Economy Archives - Angry Meta Traders

India Insider: Real Story Behind the Rupee’s Weakness

July 29, 2026

by Ben Ezra with No Comment Behavioral Sentiment Ben Ezra Central Banks Economy Exclusive Content Featured Highlights Financial Institutions India Investing Speculators Uncategorized World

Change of Policy Could Create a Stronger INR

RBI Governor Sanjay Malhotra says, Rupee depreciation doesn’t reflect weaknesses in the underlying economy. He says that the external factors due to geopolitical tensions induced by oil prices rising has created a Dollar demand and created Rupee weakness.

While it’s true the Rupee has depreciated because of foreign capital fleeing and oil importers’ persistent demand for USD when buying oil and gas, this doesn’t answer the entire issue regarding INR vulnerability.

Questions surrounding the Rupee’s weakness should also focus on fundamental causes for depreciation. For instance, the Rupee has largely depreciated the past 5 years from 2021 – from 74.50 per Dollar – and into 2026, where its trading around 95.72 per the USD/INR now. Why?

USD/INR Five Year Chart as of 29 July 2026

Nominal depreciation has been 28%, and this is despite service exports growing healthier, and remittances flows that have been good in the last few years. Can the RBI governor say anything related to it?

Why Does the Rupee Remain Weak?

Economists point to the widening gap between India’s foreign inflows and outflows as a structural flaw that’s weighed on the Rupee and growth. A reason for this is India’s struggle to attract long-term capital through Foreign Direct Investment. Net FDI has declined from $28 billion in 2022-23 year to just $7.7 billion in the financial year that ended in March.

Foreign multinationals, venture capitalists and private equity titans have been taking advantage of high valuations to cash out. Despite recent pro-business reforms by Narendra Modi’s government, India’s shabby infrastructure and a bureaucracy that reduces Byzantium schemes to shame, puts off new arrivals. This is also a reason why tradable exports are not growing compared to India’s vast import needs. India’s exchange rate remains relatively overvalued, even though in purchasing power parity (PPP) terms, Indian products are inexpensive compared with those of the United States.

India could have allowed the Rupee to reflect it’s underlying market fundamentals in order to make it’s exports more competitive and restore external balance. Given the high supply of skilled India’s labor force and opportunities in small and medium scale businesses, especially in agricultural value added products where India holds competitive advantages, it’s not impossible to improve tradable export volumes. Instead, the Reserve Bank of India went in the opposite direction by managing the Rupee at 83/USD and made it overvalued, especially when Shaktikanda Das was the Governor of RBI.

If the RBI truly believes in India’s economic fundamentals story, then why did it intervene aggressively during the 2023-2024 period? Critics argued these known interventions may also have had the effect of supporting India’s GDP when measured in USD, although the RBI maintains that its objective was to reduce excessive volatility and preserve financial stability.

Even with respect to headline GDP growth numbers, many economists in India and around the world still believe that Indian statistical numbers overstate the actual strength of the underlying economy. To generate better growth data in India, the government has expanded it capital expenditures to compensate against relatively weak private investment. However, creating jobs and opportunities for linkages – opportunities in sector related industries, and enhancing India’s trade competitiveness via high value exports are important and urgent, rather than depending on foreign capital flows. In this regard, private capital expenditures still need to increase substantially.

Relying on short term capital flows for managing the current account deficit is a difficult strategy. Even if the RBI believes a de-escalation in the US and Iran War will occur, and believes that global liquidity conditions will allow the RBI to accumulate higher Forex reserves, risks remain skewed negatively to the upside without meaningful changes to improve long-term net Foreign Direct Investment.

David Lubin of Chatham House argues that countries should not rely only on high Forex reserves to protect themselves from volatile capital flows. The best strategy in his view is to reduce the potential problems at its source by discouraging unstable, short term inflows, and ensuring banks do not accumulate excessive foreign currency risks.

However, this is exactly what India is doing by mobilizing leveraged foreign currency deposits from non-resident Indian’s and offering hedging for these inflows until September 2026. Reserve Bank of India Governor Malhotra has stated that the RBI has attracted around $32 billion worth of USD inflows via this route.

Arguably, another side of the equation should be examined. If central banks were to accumulate FX reserves for the sake of paying for their imports, without meaningful reforms in their own economy and not creating conditions for capital to be deposited long-term, no capital controls can ably solve the underlying deficits or surplus nature for those respective economies.

In India capital account surplus has created deficits because the net Foreign Direct Investment has been weak resulting in funding costs for transactions in current accounts to increase. Apparently, this dilemma goes beyond the RBI balance sheet capabilities and exposes flaws in the fundamental reality of economic internal policies. The ensuing crisis hits the Rupee faster as capital leaves and damages the exchange rate.

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Thoughts on Kevin Warsh, the Fed and USD, Energy, Nasdaq 100, USD/JPY and Bitcoin

July 28, 2026

by Robert Petrucci with No Comment Behavioral Sentiment Central Banks Commodities Economy Equities Featured Highlights Federal Reserve, Interest Rates Forex Investing Risk Management Uncategorized

Fed’s Rate Announcement Tomorrow and Underlying Market Conditions as Folks Talk

Tomorrow’s FOMC rate decision from the Federal Reserve continues to cause some angst in the investment community as folks try to decipher Fed Chairman Kevin Warsh’s disdain for tea leaf reading. What is being missed by seemingly a lot of the crowd is the open signal from Warsh that he prefers to keep his outlooks rather muted, this because he appears to be focused on the mid and long-term economic picture.

Simply put, I do not think the Federal Reserve is going to raise interest rates tomorrow, nor will the Fed Chair give too much indication about his thoughts for mid-September. It might be stated in the Fed Press Conference afterwards that the costs of energy is being watched, but that is too obvious. Count on it being recorded that the Federal Reserve will watch data and react accordingly. In the meantime, financial institutions may demonstrate volatile overplayed USD centric positions which look overbought looking into the mid-term, as they still worry about the near-term.

10-Year U.S Treasury Yields Five Year Chart as of 28 July 2026

Political Questions and the Cost of Energy as the Fed Reacts

Let’s for a moment dive into politics. Does anyone think that Kevin Warsh doesn’t speak to Treasury Secretary Scott Bessent who has been a long-time associate? And does anyone think Bessent doesn’t have the constant voice of President Donald Trump in his ear?

The mid-term elections are nearing ladies and gentlemen. The de-escalation in the Iranian situation certainly has something to do with nations expressing wishes for less military action to the White House. Israel, the UAE, Kuwait, Bahrain, Iraq, Qatar, Saudi Arabia, Pakistan and Turkey are trying to influence positions as President Trump considers his next moves regarding alliances and resources. However, the situation may have something to do with the price of WTI Crude Oil too and its effect on U.S manufacturing and surprise, surprise the Federal Reserve.

Does anyone else remember that the last de-escalation also started just before the Federal Reserve’s last FOMC meeting in June? I am not being a conspiracy fanatic, just pointing out that lower WTI Crude Oil prices do help the case for a Fed outlook which looks at the costs of energy in a pro-active manner, one which might include the U.S economy and internal White House discussions with politicians who represent voters who have the power of creating a backlash. Lower interest rates equate into lower borrowing costs for consumers.

The Fed’s Impact on Equities and Forex (and the USD/JPY)

So if the Fed does not raise tomorrow, nor gives an indication of what it will do in September and offers a stance of ‘we are vigilant and will watch the economy’ will that help sentiment on the Nasdaq 100 which is starting to have the look of a patient with a bad cold who can’t quite seem to get rid of a cough? Microsoft and Meta step into the limelight tomorrow with earnings reports, Amazon and Apple follow on Thursday. The combination of the Fed and important quarterly earnings will impact Nasdaq sentiment and other equity indices.

It appears analysts of financial institutions are starting to discuss CAPEX – capital and expenditures – openly. And this is creating shadows as investors weigh the costs of energy and infrastructure against stated profit projections. However, let’s not throw the baby out with the bath water, the Nasdaq 100 has a gain of 20%+ over the past year (July to July), and since March the index has still gained 12%+. The war in Iran (excuse me, conflict) has not had a meaningful impact it appears on the outcome of the Nasdaq 100 via sentiment generated. But the shadow of expenditures, debt and revenue is getting louder bandwidth and speculators need to remain cautious in the indices.

Back to the Fed and Forex, the USD has been strong, you are allowed to say extremely strong if you have been betting on downside incorrectly. The USD/JPY is almost in nosebleed terrain, currently 163.830. The Bank of Japan will announce their interest rate policy very early Friday (for those of us not in Asia) and let’s see if the ‘independent’ Bank of Japan is taking a cue from their government which is clearly interested in continuing to build stronger export ratios. Has the Bank of Japan given up the so-called stated fight to keep the JPY within a solid stance? This is doubtful externally, and Japan is certainly not going to allow the USD/JPY to traverse wildly higher, but it may not consider the 165.000 mark as the end of the world. Beware of saber-rattling from the BoJ in the coming days.

Bitcoin Five Year Chart as of 28 July 2026

Doubts and Remarks Regarding Bitcoin Below $64K

On a last note, the world of cryptocurrency remains interesting and stormy. It appears from watching the awkward statements from influencers and crypto (including Bitcoin) media outlets the past couple of months, as they attempt to explain their pain and convince others that everyone should buy at these lower values that more troubles are coming.

What are the influencers, crypto media’s and importantly financial institutions’ actual skin in the game relative to those who have lost interest in Bitcoin and the digital market worth? Are influencers and large institutions like BlackRock hoping to pawn off their suffering ‘asset’ holdings to the public, while trying to convince us that today’s cheap prices represent buying opportunities? Is the wave of slanted influence and panic-like banner waving a hope to save themselves in order to cash out of a sinking market, this while hoping someone else takes their place in lifeboats that face a difficult voyage to safe harbors?

BTC/USD is near $63,4000 now. Yes, we know, we have been told plenty of times before that all the Bitcoin winters eventually turn into summer again. Blossoms will create the sweet scent of profit we are assured, but what if the winter becomes an ice age? What if Michael Saylor and his ability to produce complex financial statements and instruments for MicroStrategy and Strategy equity shares continue to make little mathematical sense? What if all the investors into Bitcoin and cryptocurrencies are left holding the bag and find themselves covered by permafrost? The tundra currently looks harsh. Will the Bitcoin crowd who has been so adamant about being free of regulatory controls and mismanaged central banks cry openly for bailouts from the U.S Treasury with USD? Now that would be entertaining.

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The Not So Coincidental World of Google and WTI Crude Oil

July 24, 2026

by Robert Petrucci with No Comment Assets Behavioral Sentiment Business Commodities Economy Equities Exclusive Content Featured Highlights Federal Reserve, Interest Rates Financial Institutions Investing Major Global Equity Indices Risk Management Robert Petrucci Speculators Uncategorized World

Energy and Commodities in a World Where Legacy and Infrastructure Collide

Google (Alphabet) finished yesterday’s trading near $ 317.69, as of this moment WTI Crude Oil is around $88.50. It might seem rather odd to pair the two into the same paragraph, but this is not a coincidence. Both are now relevant regarding energy costs for consumers and produce an abundance of legacy products the world over. And oddly enough their one year charts almost look as if they are dancing in step.

Google is facing headwinds in recent trading as questions surround its capability to produce revenues because of its push into Artificial Intelligence and always growing need for more data center power. AI which has been an abundant source of bullishness in the Nasdaq 100 and had a knock-on effect into the S&P 500 the past couple of years has become shadowed by concerns of turning into a commodity.

Alphabet (Google) One Year Chart as of 24 July 2026

As competition in the AI sector increases this is creating pressure on prices in order to allure customers away from competing brands. China is also stepping into the world of Artificial Intelligence and it will certainly use its ability to produce less expensive products moving forward. Profit margins are being fought over by competing companies

Google is not a poor company, but there are growing doubts about its debt and revenue ratios. The costs to power its worldwide data ability for its users and its investment into AI via Gemini and its DeepMind technology does not have a particularly easy solution. Estimates from a variety of sources claim that Google has reduced its staff between 1,500 to 3,000 through employee reductions and reorganization, this as the company needs to pile more cash into infrastructure.

The onslaught of other companies able to produce AI which is seen as more robust and capable have also caused a marketing headache for Google, which has an effect on behavioral sentiment. GOOGL was trading at apex levels only two months ago when it was traversing above the $400.00 mark. The downturn thus far has been bad, but not catastrophic.

WTI Crude Oil One Year Chart as of 24 July 2026

While nervous sentiment can be blamed on the situation in the Middle East the past handful of months, the downturn which has occurred for Google and other important companies on the Nasdaq 100 involved or seen as having an ancillary association with AI needs to be considered a legitimate reaction because of worries surfacing regarding the ability to simply pay for all of the research and infrastructure.

In order to power AI it is becoming clear that energy costs are part of investing frameworks. Concerns about an AI bubble started to gather an audience last fall and the rumblings have grown louder, yet it can be said the ability of Google and many other companies to gain the past year in value still outweighs this current downturn experienced the past couple of months.

The Iranian war which is ongoing, appears to be entering a phase in which financial institutions are having to succumb to the notion of higher prices not only for WTI Crude Oil but other energy resources with a mid-term viewpoint. While there is abundant supply of Crude Oil worldwide, the current problems surrounding navigation and logistics are causing pandemonium in a consistent manner via WTI’s price as Middle East nations try to ship to their clients. This is causing many Asian nations to look elsewhere for their energy, Brazil has seen an increase in orders. And because of the upwards trend in fuel costs again, the Federal Reserve will have to look hard at inflation data and play a game of interest rate mania, which investors will have to calculate into their outlooks regarding debt ratios.

What does this have to do with Google and AI?

People like nations will search for the easiest and most cost efficient pathway to access their needs. Anthropic, OpenAI, Kimi K3, Microsoft Copilot, DeepBlue Technology, Meta, Sakana AI, IBM, Nvidia are only some of the companies involved in sourcing software and providing hardware to users. Many nations are involved in this AI chase and understand the importance of cybersecurity, data sharing and the problems surrounding the costs to power all of these machines.

Many of these companies above including Google are searching for a holy grail via energy supply and discussing the financing and building of energy infrastructure including nuclear capabilities. But as Google and other companies search for more energy to fuel their dependence on powering their systems for clients, they continue to be confronted by a growing wave which will eventually drown some of the companies in debt that they will not be able to recover from.

I am not forecasting an apocalypse, but I am suggesting not all of these companies which we think of as part of our everyday lives will survive this fight. Legacy companies eventually parish, just like many start ups. The realization that many companies are merely providing what the public is starting to see as necessity is a simple competitive evolution. BlackBerry, Nokia and Motorola are examples of giants falling.

It appears many investors are starting to ask hard questions about costs compared to future earnings in AI. The allure of the next big thing, which AI has been part of the past couple of years, is running into well-practiced investment cycle as froth erodes and financial institutions start to look at the accounting of the companies they are being asked to consider as long-term endeavors. Not all that glitters is gold will certainly start to create a patina on many of the so-called AI companies as they are forced to prove their worth as suppliers of a commodity.

The AI world has run into the time honored financial realization that many exotic tastes soon turn into another form of vanilla. The next big thing is always being anticipated and hoping to attract the deep pockets of investors. Certainly many of the big companies including Google are going to survive the current headwinds. but real profits could become harder to attain. Investors and speculators should not be surprised that reality has a tendency to reduce momentum. Entropy is part of the investment world, investors and speculators always have to be ready for new disruptions and systems to emerge.

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India Insider: What Do Rural Areas Say About the Nation’s Fast Growing Economy?

July 22, 2026

by Ben Ezra with No Comment Behavioral Sentiment Economy Featured Highlights India Uncategorized World

Reflections on a Disappearing Workforce and a Long-Term Strategy

Tamil Nadu is one of the fastest growing States in India with an impressive Gross State Domestic Product result of 11.9% in financial year 2024-2025. Despite the former Dravida Munnetra Kazhagam’s (DMK) government being unseated by the new party Tamilaga Vettri Kazhagam’s (TVK) in State elections recently, Tamil Nadu has continued to attract billions of USD. Automobiles, information technology (IT), electronics, and high-end engineering from global investors continues to be alluring.

As a student of economics, I have looked at and questioned how far this growth has helped raise wages and create jobs. In other words, will these investments help create linkages across the Tamil Nadu economy and generate deeper opportunities? Tamil Nadu may have higher GDP growth than any other State economy in India, but its growth is highly skewed towards a relatively small number of sectors.

India Insider: What Do Rural Areas Say About the Nation’s Fast Growing Economy?

As noted, some of these sectors that attract investment generate high output, but employ a relatively small share of the workforce. As a result the gains are not spread evenly across the labor force.

Since the informal workforce constitutes a large share of employment in Tamil Nadu, many companies rely on contract labor that has created limited individual bargaining power. This is evident in many automobile, textile, and mobile phone assembly plants in Chennai.

I knew a friend who worked in a mobile phone assembly plant in 2019 and despite completing a Bachelor of Engineering degree, he earned only around USD 150 per month. Since employees have weaker bargaining power, wages do not rise even as inflation increases every year.

Many people leave these companies within one or two years. However, companies do now worry, because these firms can recruit replacements because the supply of educated workers remains high relative to demand. Tamil Nadu produces a higher number of graduates every year, and it knocks down the wage bargaining power of workers, allowing the formal economy to employ a multitude of people without having to raise wages

In the 1990’s these conditions weren’t prominent because there were fewer people who had accomplished university studies and graduation. Getting into the formal economy became easier and capital started to flow after the end of the License Raj era controls in 1991, this when India opened up it’s economy for foreign direct investment.

In the last two decades, Tamil Nadu’s industrialization has become heavily concentrated in cities such as Hosur, Chennai, Tiruppur and Coimbatore. Despite strong outbound trade, the State records an overall trade deficit. This also means some districts are performing well, while others remain heavily dependent on agriculture or services to generate Gross District Domestic Product (GDDP).

Pudukkottai District as a Case Study

I was doing some field surveys in Pudukkottai district, especially in the town and surrounding rural areas. And since we have no clear up-to-date Census numbers, we have to rely on the 2011 Census to understand the composition of Pudukkottai district’s economy.

According to the 2011 Census, Pudukkottai district is heavily dependent on agriculture, accounting for roughly 45–55% of employment. An important parameter to examine in the next Census will be whether this composition has changed.

Because the census is not giving us clear answers, we need to conduct random surveys across multiple villages to understand the reality. And during my visits around Pudukkottai, I consistently saw people mainly below the age of 20 and above the age of 50. Why?

This was the case in numerous villages around Pudukkottai. Still, we need stronger evidence. I repeated this exercise across different time periods to understand whether the pattern remained the same. The result was remarkably similar regarding ages.

Interestingly, the predominant working age population of India – between 25 and 40 years old – is largely absent from villages and even from Pudukkottai town, although I did see some from this age group employed in the service sector.

Where Did These Missing Workers Go?

The single reason lies in Pudukkottai district’s relatively high agricultural productivity. Since the service sector accounts for only around 30–35% of employment, the district still relies heavily on agriculture and allied activities for income generation.

That model has weakened over the last fifteen years. Lack of small scale manufacturing industries has crippled employment opportunities. Unlike Coimbatore or Tiruppur, Pudukkottai has attracted relatively few large manufacturing or technology investments. Economic growth has therefore remained dependent on agriculture, small businesses, and government employment.

Another important aspect is that many small businesses in the service sector are struggling or have closed altogether in Pudukkottai compared to 2016 because of weak local consumption. This is because people are migrating. That is clearly visible, and businesses cannot survive without a sufficient working age population. While Pudukkottai’s district’s population may have grown, much of the increase may have occurred in rural areas and been offset by outward migration of working age adults to Chennai, Bengaluru, Singapore, Malaysia, the Gulf countries and other employment centers.

The difference is also reflected in income levels. Recent district estimates place Coimbatore district per capita income at around ₹4.1 lakh, while Pudukkottai’s is approximately ₹2.4 lakh. The gap reflects differences in industrialization, labor productivity, and the availability of high value employment rather than population alone.

The next Population Census and the Periodic Labor Force Survey (PLFS) will be important in determining whether outward migration and changes in employment composition support these observations. Indicators such as graduate unemployment, labor force participation, regular salaried employment, and sector wise employment will provide a clearer picture of whether Tamil Nadu’s growth is creating quality jobs.

Limited industrial growth will become a much bigger challenge for Tamil Nadu over the coming years if unemployment among educated youth continues to remain high. Pudukkottai district is a classic example of that challenge.

India’s fast growing economy needs proactive business policies in small towns, together with the infrastructure needed to attract manufacturing and private investment. Depending primarily on IT hubs or remittances from the Gulf and Southeast Asia is not a sustainable long-term strategy.

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Why the U.S Fed Should Lower Interest Rates Closer to 2%

July 16, 2026

by Charles Najjar with No Comment Assets Behavioral Sentiment Central Banks Charles Najjar Economy Exclusive Content Featured Highlights Federal Reserve, Interest Rates Financial Institutions Forex Investing Risk Management Uncategorized

Fighting Inflation with Higher Interest Rates is Totally Counterproductive

For nearly a century, central banks have relied on one dominant prescription to fight inflation: raise interest rates. The theory is straightforward. Higher borrowing costs discourage spending and investment, reducing demand and eventually slowing price increases.

While this approach may have worked reasonably well in the past, today’s economy is fundamentally different. Applying the same monetary formula developed in the past century by Irving Fisher is obviously creating more problems than it solves. In many cases, raising interest rates has become a counterproductive way to fight inflation.

The first and most obvious consequence is the impact on government finances. As interest rates rise, the U.S. Treasury must refinance its enormous public debt at increasingly expensive rates. The result is an explosion in annual interest payments, which now exceed $1 trillion. Those payments are in fact a direct injection of additional liquidity into the economy while simultaneously widening the federal deficit.

U.S 10-Y Treasury Yields Five Year Chart as of 16th of July 2026

Ironically, a policy designed to reduce inflation is contributing to larger government spending through higher debt-servicing costs. Instead of easing inflationary pressures, excessively high interest rates may actually reinforce them through this fiscal channel.

Consumers also bear a heavy burden. Modern households depend far more on credit than previous generations. Credit cards, auto loans, and consumer financing have become an integral part of everyday life. When the Federal Reserve raises interest rates, millions of Americans see the interest on their credit card balances climb to 20% or more.

Many families attribute their declining purchasing power entirely to inflation, when in reality a significant portion of the financial pressure comes from soaring interest payments.

Businesses suffer as well. Higher interest rates increase the cost of financing, while the same capital could be dedicated to investment, expansion, innovation, and research. Every additional dollar spent on interest is a dollar that cannot be invested in productive activity.

A recent example is SpaceX, which issued debt carrying a yield of approximately 6.65%. Given the company’s negative cash flow, investors naturally require a risk premium. However, if the Federal Reserve’s policy rate were closer to 2% rather than current levels, the company’s borrowing costs would be at least half their current level. The extra interest payments would instead be directed toward research, development, hiring, that would strengthen long-term economic growth.

In the current race for AI, that requires heavy investments, the Fed should lower the financing burden on U.S companies. Every additional percentage point of interest represents billions of dollars transferred from productive investment to debt servicing. Money that could finance AI chips, data centers, engineers, research laboratories or new factories instead goes to creditors.

The U.S cannot simultaneously declare China its principal strategic competitor while maintaining a monetary policy that systematically makes capital more expensive for American businesses than for their Chinese rivals, that benefit from much lower rates. The Fed may intend to fight inflation, but it is also making it more costly for American companies to invest in the industries that will determine economic leadership over the decade. The Fed may believe it is fighting inflation, but it is simultaneously increasing the cost of winning the AI race.

Perhaps the greatest weakness of relying on high interest rates is that much of today’s inflation originates from supply-side shocks that monetary policy simply cannot fix.

How does raising interest rates reduce the price of oil when energy prices are driven by geopolitical tensions such as the war with Iran?

How does raising interest rates lower egg prices when shortages stem from productivity issues in the poultry industry?

How does raising interest rates lower the prices of wheat, corn, or cocoa when inflation is due to droughts, floods, or other climate-related events?

How does it reduce insurance premiums that are rising because natural disasters have become more frequent and more costly?

In each of these cases, higher interest rates are totally inefficient to address the underlying cause of inflation. Instead, they merely increase financing costs across the economy while leaving supply constraints largely unchanged.

A more effective strategy would be to fight inflation where it actually originates. Governments possess fiscal tools that can be deployed with much greater precision than broad monetary tightening. Temporary subsidies, targeted tax relief, incentives for increased production, strategic investment in critical industries, and, in exceptional circumstances, carefully designed price controls can address specific inflationary pressures without unnecessarily slowing the entire economy.

For example, if geopolitical tensions cause oil prices to spike, temporarily subsidizing fuel or reducing fuel taxes is likely to be a far more direct and effective response than raising interest rates across the entire economy. Similarly, boosting domestic agricultural production is a better solution to food inflation than making mortgages, business loans, and credit cards more expensive.

The Fed should therefore focus on reducing the financing burden on both the federal government and the private sector. Maintaining interest rates closer to 2% would significantly lower debt-servicing costs, support productive investment, and allow fiscal authorities to intervene more effectively with targeted measures when inflation arises from specific sectors.

The doctrine of fighting inflation through higher interest rates was developed by Irving Fisher nearly a century ago, in an era with very different financial institutions, consumer behavior, and sources of inflation. Credit cards did not exist. Household debt was far lower. Global supply chains, geopolitical energy shocks, and climate-related disruptions were not defining features of inflation.

The modern economy requires modern solutions. Rather than relying almost exclusively on higher interest rates, policymakers should recognize that today’s inflation often demands targeted fiscal responses. Persisting with an outdated monetary framework risks imposing unnecessary costs on governments, businesses, and households while failing to address the real drivers of rising prices.

Supporters of high interest rates often argue that they are unavoidable whenever inflation rises. Yet international experience suggests otherwise.

Switzerland has repeatedly maintained policy interest rates close to 1%, or even below zero in previous years, despite being exposed to many of the same global shocks affecting other economies. Switzerland imports energy, is affected by fluctuations in oil prices, and faces the same geopolitical uncertainties. Yet the Swiss National Bank has generally preferred to tolerate modest inflation rather than impose unnecessarily high financing costs on households, businesses, and the government.

This illustrates an important principle: not every inflation shock requires an aggressive monetary response. When inflation is primarily imported through energy prices or supply-chain disruptions, forcing the entire economy to pay dramatically higher borrowing costs creates more economic damage than the inflation itself.

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The Great Compression Part 3: The Immovable Object

July 11, 2026

by Yulia Vaiman with No Comment AMT Markets Artificial Intelligence Business Commodities Corporate Economy Equities Exclusive Content Featured Highlights Investing Risk Management Technology Yulia Viaman

The Landlord Beneath the Cloud

There is an old paradox: what happens when an unstoppable force meets an immovable object? The AI buildout is the unstoppable force – the largest concentrated wave of capital spending in history. The immovable object is the physical world it is colliding with. Land, power, and water are the tangible bedrock that no balance sheet can conjure into existence. The paradox has a resolution the classical philosophers never thought of: the immovable object collects the rent.

Consider the scale of the force first. The four hyperscalers – Amazon, Alphabet, Meta, and Microsoft – plan to spend roughly $725 billion on capital expenditures in 2026, up nearly 80% from the year before. Add Oracle, the neoclouds, sovereign funds, and the rest of the AI heavy spenders – and total compute capex crosses $1 trillion in a single year, the first trillion-dollar year of its kind. Much of that money flows to the visible beneficiaries the market already knows by heart: NVIDIA for the GPUs, Micron for the memory, Dell for the servers, Cisco for the networking. Silicon, racks, interconnects.

The Great Compression Part 3: The Immovable Object

But every one of those chips has to be housed somewhere. It has to be powered. It has to be cooled. And this is where the unstoppable force runs into something it cannot simply outspend.

The constraint is no longer capital, and it is increasingly no longer silicon. It is the physical world. The bottleneck has shifted to power generation and grid interconnection, which take years to permit and build, and to the land and water that data centers consume at industrial scale. The richest corporations that have ever existed are discovering that a signed check does not produce a megawatt or a water right. The immovable object has begun to set the terms.

Nowhere is this clearer than in a deal signed on June 23^rd. Texas Pacific Land Corporation, aka TPL, agreed to provide the surface acreage and brackish water for Project Kilby, a large-scale power generation facility Chevron is building to supply a Microsoft data center cluster in Reeves County, Texas. When the announcement crossed the wires, Chevron’s name led every headline – and TPL was a footnote.

Meanwhile, the framing should be exactly backwards. Chevron, for all its scale, is the replaceable party in that transaction. Exxon, Occidental, or any of a dozen major energy companies could have built that power plant. What none of them could have supplied is the specific land and the specific water rights in that specific corner of the Permian Basin – because those belong to TPL, and there is no substitute for them at any price. The company that got the headlines is interchangeable. The company that got the footnote is the immovable object.

TPL is the purest expression of the scarcity trade beneath the AI buildout. It owns roughly a million acres of West Texas and produces almost nothing itself. It does not drill. It does not manufacture. It collects royalties, easements, and water fees from everyone who needs to operate on its ground. It is a toll booth on the physical world, and the AI buildout has just become one of its largest new customers. For years the market valued it as an oil-and-gas royalty play. It is quietly becoming an infrastructure landlord for compute – and almost nobody has ever heard of it.

The same logic radiates outward through the entire physical layer. Power is the genuine bottleneck, and the companies that generate it are being repriced accordingly. Constellation Energy, the largest operator of nuclear plants in the U.S., has become an unlikely AI stock as hyperscalers sign long-term deals for the one thing they cannot build fast enough: reliable, always-on baseload power. The grid that carries it has its own set of indispensable names – Quanta, which builds and maintains transmission infrastructure; GE Vernova, which supplies the turbines and grid equipment; Eaton, whose electrical systems distribute power inside the data center itself. And as chip density rises, the heat has to go somewhere, which has turned Vertiv, a maker of cooling and thermal management systems, into a core holding of the buildout.

What is striking is that this category does not merely sit still and collect. Some of its members are actively repositioning to attack. Ford, unable to win the electric-vehicle war against Tesla and nursing a $19.5 billion writedown on its EV investments, has taken the same physical assets – its plants, its battery capacity, a century of manufacturing expertise – and redirected them. In May it launched Ford Energy, a subsidiary building grid-scale battery storage systems, with data centers named explicitly as the demand driver. The immovable object, it turns out, can also choose its targets.

This is the HALO trade: Heavy Assets, Low Obsolescence. Companies whose value rests on tangible, physical assets and established operations that are expensive, time-consuming, or regulated – and therefore very hard to replicate. Land. Power. Grid. Water. Steel and concrete and copper. The unglamorous inputs that no model can commoditize because they cannot be reduced to software, and no amount of capital can summon into existence overnight.

None of this is permanently fixed, and it would be dishonest to pretend otherwise. Innovation erodes scarcity: small modular reactors, advanced geothermal, and better transmission technology will, in time, loosen some of the constraints that look absolute today. But two things blunt that threat. The first is Jevons paradox – when a resource becomes cheaper to use, consumption rises to swallow the savings, which means more efficient power generation is likely to expand the buildout, not shrink the edge of the providers. The second is that not all heavy assets are equal. The manufacturers and equipment makers face real competitive pressure over time. The owners of irreplaceable location – the specific acre, the specific water right – do not. You can build a better reactor, but you cannot build another Permian Basin.

The value that fled the human middlemen, that commoditized in the model layer, that migrated up the stack toward proprietary data and orchestration – also flows downward, and at the bottom it stops. It settles into the ground, into the wires, into the water table. But the ground is not neutral territory: land is permitted, power is regulated, water is allocated, and the fabs that print the silicon sit inside country borders. The unstoppable force keeps accelerating; the immovable object keeps collecting. And the moment we ask who owns the immovable object, the scarcity trade stops being a matter of markets and becomes a matter of sovereignty.

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India Insider: Foreign Investors and Their Selective Choices

July 8, 2026

by Ben Ezra with No Comment Assets Behavioral Sentiment Ben Ezra Business Commodities Economy Equities Exclusive Content Featured Highlights India Investing Major Global Equity Indices Uncategorized World

Return of Global Investors into the Indian Marketplace

Global investors are gradually returning to Indian assets after months of persistent outflows as risk appetite sentiment has been ignited by an extended ceasefire between the U.S and Iran. Energy prices have moved in India’s favor, sparking favorable conditions.

Despite recent flare ups in the Strait of Hormuz, Brent Crude has dropped about 30% in the past quarter, easing India’s fuel concerns as the world’s third largest Crude Oil buyer. AI trade rotation is gathering pace in Asia also, this as investors pull money from chipmakers that powered this year’s rally and hunt for cheaper ways to deploy their cash.

NIFTY 50 One Year Chart as of 8th of July 2026

Indian equities beat its emerging markets peers in June by its biggest margin in seven months. The Reserve Bank of India’s measures to attract foreign currency deposits and overseas capital have eased funding concerns for lenders, record foreign inflows into government bonds have helped stabilize the Rupee and improve liquidity conditions. According to Bloomberg, “Goldman Sachs favors 30-Year government bonds as lower oil prices allay inflation and fiscal risks”.

Combined with resilient credit growth and improving asset quality, India’s banking sector is once again attracting global investors, this after trading at meaningful discounts to historical valuations for quite a while.

Second Opportunity May Be Information Technology

Indian IT companies have undergone a sharp valuation correction over the past two years. Unlike the post pandemic period, when large Indian technology firms traded at substantial premiums to global peers such as Accenture. These premiums have now narrowed considerably after earnings growth slowed, and enthusiasm surrounding Artificial Intelligence shifted investor attention towards US technology companies.

As highlighted in Business Line magazine, the sector is undergoing a healthy valuation reset, with investors increasingly questioning whether premium valuations remain justified without a corresponding acceleration in earnings growth.

However, the discussion extends beyond valuations. Artificial Intelligence is fundamentally reshaping the enterprise software industry. For decades, Software as a Service (SaaS) companies dominated enterprise technology by offering standardized cloud based solutions that were cheaper and easier than developing software in-house. That advantage is now beginning to erode.

Large AI companies such as OpenAI and Anthropic are building AI agents capable of operating across multiple enterprise applications through a single conversational interface. Rather than competing within individual software categories, these horizontal AI platforms could reduce the importance of stand alone enterprise applications by seamlessly connecting them. At the same time, AI native startups are targeting specialized business functions, while advances in generative AI are encouraging enterprises to revisit the traditional ‘build versus buy’ decision as they develop customized software internally at significantly lower costs.

For Indian IT services companies, this represents both a disruption and a new opportunity. Routine application development and maintenance may become increasingly automated, placing pressure on traditional outsourcing revenues. Yet demand for AI integration, cloud migration, cybersecurity, enterprise transformation, and customised AI deployment is likely to create an entirely new investment cycle. The winners will be firms that evolve from conventional software service providers into strategic AI implementation partners.

Risks ahead for Indian Markets

The near term outlook is not without risks for India. A weak monsoon could push food inflation higher. Elevated Crude Oil prices may widen India’s external balances. And a stronger USD with elevated U.S interest rate yields could moderate foreign capital inflows. The technology sector also faces a structural challenge as Artificial Intelligence reshapes the traditional software business model, requiring companies to adapt more quickly than in previous technology cycles.

Even so, the broader macro backdrop appears to be improving. Policy measures have eased liquidity conditions, corporate balance sheets remain healthy, and valuations across several sectors have become considerably more attractive after an extended correction. Rather than chasing expensive momentum trades elsewhere in emerging markets, global investors may increasingly look toward Indian sectors where fundamentals are strengthening while expectations remain relatively subdued.

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What Am I Missing About USD Centric Strength?

July 1, 2026

by Robert Petrucci with No Comment Behavioral Sentiment Central Banks Economy Equities Featured Highlights Forex Investing Risk Analysis Speculators Uncategorized

Being Wrong About USD Direction and Betting Against the Trend

Help me out here folks, I am perplexed. I seem to be missing something about the USD centric strength, it looks very overbought to me. Where is all the buying sentiment coming from? The FOMC meeting outcome on the 17^th of June has certainly sparked USD centric buying stamina as financial institutions seem to have fallen into a strict line and priced in a Federal Reserve interest rate hike this year.

However, the price of WTI Crude Oil was near $80.00 on the 17^th of June. And on the 3^rd of June the price of WTI Crude Oil was within sight of $100.00. Meaning that we have seen the price of energy trend lower. The agreement between the U.S and Iran, although fragile, has held and the current price of WTI Crude Oil is close to $69.70.

WTI Crude Oil One Month Chart as of 1st July 2026

While concerns about inflation certainly remain, costs should actually start to erode for logistics, fertilizers for agriculture, and manufacturing. Job numbers are solid, growth has been rather steady and shown signs of improvement. If inflation starts to behave and financial institutions change their thinking about interest rates to come, perhaps they will ease off on their borrowing costs.

Also, let’s note that as expected the new Fed Chairman Kevin Warsh has made it clear he will take a more proactive stance regarding interest rates. Evidence for this comes via Warsh’s decision not to participate in the dot forecast that FOMC members use, his absence from the Fed’s ‘prediction market’ game was notable, but many analysts seem to have missed the importance.

In my opinion, Warsh’s decision not to participate in the Fed’s dot plot quarterly signal chart shows the new Chairman wants to create the capability of changing his mind regarding the Federal Funds Rate as needed. The decision not to ‘anonymously’ show what his beliefs are looking forward will allow him to steer the Federal Reserve per forward looking economic data points instead of being held accountable – and possibly blamed – for changing his mind if a shift of opinion is needed.

So again, why is the USD so strong across the Forex board? The USD/JPY is trading well above 162.660+, the EUR/USD is near 1.13900, the GBP/USD around 1.13247 and the USD/SGD is sustaining value at mid-term highs close to 1.29660. While financial institutions appear to have priced in an interest rate, and may also be nervous about volatility in U.S equity indices, the cautious approach has created in my opinion an overbought USD.

As the Independence Day holiday approaches, Forex traders should be careful. If ever there was a time for the Bank of Japan to intervene and cause chaos it might be when USD Forex volume is minimal. Large USD traders may start vanishing in the coming days before the long holiday weekend, and the absence of U.S banks this coming Monday will also factor into the markets.

Selling the USD looks like a speculative bet certainly, particularly because its trend has proven rather strong the past few weeks. Let’s see what happens, but I suspect some downside pressure via USD centric price action is going to be generated.

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Nvidia Suffering From the AI Cold Bothering Investors and Speculators

June 30, 2026

by Robert Petrucci with No Comment Assets Behavioral Sentiment Commodities Economy Equities Exclusive Content Featured Highlights Investing Risk Management Robert Petrucci Speculators Uncategorized

AI: Exuberance and Threats of Fatigue

Has Nvidia now been oversold? While the Nasdaq 100 produces a casino like experience for day traders and large players, the velocity of value changes in the index should serve as a simple reminder that before stepping into traffic a speculator needs to acknowledge the road. A large collision is taking place before our eyes and it will generate more noise over the coming months.

Nvidia is a solid indicator of behavioral sentiment being influenced by a mix of optimism and fears by speculators and investors competing, and trying to define terrain as turmoil swirls and a battle for profits rage. Day traders need to remember a lot of hyperbole is amplified to get eyeballs on opinions, hoping that your attention is grabbed. (Please buy me a cup of coffee has become a begging mantra).

Nvidia One Year Chart as of 30th June 2026

Nvidia finished yesterday’s trading near $195.00, this after touching highs in May around the $238.00 vicinity. The fact that NVDA has lost a large chunk of its value indicates sentiment is not entirely rational. There is a vast difference between speculative hopes compared to long-term investing.

Results in the stock markets do show symptoms of overbought conditions prevail, but over indulgent fears are taking hold as folks try to interpret every move in a haphazard manner and make correlations which often have no evidence. Nvidia is a solid company which will continue to produce product lines that will be needed long-term. Talk of Nvidia suffering from an AI cold is relevant because it has certainly lost value, but the patient is going to survive.

Others however may not. AI companies and their proclamations about being able to deliver substantial change for users has become tiresome. Supply of software is widespread. While there is demand for use, competitors are abundant and growing daily. Users can now question just how reliable and strong the products they are using are, and if promises meet the results wanted. Costs users are paying for services will also become more critical. If products don’t meet needs, other AI systems can be easily installed nowadays.

Oversupply is Saturating the Marketplace

Because AI tools are widespread it means users will demand services get cheaper. At some point it is clear that consumers will gravitate to competitive pricing, because at the end of the day there is only a certain amount of time to verify all the products in the marketplace and understand what works best. Branding as always is important, but so is quality. Loyalty in the AI world is only a couple of years old and cannot be counted on, some early companies are already seen as legacies and allegiances will shift.

Competitors and new ideas continue to be brought forth quickly. A lot of product is being rushed to the market that lacks proper Q&A and actually does not deliver what is promised. Proof of concept is fluid with Artificial Intelligence, along with many claims of superiority. A company can get a product into consumers hands first, but at some point value has to be delivered too.

Investors are growing wary from too many claims. Yes, a revolution has taken place, but a counter-revolution is certainly coming. A lot of AI products are simply poor. Day traders have seen chaotic results on the Nasdaq 100 over the past year.

President Trump, tariffs, the war in Iran, Federal Reserve and interest rate uncertainty, fear of inflation (all headlines from only the past few weeks) and other complexities can be blamed for volatility as folks wager on values on the Nasdaq 100. However, the prime mover of the index has not only been investing by long-term players, it has come from speculation chasing momentum via the Artificial Intelligence boom. However, a genuine concern that a fear of missing out is turning into fatigue exists.

AI because of its abundance is going to eliminate competing systems which are seen as cumbersome and expensive. Chinese companies appear ready to confront American enterprises with cheaper products that consumers may not mind paying less for even if this means consumers are sharing intellectual property and data with unknown entities.

Sakana AI from Japan has announced and shown the past couple of weeks that it has software, Sakana Fugu, that is comparable in a favorable manner to Anthropic and Claude services. Sakana testers claim their system is robust and offers a multi-integrated modeling system, meaning a user doesn’t have to toggle in and out of models to deliver efficient information. The data via Sakana’s system is brought together via coordinated agent forces for the user. What will this do to valuation of Anthropic moving forward?

There is also a South Korean company called Furiosa, which is not public yet, that stands in the shadows and makes outstanding AI infrastructure. Furiosa appears ready to become an important player in chips and software innovation. Nvidia is certainly keeping their eyes on Furiosa. Meta offered Furiosa 800 million USD and was rejected in March 2025.

Investors and speculators should not discount the potential of an AI tech dump from global competitors into the U.S and elsewhere developing over the next year. Mobile phones became a rather boring commodity after their initial entry astonished first time users two decades ago, AI will undergo the same pathway.

Some AI companies will certainly struggle over the next few years, but other enterprises will succeed merrily and profit. There is a big difference between investing and speculating. Even mid-term forays into the stock markets remain only gambles if a person plans on cashing out profits when they have hit a price target, instead of long-term ambitions to own shares in a quality company.

Nasdaq100 bubble talk which has recently reignited in a loud manner should be given attention but astutely. It is hard to argue that the value of the indices like the Nasdaq 100 and S&P 500 are not in over-inflated territory. Looking at historical p/e ratios seems to have gone out of fashion. Warren Buffet cannot be thrilled and his fundamental strategies should not be ignored. Speculative hype needs to be confronted by investment reality. Folks will continue talking themselves into stances that are comfortable, even if they make little sense. The markets will certainly survive and so will AI.

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India Insider: Systematic Investment Plan Boom

June 26, 2026

by Ben Ezra with No Comment Assets Behavioral Sentiment Ben Ezra Corporate Economy Exclusive Content Featured Highlights Financial Institutions India Investing Uncategorized World

Liquidity, Valuations and the Limits of Domestic Capital

India’s equity market has surprised many investors over the past two years. Despite persistent foreign institutional investor selling, weak net foreign direct investment (FDI), subdued private capital expenditures and a depreciating Rupee, the broader markets have not fallen and proven remarkably resilient. But risks abound.

Many observers point to the rapid growth of Systematic Investment Plans (SIPs), which millions of retail investors invest regularly via mutual funds in India. Monthly SIP inflows into the Indian equity market has reached record highs at the tune of 32,087 Crore Rupees ($3.38 billion USD) in March, 2026 per AMFI (Association of Mutual Funds India) data.

Nifty 50 Five Year Chart as of 26th June 2026

Before COVID-19, the stock market industry in India was a boring business. Accounts were opened via paperwork, and demat (the account in which the digital shares were held) in a bureaucratic manner with multiple paperwork requirements. Clients who liked to participate in the Initial Public Offerings (IPOs) had to go to their broker or issue a cheque to participate in the bidding process. As of 2019, the total demat accounts in India stood at 40 million. Sophisticated retail investors would go to their local branches of associated brokers and trade stocks, derivatives or commodities. They sometimes would use telephone or online orders.

All this changed during the Covid-19 pandemic, when equity market valuations became depressed and people were forced to stay at home. This ushered a wave of new retail traders who had time to master the game and wanted to capitalize on the falling valuations of many companies and take advantage of opportunities they believed in. Astonishingly, demat accounts opened between 2020-2026 totaled around 180 million, almost quadrupling pre-Covid levels. Due to digital penetration and the rise of discount brokers, young retail traders were able to quickly allocate substantial portions of their monthly income into SIPs.

SIPS have strengthened the financial market resilience of India, compared to the previous decade when it was the domestic institutional investors who helped market stability. Yet concerns are now arising whether domestic household savings are supporting fundamentally stronger companies, or are creating systematic inflows which help tenuous companies to have higher valuations?

For instance, a famous financial markets journalist recently argued that India’s SIP boom has fueled expensive stocks. Thus, enabling insiders and institutions to exit at favorable prices, reduced future return potential, has weakened the Rupee, and exposed the limitations of crowd-driven investing.

As the AMT India Insider columnist, I decided to investigate these considerations and talked with some people in the financial markets who offered different perspectives regarding the issue.

Mr. Mahalingam, an IIM alumnus noted, “it is difficult to generalize like that. Total SIP inflows should be viewed relative to the total market capitalization of listed companies, not in absolute terms. If the Nifty delivers around 12% returns, it roughly doubles every six years. SIP inflows must also increase over time, simply to purchase the same proportion of shares.”

Arguably, the SIP flows into the Nifty Index some 15 years back are not comparable to today. Considering the higher capitalization of Nifty listed companies (which means greater share values), and given the Nifty index has delivered 12% returns in the last few years, and that it took 6 years for it to double at this rate, it’s important that investors look at higher share prices values arising out of company earnings while considering their investment decisions.

Mr. Prasath, who taught economics and finance to students during his tenure at a private educational institution, argues, “I think there are many dimensions. In stock markets, everything comes down to valuations, the continuous SIP flows may diminish future returns if the earnings don’t grow. But comparing SIP flow with 2005 numbers exaggerates the issue. The Indian economy has grown bigger since 2005 and naturally inflows will also grow accordingly. India has one of the lowest public participation in the capital markets, even with current SIP numbers.”

Mr. Prasath continued, “currently the world is going through turbulent times with the Russia-Ukraine war, the Trump Presidency including tariff actions, the Iran situation and energy crisis, and supply chain disruptions, etc., which are effecting economic growth. The Indian government is also not taking some required steps. Indian companies also have low R&D and failed to participate in emerging themes like AI and semiconductor development. These turbulent times will continue for awhile and Indian markets will underperform its peers. So we have to wait for better times or for world leaders to come to their senses. I think we have to remain both optimistic/realistic and plan our investments accordingly”

If India grows at 7.7% during the 2025-2026 annual year, and foreign capital (especially foreign portfolio investment) is leaving, while private capital expenditures are weak and government capital expenditures are increasing, then what’s the point of higher stock prices for many of these companies? Is it due to steady retail SIP inflows? Does it really help institutions and insiders to cash out, and make retail investors vulnerable? Foreign investors have sold $29 billion USD worth of equities so far this year, and the Rupee has taken a hit, yet we have not see drastic changes in companies’ share or indices values.

In 2022, when the U.S Federal Reserve was raising interest rates, the Nifty 50 Index lost around 3000 points, but this did not happen in 2026. The SIP retail crowd and domestic institutional investors have absorbed the foreign investors’ outflows and provided a cushion for share prices.

Even if some people in the financial markets argue that the foreign investors’ selloff off did not result in poor corporate performance or themes becoming weak, given that the growing market capitalization and the past earnings has justified the higher share prices, it’s significant to note that the Net FDI remains weak. Indian and foreign corporations are repatriating cash at a faster pace, and capital is flowing out of India. That’s ironically what hit the Rupee this year, along with higher oil prices due to the Iran war. In my opinion, private capital expenditures of listed corporations has to grow to justify higher earnings multiples.

Kotak Mahindra Bank director Paritosh Kashyap, while talking to Business Line said that private capital expenditures in India has been subdued for the last 10 years. Higher interest rates, expensive oil and lower equity valuations has dampened sentiment. India’s government Capex (capital expenditure strategy) remains the primary driver.

To summarize and conclude, weak foreign direct investment, subdued private investment, and inflated valuations of Indian assets along with a lack of AI related development is a large underlying issue and concern. For foreign investors to return with greater force again into Indian equities, either the Rupee has to depreciate or equity prices have to decline to generate investor confidence and create an appealing landscape. Retail investors may soon have to face drawdowns in their portfolios as returns dwindle and headwinds move against them.0

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Forex and the Fed Chair: Kevin Warsh in the Spotlight Later Today

June 17, 2026

by Robert Petrucci with No Comment Assets Behavioral Sentiment Central Banks Commodities Economy Equities Exclusive Content Featured Highlights Forex Investing Major Global Equity Indices Risk Management Robert Petrucci Speculators Uncategorized

New Federal Reserve Chairman will Cause a Reaction in Forex Today

I offer readers a ‘what if’ proposition ahead. These are my opinions and I am simply trying to give my perspective on what may happen in the Forex market in the coming hours.

The Fed Press Conference later today will be must watch television for Forex traders, including retail speculators, large players and financial institutions. Federal Reserve Chairman Kevin Warsh will make his first appearance after a FOMC rate decision. Dynamic conditions in the broad Forex market should be anticipated – that doesn’t tell day traders much I know, keep reading, please.

U.S inflation has sparked higher this as energy prices have ignited upwards and caused logistics, manufacturing and agriculture to become more expensive. The Bank of Japan raised its interest rate by a quarter of a point yesterday to 1.00%. However, these two bits of evidence doesn’t mean the Federal Reserve will increase its interest rate today.

The U.S Dollar Index is trading near relative highs. The broad FX market is certainly cautious, but financial institutions may be leaning into the notion of USD centric weakness. Yes, the USD/JPY remains above 160.000+ for the moment, but the USD/SGD is flirting with its lower range and came within sight of the 1.28000 mark on Monday. So why is this important? Because folks are acting cautious before a potential storm.

U.S Dollar Index Six Month Chart as of 17th of June, 2026

Perhaps this will go down as an infamous egg on the face situation for me personally, but does Fed Chair Kevin Warsh really want to raise interest rates during his first FOMC meeting at the helm? Yes, Jerome Powell is still around as a voting Governor, but Warsh may find he has enough votes (and influence) to get a majority of other FOMC voting members to allow today’s decision to be a test case in favor of patience.

If the Fed holds the Fed Funds Rate in place and announces it will use the near and mid-term as a trial period regarding their belief inflation will lessen, because it believes energy prices over the mid-term will erode rapidly, that may be enough to cause USD centric selling later today. The Fed will not use the word transitory I suspect, but an argument can certainly be made that now is the time to actually elucidate on the subject of transitory inflation.

Monday’s trading in the broad Forex markets showed that financial institutions bought into the optimism of an anticipated U.S and Iranian agreement and what it could deliver – a glut of Crude Oil, including lower costs for its ancillary products. Financial institutions were also relieved that U.S equity markets survived the launch of the SpaceX IPO certainly. While yesterday’s broad market trading turned cautious and demonstrated sideways action in Forex, many major currencies are traversing near curious values. Equities also went sideways for the most part on Tuesday.

The U.S Dollar Index is swimming within its higher terrain via a six month chart (per a look above), yet financial institutions – if they hear dovish sentiment from the new Fed Chair today could spring into action and sell the USD quickly. Day traders need to understand even if this occurs that it will still be ultra-dangerous to bet ahead of the Fed rate announcement and Press Conference. This because volatility leading up to and following the FOMC Federal Funds Rate decision will create large spreads in Forex and choppiness that small retail accounts cannot handle most of the time – particularly when too much leverage creates wildfires.

While the before and after of the Fed interest rate announcement will garner the headline news, and create a reaction on Wall Street for the S&P 500 and Nasdaq 100 immediately; it will be wise to pay attention to Fed Chairman Kevin Warsh a half hour later when he steps into the spotlight for the first time. There has been chatter that Warsh is not keen on trying to give too many signals regarding the Fed’s thinking regarding every move it is contemplating.

This coincides with thoughts that Kevin Warsh and Scott Bessent believe in a more high-tech and pro-active approach to interest rate and monetary policy based on forward looking data. The consideration of a more dynamic approach to interest rates has not been widely considered by financial institutions quite yet. If the new Fed Chair surprises reporters and onlookers at the Press Conference today with a new philosophy on the way the Fed will work, this will set the stage for potentially large behavioral sentiment shifts that were not wagered on quite yet. In other words mid-term outlooks regarding U.S interest rate policy may change in a handful of hours more than many people think.

Maybe I am wrong, maybe I am interpreting the political and financial landscape incorrectly, but these are my thoughts as a risk analyst – one who thinks the U.S White House would not mind seeing a weaker USD, a Fed that likely wants a different approach to interest rates – as they both hope for energy prices to lower (and may get their wishes fulfilled).

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AMT Top Ten Miscellaneous Meditations for the 16th of June

June 16, 2026

by Staff with No Comment AMT Top Ten Assets Basketball Behavioral Sentiment Commodities Economy Equities Featured Highlights Major Global Equity Indices Risk Management Speculators Uncategorized World

Memorandum of Misunderstanding, the SPCX Rocket, the Knicks and Brazil as Jazz Plays in the Background

10. Legacy: Sonny Rollins passed away on the 25th of May at the age of 95. Rollins was a master jazz musician and saxophonist who will be listened to forever. His sound, cadence and imaginative ability to create while playing with bands, and often lead via his unique style make him an everlasting legend. If you haven’t listened to Sonny Rollins start out with his song St. Thomas via Saxophone Colossus.

AMT Top 10 Miscellaneous Meditations for the 16th of June, 2026

9. Surreal: The New York Knicks won their first NBA Championship in 53 years. Some Brazilian football fans returning to their hotels after their team’s 1-1 draw versus Morocco in their Group Stage World Cup match in New Jersey had to walk through throngs of Knick fans celebrating on the streets of Manhattan in bizarre looking circumstances as they worried about their national team. Walt Frazier and Pele both wore Puma and met in the 70’s.

8. Strategy: Michael Saylor continues to claim the wet and cold Bitcoin wind blowing back in investors’ faces is a refreshing mist that will invigorate the HODL crowd eventually. In the meantime MSTR is near $131.00 and BTC/USD around $66,300.00. Saylor sees Bitcoin above 1 million eventually and beyond, while some others see headwinds and more losses developing.

7. Bleeding Money: Political mismanagement shadows Chicago which appears ready to lose the Bears football team via a new stadium across state lines in Hammond, Indiana, this as team officials and ill-equipped Illinois leaders argue about property taxes and other business considerations (and maybe kickbacks). NYC is hurting for funds too, this as important companies make plans to place their corporate headquarters and employees elsewhere and avoid Mayor Mamdani’s nonsense. Apollo Global Management is the latest to decide to venture forth into Texas and make its New York presence less important.

6. Commodities: Gold is near $4,330.00 this morning, Silver around $70.00 and WTI Crude Oil close to $78.00 via futures pricing.

5. Nasdaq 100: The index finished 3.06% higher yesterday and at a value of 30,543.92 per last night’s close. The Nasdaq 100 has been delivering a wild ride for speculators and investors. The index saw all-time highs in early June when it went above the 30,700.00 level. The S&P 500 concluded Monday’s trading at 7,554.28 and up by 1.65%, the index’s high was also in early June when it went above 7,600.00. For all the talk of doom and gloom over the past week and a half with fears about a sustained run downwards in the U.S indices, they are showing upwards momentum for now.

4. BoJ: The USD/JPY remains within sight of the 160.000+ mark consistently. While other major currencies have gained a bit the past few days against the USD, the Japanese Yen remains sticky near its highs as the Bank of Japan is likely watching speculators wager on the higher realm. FX traders need to remember that the BoJ may act when it feels it has enough clarity regarding the Iran saga and inflation concerns. In other words, a warning shot may come soon threatening an intervention. Buyers beware.

3. SpaceX: Is it a bird or a plane? No, its a 2.1 trillion market cap valuation via a rocket like IPO on the Nasdaq 100. While some may want to bet against Elon Musk early, those type of decisions have proven costly mistakes for some short sellers in the past when dealing with Musk and Tesla. Some may argue for value of $115.00 and less per each SPCX share, but it might prove unwise to step in front of the upward trend for the moment. Case in point, Tesla is near $411.00 per share and causing chagrin within certain crowds as they point to weakening sales, but only see the company do better in value. Oh, and SpaceX ended Monday’s trading at $192.50.

2. Fed: Kevin Warsh leads the FOMC Committee as the Chairman for the first time as the Federal Funds Rate decision awaits this Wednesday. Some think the Fed will increase the interest rate by 0.25%, AMT does not based on the opinion Chairman Warsh likely wants to start off his job on friendly terms with the White House and Treasury, while also counting (hoping) on cheaper energy prices.

1. MoU: The Iran conflict awaits a signed agreement. The terms of the Memorandum of Understanding are being whispered, but transparency has not been delivered and won’t be until Friday supposedly when the U.S and Iran attend a ceremony in Switzerland. While financial institutions and global markets are ready to turn the page and engage in optimistic outlooks, it remains to be seen if negotiations will lead to tangible results as multiple questions and concerns linger. In the meantime a sizeable part of Iran’s population still lives under tyranny. Who won? Did President Trump make a quiet deal with China to guarantee oil flows from the Strait of Hormuz and receive something in return during his visit to Beijing from the 13th to the 15th of May? There appears to be room for plenty of misunderstanding.