10Y Treasury Yields 20260916

Fed Decision: Two Sides of a Dangerous Coin

by with No Comment AssetsBehavioral SentimentCentral BanksCommoditiesEconomyEquitiesFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexIndiaInvestingRisk ManagementSpeculatorsUncategorizedWorld

The Fed Should Not Raise Rates But It Will

What and who you believe will play an important part in today’s market for speculators. While investors who are looking at long-term prisms can comfortably wait on the decision from the Fed’s FOMC regarding interest rates later today, retail traders who are trying to profit on near-term wagers via momentum and are seeking to gain an advantage by knowing which way the wind is blowing have a difficult task ahead. Via results in the Forex market it appears many financial institutions have braced already for an interest rate hike of a quarter basis point.

However, what if the financial institutions and many analysts are wrong? What if Fed Chair Kevin Warsh and other FOMC voting members believe the White House and think that inflation will erode as price pressures ease when there is a remedy to the Iranian conflict. That would mean that they could debate with other Fed officials for no interest rate hike. Because if the Fed were to raise interest rates later today, thus making borrowing costlier for businesses and consumers – and potentially putting more strain on the U.S debt payments because of increasing Treasury yields, it would still not solve the higher costs of energy. (There is an argument below which negates this possible yield problem and one that is likely to be heard from some economists).

10Y Treasury Yields 20260916

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

Yes, there is demand for fuel globally, but the demand for energy is not going to decrease because the U.S Federal Reserve may raise interest rates. In fact, it could make costs more expensive for businesses who are likely burning money via increased credit lines already created, this to transact their currently higher costs to guarantee effective supply of fuel to fund their logistics and manufacturing which they had not planned for while making their initial 2026 budget estimates prior to the Iranian war. In other words, a higher Federal Funds Rate will equate into higher costs for businesses.

$100.00+ WTI Crude Oil is Not A Friend

Per the other side of the coin, WTI Crude Oil has turned more expensive and volatile since March of this year. For a moment it looked like relief would be delivered via the supposed MoU between Iran and the U.S. WTI Crude Oil went below $80.00 periodically when optimism was peaked by White House rhetoric and calm waters in the Hormuz Strait were reported. Hopes for a return to WTI Crude Oil below $70.00 were viewed as legitimate.

However, the tranquility sought has vanished in the past couple of weeks and has grown more anxious as Saudi Arabia has become an important actor in the Middle East conflict as the Houthis and Iraqi militias cause havoc for the Saudi Arabian government. The price of WTI Crude Oil is now stubbornly above $100.00 and rumors about how Saudi Arabia is dealing with its own military confrontation and the way it is able to supply its own Crude Oil are confounding.

Which brings us back to the initial question regarding the Federal Reserve and Kevin Warsh, who will the Fed Chair listen to? Does he and other voting members of the FOMC believe there will be a quick fix to what has become stubbornly higher costs for WTI Crude Oil which is creating inflation? Or do they now have to objectively consider what may have been perceived as a temporary blip of elevated expenditures for the U.S economy as a potentially long-term problem? If Warsh and his cohorts believe the Iranian situation is going to find a remedy within the next four to five months, they should NOT raise interest rates today.

Again, while higher fuels costs are problematic, raising interest rates is not going to lower demand for WTI Crude Oil which is the chief instigator of higher inflation globally. It is not a question of who believes President Trump’s tantrums, it is a question concerning viability of a real end game to the Iranian situation. Plenty of Crude Oil exists, its production capabilities are strong, it is Middle East supply to Asia, Europe and Africa that is causing a problem and the higher cash and futures pricing for WTI Crude Oil. Thus, the lynchpin remains Iran. If their government capitulates and bends a knee, opening up the Hormuz Strait and stops plying its influence on the Houthis of Yemen and other militia groups in Iraq that are now causing problems for Saudi Arabia the price of WTI Crude Oil will drop dramatically.

If the situation is not rectified and the price of WTI Crude Oil remains elevated and Saudi Arabia doesn’t handle their confrontation which is turning increasingly militaristic, then it will not solve a higher interest rate initiative from the U.S Federal Reserve – unless the Fed is merely looking to decrease Treasury yields by increasing global demand for the bonds – thus hoping to increase their desirability.

Old School vs. New School 

Today’s decision from the Fed comes down to old text books and failed central bank policies versus new economic considerations. An interest rate hike from the Fed may actually make circumstance more difficult for governments around the world trying to balance their own books. 

For instance, higher yields on U.S debt are causing problems in India where some investors are shedding Indian Rupee assets and seeking the high yielding U.S Treasuries not only because of a ‘guaranteed’ bond yield, but the fact that their assets are stored in USD which is likely going to remain stronger than the INR over the next few years if a historical track record is looked upon. This is a saga that will play out in other emerging market nations too as financial institutions chase ‘secure’ profits.

5 is a Dangerous Number

So not only does the Fed face a problem regarding an interest rate hike that will not solve inflation problems caused by a war that is effecting prices because there is a fear of supply logistics, but there could be a knock-on effect regarding debt. U.S 10-Y Treasury yields near and above 5% is a clear warning side that investors are uncomfortable, this no mere speculative gain achieved by bond vigilantes. 

Another point, if the Fed were to raise interest rates today, it could in theory cause greater demand for U.S Treasuries from abroad and thus lower the Treasury yields for the moment – thus making the argument for a higher interest rate more dignified for those who want to raise rates. However, if the Fed were to say no to interest rate increases for now and point to a belief the U.S conflict with Iran is going to conclude sooner rather than later and said the U.S economy faces distress because of the higher fuels costs alone, this could also solve confidence problems.

U.S debt stands above 40 USD trillion, lower yields are a desire, but lower borrowing costs for businesses and consumers are wanted too. So what will the Fed do today………..drumroll please…………the Fed will raise interest rates – making a mistake. And will show it fears a long-term risk scenario between Iran and the U.S and problems for Saudi Arabia. The USD will see plenty of volatility. Confidence will not be shown by the Federal Reserve today and this will be problematic.

Stage presence from Fed Chair Kevin Warsh is going to be extremely important today. He has failed in his previous two FOMC Press Conferences to look confident while speaking and answering questions. His speech at Jackson Hole in late August also proved lackluster.

And this is where is gets more dangerous for Warsh and the U.S White House, because of President Trump’s ability to change his tactics quickly – there is a lack of confidence among investors who are trying to gauge their outlooks for the mid-term and beyond.

Kevin Warsh will find it difficult to pull a rabbit out of a hat. Many folks will walk away disgruntled if an interest rate is introduced and no clear guideline is mentioned regarding what is next regarding other potential rate hikes – or a plan to actually lower the Federal Funds Rate. The U.S economy while strong could easily be sent into a recession with an interest rate hike and sustained higher WTI Crude Oil costs. 

Behavioral sentiment is going to remain on a toxic tightrope unless confidence is delivered. While individual perceptions about what should be done are important, understanding the mindset of the U.S Federal Reserve is crucial. Eliminating our own personal beliefs and bias from trading decisions and acting on what realities may be demonstrated are vital to profit. 

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WTI CrudeOila 20260902

Bad Timing for President Trump May Equal Good Trading Opportunities

by with No Comment AMT MarketsAssetsBehavioral SentimentBusinessEconomyEquitiesExclusive ContentFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexInvestingRisk ManagementRobert PetrucciSpeculatorsUncategorizedWorld

You Don't Have to be a Buyer in the Current Marketplace in Order to Profit

There are moments when the markets are calm and then there are these times. It is beginning to look like increasingly bad timing for President Trump and his administration’s hope to keep WTI Crude Oil prices in check and silence the chatter about inflation. 

Instead of a de-escalation based on tranquil conditions in the Middle East, investors were smacked in the face again last night. However, while this may be a bad time to be an investor unless they are looking for value plays, traders may actually have more opportunities in the current market circumstances as long as they manage their risks appropriately.

WTI Crude Oil jumped higher last night and while the commodity has outdone itself since late February regarding price velocity, last night’s performance likely felt volatile even for experienced large players who have solid intel on the ground regarding Middle East shipping and supplies. The energy sector has been more akin to the soft commodities regarding reversals the past handful of months, Coffee, Cocoa and Crude Oil have offered colorful price ranges. But that is not how WTI Crude Oil is supposed to work.

WTI CrudeOila 20260902

WTI Crude Oil 1 Year Chart as of 2 September 2026

Inflation concerns will not go away quietly as long as WTI Crude Oil remains highly valued. Fed Chairman Kevin Warsh may in fact be putting on a show for the public – that he is his own man and can express his concerns regarding inflation no matter what President Trump thinks – when in fact he may simply be laying a framework to work in tandem with Treasury Secretary Scott Bessent and lower interest rates in order to create less pressure on Treasury yields. However, this planned (or conspiratorial) thinking may be hard to actually produce in reality on the 16th of September when the Fed’s FOMC has to show its cards once again. As long as WTI Crude Oil remains above $90.00, “Houston we have a problem,” murmurs may be heard loud and clear.

If Treasury yields remain tilted upwards because investors are refusing to buy them at cheaper rates, it will start to infect the Nasdaq 100, S&P 500 and the Dow 30 more and create cautionary skirmishes which may produce deeper downsides in stock markets.

Iran wouldn’t want to cause President Trump problems, correct? Why would Iran want higher Crude Oil prices to ensnarl President Trump into a morass of political battles in the U.S and make life difficult for the Republicans during the mid-term elections? Does the IRGC have folks who understand the dynamics of U.S politics? Yes they do and it is a 100% certainty they would like to be a pain in President’s Trump’s aspirations.

We are left to deal with the ever-changing events that seem to be quite good at repeating themselves. Financial institutions are not only nervous about their mid-term outlooks, they are wary about the near-term too. Forex, commodities, bond yields, Wall Street and other global stock markets will struggle to make solid gains until clarity develops.

What will clarity look like? It will be optimistic banter in which rhetoric from different mouths and geographies is actually believed by the adoring crowds. Results do not have to be good, but outcomes need to be able to be forecasted and planned, allowing investors to seek their cash preservation and fortunes in a variety of assets (and show their overseers that they used adequate risk management in case things go wrong). 

Gold has done well recently, although it seems to have hit some resistance lately. However, if inflation tranquility is not achieved and if President Trump’s circumstances grow more dire, the precious metal will continue to offer speculative plays upwards. 

Investors are restless. Making 6 to 8% profits a year looks rather boring after plenty of solid years of upwards traction. Folks aren’t used to powerful financial storms and they forget about lingering troubled periods in which simple profits can prove comforting as broad markets struggle. 

Day trading is dangerous. However, those with solid risk taking tactics and those who aren’t married to the notion that markets only go up, but are willing to bet that markets (assets of many classes) can go lower too – now have an opportunity to test their technical perspectives and understanding of behavioral sentiment. 

Realistic targets using take profits and making sure stop loss protection still allows for a trade to move until goals are met is important when volatility is ripping price realms to shreds. Forex instability appears to be increasing as USD centric attitudes remain convoluted. Does Fed Chair Kevin Warsh have enough power to fight against an interest rate hike on the 16th of September, will the price of WTI Crude Oil cooperate, will President Trump’s wishful thinking about Iran come true? Results may not match what is wanted by the guardians of the marketplace. Contrarians may see the current market and global political situation as a time to seek value and help inflate markets, but they might be spitting into the wind. 

Maybe the AI concerns about infrastructure costs and corporate cash needs are baseless. Perhaps the deficit being created by the U.S and many other nations is simply idle chatter by risk analysts who are too nervous. Maybe there is a secret pill for all of us to become optimistic about all things.

It is a good time for traders to remain realistic and target exaggerated price movements in assets that offer opportunities in distressed offerings. You do not have to buy the marketplace to profit ladies and gentlemen.

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30Y Treausry Yields 20260826

How Warsh Can Solve the US Debt Crisis With Just a Few Words at Jackson Hole!

by with No Comment AssetsBehavioral SentimentCentral BanksCharles NajjarCorporateEconomyEquitiesExclusive ContentFeatured HighlightsFinancial InstitutionsForexInvestingRisk ManagementUncategorized

A Roadmap for Fed Chairman Kevin Warsh to Rescue U.S Debt

Many think the market decides interest rates.

Wrong!

The Fed – and only the Fed – has full control over interest rates, all over the curve!

We just need to have the right person on board.

During the European crisis in 2011, speculators all around the world were betting that the Eurozone would explode and that the EUR would collapse under the weight of government debt that had started with Greece and spread to other countries that were shamelessly labelled “PIGS,” adding insult to the speculative attack.

Trichet, at that time chair of the ECB, seemed totally clueless, afraid to take any “unconventional” step, even at the risk of seeing the entire European financial system go bust.

The crisis seemed unstoppable… until Mario Draghi stepped in, replacing Trichet.

With just one magical statement (“the ECB will do whatever it takes to save the Euro. And believe me, it will be enough”) Draghi implied that he was ready to buy government bonds from European countries, even though such action was considered at the time to be “against the ECB’s statutes” and outside its mandate.

By going against the prevailing market narrative, and knowing very well the economic strength of the Eurozone, Draghi forced the market to follow him.

The speculation against the Eurozone stopped almost instantly, and European government bond prices recovered without the ECB even being forced to intervene!

30Y Treausry Yields 20260826

U.S 30-Year Treasury Yields Chart From 1988 until 26 August 2026

Today, the U.S is in exactly the same position!

A massive speculative attack is being waged against U.S debt (probably led in part by the crypto industry in an attempt to justify the “value” of its virtual tokens), with “inflation” suddenly becoming the ultimate beast.

Like Trichet at the time, the weak Powell got driven into the trap of raising rates abruptly on his own government, forcing it to pay more than $1 trillion in yearly interest, a massive and unnecessary injection of liquidity that is itself… inflationary!

In today’s world, driven by massive debt, raising interest rates on governments is INFLATIONARY!

Now that Powell is almost gone, all hopes lie on Warsh’s shoulders.

He can save the U.S from the current debt crisis with just a few words, exactly as Draghi did for Europe.

Warsh completely missed his first intervention a month ago. Instead of showing the market who’s boss, he showed total febrility.

Fearing being labelled a “Trump puppet,” he insisted on the 2% inflation target – an absurd threshold that nobody really knows where it came from – and claimed that “the economy is robust”… while we all know it is not!

Then he totally capitulated to the market by saying that he would “listen to the market” to determine where rates should go. The worst thing any Governor could ever say!

That’s how long-term yields exploded to levels not seen since 2007, and forcing Bessent to intervene to limit the damage.

We are now just one day away from the Jackson Hole Symposium.

Warsh can now either save the U.S or send it into Armageddon!

Every word he says could change the entire picture.

He simply has to focus on the right narrative:

  • Current inflation is geopolitical and driven by supply shocks. Raising interest rates has zero impact on such inflation.
  • The 2% inflation target is NOT an absolute figure. A 3% inflation rate should be acceptable when the economy is at risk.
  • Signs of recession are looming, with the labor market under pressure, rising bankruptcies, and record rates of defaults on credit cards and car loans.
  • Forcing the government to inject more than $1 trillion through interest payments is itself inflationary. Raising interest rates to fight inflation is counterproductive at such a high level of government debt.

If Warsh is capable of highlighting these arguments, yields will drop instantly without any intervention from Bessent.

Then the Fed can start decreasing interest rates gradually, with the market accepting whatever rate it sets.

What if Warsh deliberately gave a disastrous speech a month ago, taking a tough position against what Trump appointed him to do and allowing the market to drive rates to extreme levels… only to radically change his position following the recommendations of the task force he appointed?

This way, he would have absolved himself from being labelled Trump’s puppet while executing exactly the plan of reducing interest rates.

We can therefore suspect that he will take the opportunity at Jackson Hole to present the first findings of this task force, which could include, among other things:

  • A questioning of the 2% inflation threshold, especially when the economy is at risk of entering a deep recession.
  • Stressing that inflation comes mainly from geopolitical issues and supply shock. Fighting such inflation with high interest rates is totally inefficient.
  • A highlight of the absurdity of raising interest rates on the U.S government and forcing it to inject $1 trillion in interest payments – an unnecessary injection of liquidity that is itself inflationary.
  • The necessity of coordinating with the Treasury Department to fight inflation where it hurts the most, through subsidies, tax relief, and other targeted measures, while primarily fighting “greedflation” through higher profit taxes on specific industries.
  • A warning about the increasing risk of recession, with record numbers of corporate bankruptcies, credit-card defaults, and a deteriorating job market.

Warsh has a unique chance to prove that he is the right person for the job by rescuing the U.S from the massive speculation against its debt, exactly like “Super Mario” did when he saved Europe from collapse in 2012.

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New Zealand Dollar 20260825a

NZD/USD: Elevated Value for Kiwi Coming Within Sight of Mid-Term Prices

by with No Comment Behavioral SentimentCentral BanksCommoditiesEconomyFeatured HighlightsForexRisk ManagementSpeculatorsUncategorized

The NZD/USD is around 0.59550, last Friday’s highs near 0.59885 vicinity flirted with mid-term highs

The NZD/USD remains a speculative currency pair that offers fast results and velocity. The relatively low liquidity of the NZD/USD compared to the upper tier of major currency pairs allows for sudden bursts of movements which experienced traders may find tempting and inexperienced retail folks wagering could find exhausting and costly. The NZD/USD ranks typically around 7th per the size of its volume in Forex. Ahead of it at number six is the AUD/USD.

New Zealand’s growth rate of near 1.5% has been holding steady for the past half year. On the 8th of July the Reserve Bank of New Zealand raised its Official Cash Rate by 0.25% and the next decision from the RBNZ is next week on the 2nd of September. Because of inflation concerns some analysts believe another quarter of a basis point will be added. The current price of WTI Crude Oil is over $85.00, but it needs to be noted that New Zealand imports refined petroleum product most of which comes from Asia – like South Korea and Singapore. The current rate of inflation in New Zealand is around 4.1%.

New Zealand Dollar 20260825a

NZD/USD One Year Chart as of 25 August 2026

What will the RBNZ Do Next Wednesday

The Reserve Bank of New Zealand like other global central banks has a dilemma because of the sticky higher costs of energy due to the Iran and U.S conflict. The situation in the Middle East is unlikely to be resolved in the coming month. The conservative led New Zealand government would likely prefer not having to raise the Official Cash Rate, but the central bank may feel like it has no other choice. The U.S Jackson Hole Symposium led by the Federal Reserve starts this Thursday and a key speech will be delivered by Fed Chair Kevin Warsh this Friday, New Zealand officials will be a participant.

If the Official Cash Rate is raised in New Zealand by 0.25% to 2.75% it may supply the NZD/USD some additional reasons for greater Kiwi strength. However, what should concern day traders is the suspicion that part of the interest rate hike has already been baked into the value of the currency pair. Psychological support for the NZD/USD is easy to see at the 0.59500 mark for near-term traders. Those looking for upside may want to use slight moves lower to wager on potential reversals that they believe could ignite upwards if they are conservative.

Near-Term Wagers on the NZD/USD and Risk Management

The NZD/USD is a favorite for many Forex traders because of its volatility and often its ability to produce rather intriguing trends. The currency pair has seen upwards value since last Wednesday and has shown an ability to sustain it elevated status while correlating to the broad Forex market. On Wednesday the 29th of July the NZD/USD was near the 0.57650 ratio. The currency pair was flirting with 0.60000 rather consistently in February before the Iran and U.S conflict escalated into military action. 

Day traders tempted to look for additional upside in the NZD/USD cannot be faulted. If Fed Chairman Kevin Warsh somehow sounds dovish regarding U.S interest rates this coming Friday and talks about a strong U.S economy, and the RBNZ were to raise the Official Cash Rate next Wednesday this could bolster the value of the New Zealand Dollar. Risk management for retail traders is essential because sentiment shifts within the current higher terrain of the NZD/USD could attract more bullish perspectives that also include USD centric weakness, but if a sudden headwind blows – velocity in another direction could create volatility downwards if those leaning into a stronger NZD/USD were to become concerned about their outlooks and abandon ship.

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10Y Treasury Yields 20260728

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

by with No Comment Behavioral SentimentCentral BanksCommoditiesEconomyEquitiesFeatured HighlightsFederal Reserve, Interest RatesForexInvestingRisk ManagementUncategorized

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.

10Y Treasury Yields 20260728

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 20260728

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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Alphabet 20260724

The Not So Coincidental World of Google and WTI Crude Oil

by with No Comment AssetsBehavioral SentimentBusinessCommoditiesEconomyEquitiesExclusive ContentFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsInvestingMajor Global Equity IndicesRisk ManagementRobert PetrucciSpeculatorsUncategorizedWorld

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 20260724

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 20260726

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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SIngapore Dollar 20260717

Thoughts on the USD/SGD, Cautious Broad Market Sentiment and the Weekend

by with No Comment Artificial IntelligenceBehavioral SentimentEquitiesExclusive ContentFeatured HighlightsFinancial InstitutionsForexInvestingMajor Global Equity IndicesRisk ManagementRobert PetrucciSpeculatorsUncategorized

USD/SGD: Currently a Hope and Prayers Barometer in Global Forex

The USD/SGD is near the 1.29110 vicinity as of this writing. Financial institutions apparently have combined their cautious outlooks in the broad Forex market as USD centric strength continues to leak into sentiment, while their instincts technically demonstrate that over the mid-term currencies like the Singapore Dollar should be stronger and the USD/SGD is supposed to show some bearish activity.

For dramatic purposes let’s call this current phase of Forex trading including the USD/SGD as the hope and prayers act. The Singapore Dollar has sustained highs, but it has traversed lower over the past few weeks. On the 24th of June the USD/SGD was near the 1.29940 ratio. Let’s be clear, for small speculative Forex traders broad market wagering on USD direction remains dangerous.

SIngapore Dollar 20260717

USD/SGD Six Month Chart as of 17th July 2026

Fed Chairman Keven Warsh and His Desire to Introduce New Data

During the recent testimony of Fed Chairman Kevin Warsh in Washington D.C he made it clear he is keen on introducing AI tools into interpretations regarding Federal Reserve policy. However, he also said that AI will not be relied upon alone. From a coding perspective, Warsh essentially said proactive data will become part of the Fed’s thinking with proper supervision: some of you may want to call this a stack developer’s job.

At the same time while refusing to tip his cards regarding his stance on interest rates too much, Forex markets responded by selling the USD in incremental bouts. Intraday trading flared in its usual manner, but started show a core belief that Warsh is demonstrating dovish sentiment regarding interest rates.

USD/SGD as a Forex Barometer and Near-Term Behavioral Sentiment

The USD/SGD serves as a solid barometer of the Forex market. It offers perspectives on Asian sentiment, but also shows how global financial institutions are leaning. The escalation of firepower in the Middle East the past week and into today has caused reactions in the USD/SGD, but somewhat politely.

Having been able to trade below the 1.29000 mark on Tuesday and Thursday of this week, the currency pair is trading near values seen on the 8th of June and 18th. A lack of clarity remains a theme in Forex. The USD/SGD is the 10th biggest Forex pair via transactional averaged volume, so traders should give it attention even if they do not pursue.

Wall Street Remains Nervous and the Tense Weekend to Come

Going into this weekend Forex traders have created downside pressure on the EUR/USD and GBP/USD. The USD/JPY remains stubbornly above the 162.300 ratio. Nervous selling on the Nasdaq 100 via futures trading has been seen today and it looks as if Wall Street will be in for another bumpy ride. The wishful thinking drama in the financial markets is being confronted by the reality of a potentially loud weekend of military conflict between Iran and the U.S, and a seemingly unconvinced marketplace that doesn’t want to demonstrate risk appetite.

WTI Crude Oil prices via futures trading are above $80.00. Having been able to sustain values above the 1.29100 mark in the USD/SGD signals that bearish mid-term perspectives still need additional impetus to create more selling, but this doesn’t appear a wise speculative bet going into the weekend.

A cautious stance over the coming hours should be anticipated as folks wonder what the coming weekend will bring. At least there is the World Cup championship on Sunday (New York time) to take our minds off of concerns. However, Monday will not react to the trophy being raised, but to behavioral sentiment that will takes its cue via today’s finish on Wall Street and noise generated via the Strait of Hormuz this weekend.

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10Y US Treasury Yield 20260716

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

by with No Comment AssetsBehavioral SentimentCentral BanksCharles NajjarEconomyExclusive ContentFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexInvestingRisk ManagementUncategorized

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.
10Y US Treasury Yield 20260716

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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WTI Crude Oil 20260701

What Am I Missing About USD Centric Strength?

by with No Comment Behavioral SentimentCentral BanksEconomyEquitiesFeatured HighlightsForexInvestingRisk AnalysisSpeculatorsUncategorized

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 17th 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 17th of June. And on the 3rd 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 20260701

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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US Cash Index 20260617

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

by with No Comment AssetsBehavioral SentimentCentral BanksCommoditiesEconomyEquitiesExclusive ContentFeatured HighlightsForexInvestingMajor Global Equity IndicesRisk ManagementRobert PetrucciSpeculatorsUncategorized

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.

US Cash Index 20260617

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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Indian Rupee 20260611

India Insider: Should the RBI Raise Interest Rates?

by with No Comment AssetsBehavioral SentimentBen EzraCentral BanksExclusive ContentFeatured HighlightsForexIndiaRisk ManagementUncategorizedWorld

A Case for Higher Interest Rates In India

As the Rupee remains under pressure and oil prices continue to rise amid tensions in the Middle East, the debate has shifted towards what the Reserve Bank of India (RBI) should do next.

Economist Janak Raj has argued that raising interest rates to defend the Rupee comes with significant costs. Higher rates increase the cost of capital for businesses, reduce investment activity, and compress equity valuations. In theory, this could even accelerate foreign outflows from equities rather than attract fresh capital. Yet the RBI may soon find itself with limited options.

Indian Rupee 20260611

USD/INR One Year Chart as of 11th of June 2026

Foreign Portfolio Investors (FPIs) were net buyers of Indian equities for most of the period between 2004 and 2024, with only a few exceptions such as 2011, 2018 and 2022. However, the trend has changed. FPIs sold approximately $19 billion USD worth of Indian equities in 2025 and another $24 billion USD so far in 2026.

Question: Why are Foreign Investors Selling

One reason is that global investors today have alternatives. The growth of Artificial Intelligence related companies in the United States has created significant investment opportunities. At the same time, U.S Treasury yields hovering around 4.6% offer attractive risk-free returns in a strengthening dollar environment.

For many global investors, earning high returns in Dollar assets is preferable to taking exposure in emerging markets that face current account pressures from rising  Crude Oil prices and other energy costs.

Taxation is another factor. India taxes foreign investors at 20% on short-term capital gains and 12.5% on long-term gains. Meanwhile, competing financial centres such as Singapore, Hong Kong, Malaysia and Thailand generally do not tax foreign investors’ capital gains.

Some global funds have argued that India should move closer to international norms, where capital gains are usually taxed in the investor’s home jurisdiction rather than the country where the investment is made. Higher post-tax returns would undoubtedly make Indian assets more attractive.

A stable Rupee would also reduce hedging costs, lower currency-risk premiums and improve the overall risk-reward profile for overseas investors. However, tax cuts alone cannot solve India’s problem.

The Real Issue is Balance of Payments

As Business Line columnist Lokeshwari Mam has pointed out, a significant portion of equity outflows consists of short-term speculative capital. Long-term capital tends to remain invested. This is why the decline in net Foreign Direct Investment (FDI) should concern policymakers more than short-term fluctuations in portfolio flows.

Net FDI has fallen sharply from $28 billion in FY 2022-23 to just $7.7 billion in the year ended March 2026. This is a worrying trend because FDI is the most stable source of external financing. Unlike portfolio flows, it creates factories, jobs, exports and long-term productive capacity.

India therefore needs more than tax incentives. A genuine single window clearance system, reduced bureaucracy, easier business regulations and reforms in manufacturing remain essential. Attracting long-term capital should be a national priority.

The recent foreign buying of Indian bonds after tax cuts is encouraging. But relative to India’s current account financing requirements, it remains a small drop in the ocean.

For example, in FY 2025, the current account deficit was 0.6% of GDP. And in Q4, the current account became a surplus. Is it really that difficult to finance it’s small current account deficit?

India’s external vulnerability is determined not merely by a current account deficit, but by whether the capital account can be comfortably financed. A modest current account deficit still creates currency pressure if foreign capital inflows weaken (which we are seeing), while a larger deficit may be sustainable when capital inflows remain strong. The risk of sustained higher oil prices could widen the deficit, increasing India’s dependence on foreign capital at a time when global liquidity is tightening and U.S Treasury yields are rising.

Furthermore, hedging costs continue to erode much of the yield advantage that Indian bonds offer over U.S Treasuries. In that sense, active global money is likely to prefer Dollar assets over emerging-market debt or equities

India’s repo rate currently stands at 5.25%. The RBI’s decision to raise its inflation forecast to 5.1%, while lowering its GDP growth projection to 6.6% reveals where the shock from the Iran conflict is likely to be felt via higher inflation and weaker growth. For an economy that remains heavily dependent on imported oil, a depreciating Rupee only compounds the problem by increasing the cost of energy imports. 

In such an environment, the Monetary Policy Committee is unlikely to focus solely on growth. Currency stability, inflation expectations and the availability of foreign capital to finance India’s external requirements could become increasingly important considerations. If these pressures persist, the RBI should raise the repo rate, in the same manner other Asian central banks have done in recent weeks.

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Nasdaq 100 20260608

Nasdaq 100: Terrible Friday Being Confronted by Manic Monday

by with No Comment AMT MarketsAssetsBehavioral SentimentBusinessEquitiesFeatured HighlightsFederal Reserve, Interest RatesFinancial InstitutionsForexMajor Global Equity IndicesRisk ManagementSpeculatorsUncategorizedWorld

Fear of the Middle East Not the Main Motivator for the Nasdaq 100

After Friday’s selling surge and a fall of -4.77% with a close of 28,957.60, the Nasdaq 100 futures trading this morning has actually seen an increase and is near the 29,479.00 mark as of this writing before the cash Nasdaq 100 market opens.

Friday’s selling nightmare for traders who found themselves stubbornly locked into what were to be short-term buying positions and saw the Nasdaq 100 plummet -4.77%, probably woke this morning believing ugly conditions may not stop. An escalation in military action via proclaimed retaliatory moves between Israel and Iran started today’s trading with a high degree of more anxiousness. USD centric strength in Forex was demonstrated early.

Nasdaq 100 20260608

Nasdaq 100 Futures Value 1 Month Chart as of the 8th of June 2026

However, in the past couple of hours calmer heads have prevailed among financial institutions and USD centric buying in the broad Forex market has run out of steam – at least momentarily. For instance the USD/JPY is near 159.927 currently, opposed to earlier highs seen this morning which challenged the 160.400 vicinity. What does this have to do with the Nasdaq 100 and its current status? 

It appears via futures trading that large players may also have taken a sedative and looked at the index as having been oversold on Friday. The Nasdaq 100 has actually gained early today and signs that a de-escalation of military force between Israel and Iran is being reported. However, that still leaves day traders wondering what will happen as the cash market opens soon and volumes increase.

Let’s Say Quiet Prevails the Remainder of the Day

Not because of a utopian outlook, but a geopolitical perspective, let’s try to image Iran’s stated intentions of no more retaliatory strikes being launched towards Israel as true. The past couple of hours have been more tranquil as a signal in case you are wondering. Then investors and financial institutions will have to digest the Middle East concerns as they have done over the past couple of months in U.S equities, and decide to operate again on the Nasdaq 100 with near and mid-term outlooks.

Friday’s huge selling was blamed by some on the likelihood of a ‘potential’ U.S Federal Reserve interest rate taking place on the 17th of June. This because better than expected jobs numbers showed to some that the U.S economy was running hot once again. 

Additionally expressed fears, which are legitimate, about higher energy costs sparking sticky inflation have been discussed and worried about aloud. Yet, again let’s decide to say even if U.S inflation numbers via the Consumer Price Index come in higher than expected this Wednesday via the coming CPI data, that doesn’t shut the door on the possibility the new Fed Chair Kevin Warsh won’t fight against an interest rate hike during the FOMC meeting next week. In other words it still seems rather unlikely – to me – that the new Federal Reserve Chairman is going to want to initiate higher interest rates the first month on the job. So what if there was another reason for the steep selling on the Nasdaq 100?

Not Paradise but Purgatory

The Nasdaq 100 actually has other questions which have been raised as possible fodder for its large selling this past Friday. Was it spawned because of profit taking by those who took advantage of the index’s fabulous rise knowing that many institutions had been front running the IPO of SpaceX which is scheduled to happen on the 12th of June – this Friday? 

Did large players who rode the wave of frontrunning by financial institutions up in the Nasdaq 100 since late March, decide to cash in profits. There is plenty of nervousness surrounding what will take place with SpaceX in the coming months and long-term via outlooks because of its rather inflated valuation which looks like it will be around 1.7+ Trillion plus at share values of $135.00 per share this coming Friday. 

Questions surrounding SpaceX’s price per sales rhetoric, this instead of price per earnings (because SpaceX is not making a net profit) is just one example. While denying Elon Musk’s genius and ability to create clamor for his companies has proven to be a losing proposition for many, doubters still remain. 

Folks might have cashed out winnings on Friday and decided to now wait on the sidelines to see where behavioral sentiment takes the Nasdaq 100. After two full months of paradise for the Nasdaq 100, a few days of purgatory and seeing which direction U.S indices go may be the right decision by folks who rely on clarity; this as the Middle East gets untangled (or becomes more complicated), the Federal Reserve offers insights on the 17th of June, and large financial institutions lead the way regarding investment decisions.

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