I think that's, you know, that's that that's the right course of of action. If you think about what happened in the in the bond market specifically, it was real yields were flat um in place expectations were flat. So, you know, you'd think with a little bit more hawkish uh position from the Fed um that you would end up with a contraction in the 10-year yield and you would end up with a contraction in those uh inflation expectations. So, from that when we didn't really see that. So from from our perspective that really didn't mean much. I think the danger that we just all have to to keep in mind here and you're going to hear it. People are going to say something like, "Oh, AI is going to be immune to um you know to the Fed. AI is going to be immune to interest rates." I remember it was well it would have been what 26 years ago um a salesperson at Lehman walking into the office. Stop me if you've heard this before. Um and he said, "You know what?

[00:07:45]It's not going to matter that the the Fed's going to raise rates because uh these tech companies don't use any debt.

[00:07:51]So therefore, they're immune to any of the financing that that's out there. And you know, there there's always excuses as to why it's not going to matter this time uh with the Fed raising rates. And I would just say I think it's probably going to matter at some point in time.

[00:08:03]And you know, you know, from our market cycle clock, we're in the more vulnerable zone here. The Fed's actually doing exactly what you'd expect them to do when we're in this zone of our market cycle clock. So those things and and by the way, this is the zone where we get the worst return for equities. Now, we're not seeing it in the tape yet, right? And we're tape readers, so we'll stay with the tape until it tells us differently. But in terms of those conditions, I think that's a really important part of what's happening, which is the Fed usually is hiking rates. They're taking away the principle. We're in the zone of the market cycle clock. Um and that has um obviously more bearish consequences to it. So um you know, we're watching that.

[00:08:37]Um I don't see it yet. The breadth is actually pretty good. financials are actually responding. I think we're in good shape there. Uh moreover, the credit markets are still in a good spot.

[00:08:46]But, you know, if I was looking for kind of an insidious uh creep of what can happen to start taking the punch bowl away, this is this is a pretty good script to do that. So, we'll see how that plays out. But in terms of the overall health, I think we're in decent shape. The one thing I would just add, and again, I've been I've been on the road, so I haven't been, you know, my nose in the books and the charts like I usually am, but the sentiment data that we have has started to percolate a little bit more, right? So, we talked about put calls several several weeks ago. Um, we're now seeing it in some of the option market data that we have. Um, now granted, the sentiment data is never as good at a top as it is at bottom. So, I want to be really careful with that, but it is getting into that type of of environment where, you know, you look at, well, you've got people that are very optimistic, a lot of bulls, and you've got a Fed raising rates. You're like, okay, that's, you know, that's not a great combination when you look at that historically. So again, the tape is still good, the breadth is still good, financials are still in good shape, the credit markets are still in good shape as we're watching them. U but these are the insidious things that can start to creep in that we want to be really careful of as we go, particularly when we have some of these parabolic moves in equities.

[00:09:51]>> And then you'd layer on perhaps Jeff, seasonals are pretty good between now and call it the middle of July and then it starts they start to tell off. Yeah, the seasonals are good. Particularly I mean um I think it started like three years ago. The week between um the first week of July and and um uh the 4th of July uh has now turned into the best market I'm sorry the best week for the market uh in um whatever 100 100 years now I think it is 99 years that we have data for. So it's obviously seasonality there's a a bit of a of a bump there.

[00:10:26]Maybe 250 will make it even more of a bump this year than than not. But um we'll see. Uh but yeah, the seasonality, you don't want to fight the seasonality here. If anything, you want to start to fade seasonality as you get into August, >> right? The other uh big news obviously this week was what happened in Iran. Uh Steve, you want to walk us through the uh the deal?

[00:10:46]>> Well, maybe what didn't happen in Iran, depending on your perspective. Um, look, in terms of the uh I call it the deal, but I guess before the deal, um, it definitely has more carrots than sticks, and I think the Trump administration's putting a lot of hope in that. Some people may argue that they put a lot of hype into sort of suggesting what it is.

[00:11:07]Um, but, you know, I think there were three things that were motivating Trump's. Call them the three M. You had the markets, the midterms, and the munitions. And so I think this is sort of a way to look for uh desire to sort of reopen the strait. And um I think that's obviously in Trump's interest as we start heading into the midterms. And I think there's a lot of reasons for skepticism that I share personally that this is all going to be resolved. These being the more difficult matters with respect to Iran's nuclear uh ambitions as well as sanctions relief in the next 60 days. So what happens middle of August? if history is any guide, we're probably going to see some continuation sort of this extension of these talks and then the real decision point is going to be what does Trump do after the midterms? Uh is he going to actually revisit, you know, Iran? I'm not sure.

[00:11:55]But again, I'm not as quick to take that off the table as maybe others are. Uh but, you know, in politics, you know, we say if you're explaining, you're losing.

[00:12:03]And right now, the administration has to do a lot of explaining here. Um so it's a long-winded way of trying to answer your question. I'd throw another M in there for money, right? Because there's a lot of money at stake in terms of rebuilding.

[00:12:18]>> Well, there is. And the another complication there with the money in the rebuilding is, you know, how are you going to actually get money in there if you don't remove the the sanctions? So, we've said before the issues were always known in terms of the straight, the nuclear capabilities as well as sort of the sanctions or the money. It's the sequencing that's the added complication here. So, you have the administration saying that, you know, again, going back to the original comment that, you know, these carrots will be available if there's progress there. Uh, and when you look at just how theou is worded, you know, I'm not a lawyer, uh, but my dad is, and, uh, having lost many arguments to him growing up, continue to lose arguments to him, I would point out there's a lot of ambiguity in the way that that language is written. And I think that's sort of why maybe I'm I'm doubtful that we're actually going to have this situation resolved in the next 60 days. But I hope I'm wrong.

[00:13:09]>> So what happens? We've got what oil now, you know, below 75. You've got a Fed that's tightening. Uh what what Neil and Jeff, what what goes on with the US dollar. How do you think about the rest of the world now?

[00:13:21]>> Well, the US is tiptoeing towards rate hikes and the rest of the world is tiptoeing away from them, right? Like so currency movements in the financial markets are basically some combination of four factors. growth at home, growth overseas, policy at home, policy overseas. And what we know is that you know the US economy generally has been outperforming uh the rest of the world.

[00:13:44]Uh particularly our major trading partners like Europe and Canada uh while uh you know the ECB hiked in June but doesn't look like we're thinking they're going to markets are kind of moving away from them doing it again. similar situation um out of the Bank of England. Similar situation I think out of Canada. You're seeing Australia as well kind of moving away from um from hiking. Um so, you know, policy differentials kind of tip the scales in the favor of a stronger dollar and that's what you're seeing. So, I suspect that continues. Um because, you know, the markets I don't think I mean if the Fed's going to hike the markets aren't priced for enough yet. um you know, if you look at the um number of moves priced between now and and March of next year, you're you're basically priced for two 25 basis point rate hikes. Um I mean that's possible, but you know, gener generally speaking, I think um you know, the hawks on the uh the FOMC um they probably want to take away all the insurance uh from uh from last year, right? So um that was 75 basis points worth of worth of hikes. Um you know the oil the oil market move is interesting.

[00:15:06]I mean that's taken a lot of pressure off of break even rates. So break even rates have um have come down quite a bit. But I do think it's important for people to remember that for the the FOMC particularly the Hawks it really isn't about oil. It's about um non-housing services uh things tied to uh you know maybe inflation expectations um and so uh or at least household measures of inflation expectations not market measures of inflation expectations. So that to me is their uh their sort of guiding light and those those measures of kind of non-housing services um remain sticky and have been uh you know rising somewhat in recent months. Um so the drop in oil I don't think necessarily will move them away uh from this tightening bias that they've adopted. Uh so um yeah I think I think all else equal um that's a good reason to want to be long the uh the dollar exchange rate against most G10 FX.

[00:16:14]>> Jeff, what's the uh what are the charts telling you on the dollar?

[00:16:18]>> Charts are pretty good for the dollar.

[00:16:20]um they have but now this has been part of a real rate story right so you gota you know we have to work that in there a little bit and so as I said before we haven't really moved real rates on a fivey year fiveyear forward basis so thinking out 2031 to 2036 um we didn't really see much change there so this is a near-term phenomena to Neil's point about um very short-term policy differentials and and obviously the inflation impact that oil has current oil will have I I'm going to be a buyer of overall conditions in energy they're not there yet but um I think as they develop. Um, I think there's some pretty good opportunities. These are good charts. They were good charts before we had this conflict with Iran. Um, I think they're set in a in a uh in a bullish trajectory from a trend perspective.

[00:17:01]They're some of the cheapest areas in the market right now. If you don't care about cheap, that's fine. Um, but, you know, kind of having the wind at your back and you have cheap securities that are in uptrends, um, that's usually a pretty good place to be. And if you can find those in oversold conditions, that's even a better place to be. So, I get the noise. I get the narrative around it. I think there's going to be some opportunities to develop an energy as it as it comes around.

[00:17:21]>> You might not know it, but Renmack has a free newsletter where we provide many of the charts we're discussing on today's pod. Go to the link in the show notes and subscribe. It's quick, free, and insightful. Now, back to the show.

[00:17:33]>> And you know, one of the things we said uh in your absence last week was even as oil comes down and you get, you know, gas prices, which I think are now below $4 um in the US, the average uh gallon.

[00:17:43]Uh Jeff, we'll convert that to liters for you over there. Um but does that is that you know move in that is that move gonna uh impact the consumer consumer's willingness to spend or they just going to stick it in savings?

[00:17:58]>> Um you know it's interesting. I mean the consumer is resilient. There's no doubt about that. Um, I've been surprised by how strong the consu I mean, it's one thing to say that consumers will kind of keep spending through an energy shock, but what we're seeing in the last few months is totally different. They've actually like accelerated consumption, which I think is surprising like that it's not it doesn't necessarily go with first principles. I mean, the data are what the data are. Um, you know, I I do wonder perhaps at some level that maybe um, you know, like what we've seen with manufacturing is that our are people kind of frontr running potential, you know, shortages in their head and, you know, kind of dashing for things and trying to get stuff. Um, but yeah, I mean, I I I generally think that a good first like sort of baseline principle is that people kind of look at this as and they smooth out their consumption, right? So, if you're getting faced with a gasoline uh shock and you believe it to be temporary in nature, you'll probably dip into your savings to kind of keep your consumption going. And now that it's been proven accurate, like it's like, okay, I was right. This was a temporary shock. Um, I think what you'll likely see is this is going to support real incomes much more than it will support real consumer spending. So, I wouldn't expect I wouldn't sort of expect like a big gearing up in terms of real consumer spending going into the third quarter. I mean, you know, maybe maybe like bars and restaurants will look good because of like the World Cup and all this and and things like that, but generally speaking, I don't um you know, I think you'll see real incomes recover somewhat as the um inflation rate comes down. Um but I think a lot of that is just going to go into um into savings. So you don't have you don't have the Fed tightening or do you in September just to be clear?

[00:19:55]>> No, I think I mean at this point I think it's hard to fight against the the Fed tightening in September. I think it would probably be a a boo boo if they do it. Um but yeah, I mean I think you have like again I mean you have what we have to go on is sort of the guidance from the dots and what they've said, right? Um and nine of them are uh on board with hikes and six of those see at least two. So um you know it is what I mean and and the thing is like yes inflation is going to come down because of oil but as I said for the hawks on the committee it's never I don't think it's really about that. It's about non-housing services and non-housing services are important, I think, in their framework because it's very much tied to what's going on with labor costs and inflation expectations.

[00:20:53]So, um that to me is is um you know, it makes it difficult to not kind of uh anticipate um a rate hug at this point. I mean, they they kind of gave their hand. Um, and look, I mean, there were some things that War said that I thought were dovish. Like for example, he made the point of like the housing like rates are restrictive for the housing market even if they're not restrictive for the financial markets.

[00:21:19]He made the he made the point of like supply driven um, you know, expansion from AI and so forth. But if you look at the statement right like his I mean I think historically the statement is really the primary conduit for which from which the the Fed communicates with people. It was a very short abbreviated statement. I mean it's it's been it's which is new and that's fine. Um but the last line of it the committee will deliver price stability. And then I I believe later in the day he said uh during his press conference like we've missed for five years. if we're going to fix that mistake. Um, I mean, that to me is a hawkish kind of uh framing, right? I mean, there's not really much discussion around the employment side of the Fed's mandate, probably because they don't care right now because that, you know, the unemployment rate is stable. Uh, but the committee will deliver price stability.

[00:22:19]Now, he didn't really tell us what that meant, but um but I, as I say, I mean, the fact that he's not willing to say that much means that other people fill the vacuum, and those other people tend to be hawks, and um they're ascended right now. So, um yeah, I mean, if I had to if I had to guess, I would say that you could see it as soon as July. I mean depending on what the next I mean I you know what what I said to clients immediately following this meeting was you should be pricing 50% odds for every single meeting between now and the end of the year like as a baseline everything is a coin flip and if they go in and if they go in July they're probably going in September. If they go in September they're probably going in October. So um that that that's sort of where I'm at at this point.

[00:23:10]>> Uh one last question. Could you tell where a pal was on the um the dotbot?

[00:23:17]>> I mean, I would assume that he's probably among the those that don't expect a rate cut, a rate hike this year. I mean, and if I had to guess, I would say that Mickey Bowman is the one that expects a cut. Um, but >> yeah, I just the the irony of that is is >> well, I mean, remember when we when this was all going on, I very loudly said that the biggest risk was that President Trump might get duped.

[00:23:46]Now, you just heard Steve talk about Iran. I think it's I think the funnier thing is President Trump um has u let's be generous and say negotiated a settlement with the Iranians in a um uh I think his hawkish critics will call it something else but um he negotiated a >> call it what it is call it what it is.

[00:24:10]You would say that the hawks say he surrendered.

[00:24:13]Well, I mean, um I would just say that the first tweets off of truth were we want unconditional surrender, whatever.

[00:24:22]You you can't say that this is that um objectively. Um at any rate, there's a settlement with the Iranians.

[00:24:32]I think some of that has to do with a I mean, president the president admitted this himself. I mean, he essentially, you know, didn't want the global economy to be held hostage, right? So he he he made that point himself. Okay, that was he said that this week. Uh so the president made the settlement to get oil prices down before the midterms and at the same time this week we had the most hawkish meeting ever in terms of the response out of the two-year yield.

[00:25:07]>> Right. Right.

[00:25:07]>> Oops. I want to move I want to move real quickly though to um to defense stocks and in particular the the defense production act. Uh was that a big deal Steve?

[00:25:18]>> So if you're referring I believe you're referring to the Wall Street Journal report that the president has now instructed Secretary of War Pete EX to invoke it and sort of force industry to try to uh bolster these missions that have been depleted from the the war in Iran. That's a traditional move, but I think maybe what's been a little less traditional is we've seen sort of it apply now to a lot of non-defense players. I think the report was that General Motors would be helping Loheed Martin and some of its efforts to work towards this replenishment here. So, you know, you think about the defense production act. It going back to Obama.

[00:25:54]Um, you know, all these presidents have invoked it. I think under bomb was more traditional uh in terms of mostly military matters and that's still the case with Trump. Interestingly, they've all used it for critical minerals. That tells you one, they've been aware of this issue with China for a while. You can question how successful we've been in that. But two, it's going to be a continued priority regardless of which part is controlling the White House.

[00:26:15]What you did see in Trump one was expansion of its use to try to address the COVID pandemic. And the B administration sort of took that expanded it further after they lost the midterms. uh when Republicans gained the control of the House or blocked their pathway there to sort of look at uh using it for green energy production, which is a political priority for them.

[00:26:35]And they would say a strategic priority.

[00:26:37]Clearly, the Trump administration doesn't see it that way. But where I'm going is if Republicans lose control of at least one house of uh chamber of Congress, does Trump ad Trump Trump administration sort of borrow the Biden model with the legislative pathway sort of blocked uh to maybe go beyond uh these traditional measures. I think big picture, you know, we've seen the defense bill advance right now in the House and the Senate in terms of making it out of committee and it's at a higher level. And for some reason, if you have Democrats controlling at least one chamber next year, if they try to push back on defense spending, again, I think this defense production act uh is another avenue for it. So, that's good for defense companies uh that should benefit, but if you're looking to invest in them, that might not be as attractive because the administration's been pretty clear that they want those profits redirected towards production and not towards being returned to shareholders.

[00:27:29]Uh so, I think that's where if you're looking to make an investment, you still might want to exercise some caution. All right, let's move to the uh mailbag.

[00:27:38]Harry Chen, good morning.

[00:27:40]>> Hello. Good morning. Today we have the question come from Sam McKay.

[00:27:45]His question is longtime listener here writing from Australia.

[00:27:51]If the fat stays higher for longer under Kevin Walsh, do you think that finally shifted the age to ex US market after a decade of US dominions or do US equities still come out on top structurally?

[00:28:10]That's it. Thank you.

[00:28:12]>> I don't know. But um I I look forward to the uh American men's uh national team kicking their ass.

[00:28:21]later this afternoon.

[00:28:24]>> Australia, >> I mean, I think Australia does have going for it is that um you know, if you know the u you don't have to chew the the steak as much as you do in Europe, right? I mean, have you seen these viral videos of the Europeans eating like brisket and and filetmen and like steak and meat in the US? Like, oh my god, it's it it it comes right off the bone. I've never had ribs like this before.

[00:28:53]I think the Australian >> We are good at ribs.

[00:28:55]>> We are good at ribs.

[00:28:57]>> I I'll take that question very quickly.

[00:28:59]I I would say I would not if if policy differential the things that Neil talked about, right, which are growth differentials and and interest rate differentials. If those were the primary driver of equities long term, then yeah, you have to worry about that. That's going to be a short-term influence on equities. the the real you know the real driver for equities is is just kind of what happens here in the US right with the entrepreneurialism the regula regulatory uh backdrop etc um so I don't think I don't think that that's going to change and I know that probably sounds very ethnosentric um but it is true I mean we you know the in terms of what happens in in the US and and the structural uh influences there I don't think that that's going to change it might get uh distorted a bit by interest rate differentials in the near term, but I don't think it's going to be enough to to really derail that um uh that machine as we look at it. So, uh now that said, I think there's plenty of opportunities uh globally. We've got, you know, very good um uh very good trends and momentum in Japan. We've got uh the European complex coming back around and acting better. Uh but in terms of leadership and I think you know in this this kind of new um new industrial revolution if you will it's still going to be very very hard uh to beat the US in terms of the the structural uh uh structural difference between the US and the rest of the world.

[00:30:26]>> Uh thanks Sam for that question. Great one. We'll get a hat all the way over to you uh in Australia. I'll reach out to you after the pod to make sure we get the uh the right place to send it. Um Steve, what are we watching this week?

[00:30:38]Uh, three things. Personally, going back to consumption, I'm going to be watching Amazon Prime Day. I believe it's a 4-day event next week. So, looking for some specials there. Yeah, it's earlier this year. So, you're welcome in terms of the public service announcement. Um, in terms of domestically, Congress will be >> of course though it's a it's after Father's Day. Is that >> it doesn't it's not going to benefit me Sunday. Um, but that's okay. I on Congress uh the House is coming back. Uh they'll be in before they adjourn for 4th of July. Looks like both the House and Senate are going to finally pass this housing affordability package. Uh that's good for manufactured housing.

[00:31:11]Again, that seven-year restriction on single family rentals is out. Uh so just sort of getting that clarity uh is probably good. I think attention at some point after that is going to shift to this crypto bill which remains stalled.

[00:31:22]Again, they probably need to pass that in July before they leave for August. Uh and then abroad, I'm going to be watching India. We have United States trade representative Jameson Greer going over there, I think, to try to finally finalize this deal in terms of a trade agreement after President Trump from Prime from Mr. Modi uh talked at the G7.

[00:31:40]Uh so we'll see whether or not they can finally come together. You know, it's been a lot of mention before that the two sides were close and that they failed to close it out. Uh but you know, I think um if they don't get it done uh this week, it's hard to see it getting done anytime soon.

[00:31:55]>> Neil, what are you watching?

[00:31:58]Well, we're g I mean, we have the core inflation core PC inflation data um coming out for May. The market's looking for 0.3% month overmonth. There might be some upside risk to that. Um but, you know, the uh the inflation data over the first five months of this year have been uh not good. Um so, we'll get some um potentially problematic news for the fixed income markets. Uh we'll also get data on new home sales. We had a big decline in new home sales uh in April.

[00:32:30]So I wouldn't be surprised to see some rebound uh from uh from those weak levels. But generally speaking, most of the action in the housing market is um in the resale market uh where you're seeing um you know some percolating of activity at least relative to last year uh not necessarily in the new housing market. And then lastly, um we'll be getting uh some data on core capital goods orders. I mean that is really the strongest part of the US economy at the moment. Um you know the uh the business equipment investment piece um a lot of that's related to AI uh data center uh buildout, but that's that's been very strong. So we'll get an update for that uh in for May. And then um we're just coming out of the blackout period. Um but I will be very curious to see what um Governor Christopher Waller says on Monday. Uh he's giving uh opening remarks um at the fifth conference on the international roles of the US dollar. Uh we'll see what he says. Um could be welltimed remarks. But as I', you know, as I've been arguing, like if if Worsh isn't speaking as much, right? And he doesn't believe in this forward guidance, doesn't believe in giving dots, doesn't believe in giving a reaction function really, um, others are going to fill the void. And Waller's been tiptoeing towards hawkishness.

[00:34:02]Remember that he's been kind of more on the doubbish side of the FOMC committee.

[00:34:08]And, you know, he's moving more towards the hawkish view. So if he kind of gives shows any cards on that, I mean that could, you know, shift the market pricing uh one way or the other. Um we'll also be getting um New York Fed President John Williams um as well. Uh he's uh he's talking um later in the week. So we have some Fed speakers that might be worth paying attention to.

[00:34:38]>> Fed watching now in vogue or back in vogue, I should say. Jeff, what are you watching?

[00:34:45]>> Next week we've got Micron reporting. So Micron's an interesting case study because you know of all the kind of ups and downs that you've seen in semiconductors over the last 30 or 40 years, Micron um has always been in some way, shape or form a part of that. So um big boom bust cycles with Micron obviously in a boom cycle right now.

[00:35:02]They're reporting um the reason that'll be important is because of where sentiment is, right? So the expectations are extraordinarily high. Um, can the stock react to those expectations? I mean, really look no further than Nvidia, right? Nvidia's been I mean, I hate to call it dead money, but Nvidia's basically been dead money now for what, 18 months. Um, and so, you know, do we end up with Micron having to to end up with, you know, these large consolidation just as a catch-up play where you kind of move yourself back into the valuation um that uh that's developed, the valuation differential or that gap is developed here in the very near term. So I think um seeing what the number is uh that second derivative what that looks like and then how does it respond to very very high unlock expectations I think will be really important for that sentiment game. Um semis have historically um peaked sometime in July. So uh that's not our call. I'm just putting that out there because I think it's important just to recognize that there is a seasonal tendency to semiconductors and um that tendency tends to peak sometime in July.

[00:36:06]So, putting all that together is just something that, you know, we're gonna be watching.

[00:36:10]>> You gonna watch the uh US Open on Father's Day from London?

[00:36:15]>> No.

[00:36:17]>> Wow.

[00:36:17]>> No chance.

[00:36:18]>> Definitive though. Good.

[00:36:21]>> No chance.

[00:36:22]>> Good God. Well, we'll we'll end it there. Uh we'll be back next week with lots more to talk about. Until then, I'm Steve Dutton.

[00:36:30]>> I'm Jeff Gro.

[00:36:31]>> I'm Neil Da.

[00:36:33]>> And I'm Steve Pavlet. Happy Father's Day everybody.

[00:36:36]>> Yeah, you too. Thanks.

[00:36:37]>> Hey, it's Steve. Thanks for listening to the show. Small slice of what we do here at Renmack. So, if you liked it and aren't already a client, go to renmack.com and request a free trial.

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