This post’s title is a bit of a red herring. There is really no Fed decision to be made – at least as it regards a rate cut.  Inflation remains too high, particularly with the chaos and uncertainty of tariffs, a hot war in the Middle East (which the US might join) causing oil/gas prices to break out, and an administration looking for every opportunity to goose the economy.

continued for members…

I would love to do a big picture post, but the reality is that we’re almost exactly where we’ve been for the past month – at the tail end of a sharp rally that caught many off guard and is likely played out.

The RSIs of SPX, VIX and VX all suggest a pullback is imminent.

Though currency manipulation has contributed to equities’ continuing buoyancy.

Oil and gas continue to be the biggest wild cards. At these prices, they make it impossible for the FOMC to even consider cutting rates.

Despite the inflation risk, bonds are bid. IMHO, this means that the fear of a broadening war (or any of the other risks to equities) is greater than the fear of inflation.

It’ll be very interesting to hear Powell’s comments on all the above in his press conference this afternoon.