Ray

I'm a data engineer.
and I'm interested in stocks.

[The Kobeissi Letter @KobeissiLetter]

Key Events This Week:

1. US Markets React to Strait of Hormuz Strikes - Today

2. May JOLTs Job Openings data - Tuesday

3. June CB Consumer Confidence data - Tuesday

4. June ISM Manufacturing PMI data - Wednesday

5. June Jobs Report - Thursday

6. US Markets Closed, Happy 4th of July! - Friday

We have a short but busy week ahead.

[The Kobeissi Letter @KobeissiLetter]

Key Events This Week:

1. June S&P Global PMI data - Tuesday

2. May New Home Sales data - Wednesday

3. May PCE Inflation data - Thursday

4. US Q1 2026 GDP data - Thursday

5. June MI Consumer Sentiment data - Friday

6. June MI Inflation Expectations data - Friday

The spotlight remains on inflation.

[*Walter Bloomberg @DeItaone]

FED SIGNALS HIGHER RATE PATH, MARKETS PRICE HAWKISH SHIFT

Federal Reserve projections show the median funds rate rising to 3.8% in 2026 (from 3.4%), 3.6% in 2027, and 3.4% in 2028, with the long-run rate steady at 3.1%. Inflation is expected to stay elevated, with PCE not returning to 2% until 2028. Markets are pricing a hawkish shift, with traders assigning high odds of further hikes before 2028.
https://t.co/uymdr0GdV6

[*Walter Bloomberg @DeItaone]

FED LIFTS RATE PATH, INFLATION OUTLOOK RISES

Federal Reserve projections show the median fed funds rate rising to 3.8% in 2026 (from 3.4%), 3.6% in 2027, and 3.4% in 2028, with the long-run rate unchanged at 3.1%. Officials now expect higher inflation through 2026, with PCE not returning to the 2% target until 2028. Growth is slightly lower, unemployment broadly steady. Only 18 of 19 policymakers submitted projections.

[The Kobeissi Letter @KobeissiLetter]

SUMMARY OF FED DECISION (6/17/2026):

1. Fed leaves rates unchanged for the 4th straight meeting

2. 9 out of 18 officials expect at least one rate hike this year

3. Fed lowers its median 2026 US GDP projection from 2.4% to 2.2%

4. Fed now sees PCE inflation not returning to its 2% target until 2028

5. Fed says inflation "remains elevated" relative to their goal

6. Today's Fed decision was reached in a unanimous 12-0 vote

The Fed appears to be bracing for more inflation.

[Nick Timiraos @NickTimiraos]

With the May PPI and CPI in hand, forecasters expect core PCE to print around 0.35% in May.

This would raise the y/y rate to 3.4%. The six-month annualized rate would climb to 4.1%, the highest since June 2023.

Both measures were below 3% in the year-earlier period.

[The Kobeissi Letter @KobeissiLetter]

Key Events This Week:

1. May Industrial Production data - Monday

2. May Housing Starts data - Tuesday

3. May Retail Sales data - Wednesday

4. Fed Interest Rate Decision and Kevin Warsh's First Meeting as Fed Chair - Wednesday

5. June Philly Fed Manufacturing Index - Thursday

6. US Markets Closed for Juneteenth - Friday

All eyes are on the Fed this week.

[Nick Timiraos @NickTimiraos]

May CPI estimates: Another hot headline print due to the war, but a milder core

[The Kobeissi Letter @KobeissiLetter]

What just happened?

The S&P 500 just erased nearly -$2 TRILLION of market cap just hours after 3rd strongest US jobs report in 18 months.

Meanwhile, Bitcoin is officially down over -50% from its record high in October 2025.

What's happening? Let us explain.

(a thread)

[*Walter Bloomberg @DeItaone]

RATE HIKE BETS SURGE IN MARKETS

US interest rate futures now show more than a 50% chance of a Fed rate hike by January, according to Kalshi pricing.

Markets have shifted sharply from near-zero odds to actively pricing in tightening risk as early as 2026, with a 34% probability of a hike before 2027.
https://t.co/kZLYip874l

[*Walter Bloomberg @DeItaone]

IRAN SIGNALS NEW TALKS IN ISLAMABAD

Iran may send a delegation to Islamabad this week for a second round of talks, according to two Pakistani officials.

Speaking anonymously, they expressed cautious optimism that both Iranian and U.S. delegations could attend. Pakistan will not disclose travel details for security reasons and urged media to avoid speculation, noting the situation remains fluid.

[Nick Timiraos @NickTimiraos]

Preliminary forecasts, which could shift after the March PPI comes out, have the core PCE for March printing above 0.2% and rounding down or below 0.3% that rounds up.

[Nick Timiraos @NickTimiraos]

Core CPI was relatively tame across the board

Core goods was +0.11% m/m, +0.9% 3m annual rate, +1.2% y/y

Housing was +0.27% m/m, +2.9% 3m annual rate, +3.0% y/y

Core services ex-housing was +0.18% m/m, +4.6% 3m annual rate, +3.1% y/y

[*Walter Bloomberg @DeItaone]

*TRUMP: AGREED TO SUSPEND IRAN BOMBING FOR TWO WEEKS

[The Kobeissi Letter @KobeissiLetter]

Futures open in 8 hours.

Yet, it has been an eerily quiet weekend with no peace talk headlines and no denial of news that the US is planning a ground invasion of up to 2 months into Iran.

We ended last week with US oil prices at $101/barrel, the S&P 500 at a 232-day low, and the US 10Y Note Yield at 4.44%.

Yet, still no effort to contain the bond market as it nears crisis levels last seen during "Liberation Day" in April 2025.

Unless this changes over the new few hours, it appears that bond markets are setting for a move above 4.50% on the 10Y Note Yield.

History continues to suggest that some sort of *attempted* bond market intervention is coming.

Buckle up for a big week ahead.

[The Kobeissi Letter @KobeissiLetter]

Bond markets are telling the future:

1. Trump paused tariffs with the 10Y Yield at 4.60%

2. Trump bought $200 billion of mortgage bonds with the 10Y Yield at 4.30%

3. Trump delayed Iran strikes with the 10Y Yield at 4.45%

4. Trump further delayed Iran strikes with the 10Y at 4.45%

Trump knows the bond market is existential.

[*Walter Bloomberg @DeItaone]

ESCALATION LOOMS IN US–IRAN CONFLICT

🔸Trump threatens to intensify the conflict after Iran rejects peace talks
🔸Israel claims it killed Iran’s IRGC naval commander tied to Strait of Hormuz disruption (unconfirmed by Iran)
🔸US considering a “final blow,” potentially involving ground troops and large-scale bombing (Axios)
🔸Brent oil heading for its biggest monthly surge since 1990

[The Kobeissi Letter @KobeissiLetter]

BREAKING: The Trump Administration has begun "initial discussions" on what a potential peace deal with Iran might look like, per Axios.

US officials are planning the below terms:

1. No missile program for five years

2. Zero uranium enrichment

3. Decommissioning of the reactors at the Natanz, Isfahan, and Fordow nuclear facilities

4. Strict outside observation protocols around the creation and use of centrifuges and related machinery that could advance a nuclear weapons program

5. Arms control treaties with regional countries that include a missile cap no higher than 1,000

6. End of financing for Iranian proxy groups

US officials said the expectation is there will still be 2-3 additional weeks of fighting and Trump's envoys Jared Kushner and Steve Witkoff are involved in the discussions.

Step #9 of our "Conflict Playbook" is near.

[The Kobeissi Letter @KobeissiLetter]

SUMMARY OF FED DECISION (3/18/2026):

1. Fed halts rate cuts for the second straight meeting

2. Fed projects one rate cut in 2026, one in 2027

3. Fed 2026 PCE inflation forecast revised higher to 2.7%

4. Fed says implications of Middle East developments are "uncertain"

5. Fed Governor Miran dissents in favor of an interest rate cut

6. Today's rate decision was reached in an 11-1 vote

We believe December was Fed Chair Powell's final rate cut.

[*Walter Bloomberg @DeItaone]

*US JAN. PCE PRICE INDEX RISES 0.3% M/M; EST. +0.3%
*US JAN. CORE PCE PRICE INDEX RISES 0.4% M/M; EST. +0.4%

*US JAN. PERSONAL SPENDING RISES 0.4% M/M; EST. +0.3%
*US JAN. PERSONAL INCOME RISES 0.4% M/M; EST. +0.5%