• War and stagflation setting in

• The Fed will not be helping with the stagnation part

• There are still problems in private credit

• Flows are as confusing as ever

• Are Earnings too concentrated?

• Just when it looked like inflation was cooling (we did not think it was)

• Quick Hits

• Where did all the crypto money go?

• Chart Crime of the week

• This guy wants his value meal

As the war drags on, stagflation fears are becoming more tangible.  We are also starting to see hints of higher inflation in the data before the outbreak of the war.  Jerome Powell and the Federal Reserve acknowledged as much today.  The rate-setting committee (FOMC) left the target range for the Fed Funds interest rate (the rate at which banks lend to each other in the overnight market) unchanged at 3.50% to 3.75%.  Powell acknowledged that the current monetary policy was “modestly restrictive,” but the Fed needs to wait and see if the price effects from last year’s tariffs fade away as most expect.  Of course, Powell was reluctant to comment on any expected impact from the war, but it was obvious that he and the committee are still more concerned about inflation than any wobbling in the Labor market.  He made this clear when he emphasized the relative stability in the Unemployment Rate while dismissing the abysmal rate of job creation (lower immigration being the offsetting factor).   Of course, everyone knew that Powell was not going to cut rates or even sound remotely dovish (leaning towards rate cuts).  The real impact of today’s press conference was Powell defiantly saying he was going to stay on as a Fed Governor until the investigation into him was resolved.  With the nomination of Kevin Warsh for the next Fed Chair still being held up in the senate, Powell will also continue to lead the Fed (and the separately elected head of the FOMC).  And as we have been saying, the last thing Powell wants to do is cut interest rates and be seen as caving in to Trump.  The market puts the chances of a rate cut in December as a coin flip.  A month ago, it was coin flip to have three rate cuts by then.