Daily Macro US
May CPI YoY
4.2%
In-line, +3 positions closed
Fed Rate (current)
3.50–3.75%
Held 8-4 Apr 29
CME Hike Odds
72%
vs Polymarket 55%
S&P 500
~7,383
-2.6% post-NFP
WTI Crude
~$92
Consolidating $91-93
10Y Treasury
4.53%
Spiked post-NFP
CPI day + two new positions entered. May CPI printed 4.2% YoY / 0.5% MoM — all three thresholds resolved in our favour: +$208.61 realized, bringing total P&L to +$257.14. We immediately redeployed that capital: pos-010 (Fed rate hike 2026 YES at 55¢, $200) and pos-011 (Fed rate end 2026 = 4.0% YES at 34¢, $25). The thesis: CME FedWatch prices 72% probability of at least one 2026 hike; Polymarket lags at 55%. Current Fed rate is 3.50–3.75% (held 8-4 at April FOMC). One 25bp hike resolves both positions YES. ECB decision tomorrow (Jun 11) at 91%. FOMC Jun 16-17 is a hold, but H2 hike signal is the trade.
Today's Market Moves
pos-006/007/008 CLOSED
40%→0%-40pp
All three CPI positions resolved NO on Jun 10. Combined realized P&L: +$208.61. Total realized P&L all-time: +$257.14.
pos-010 ENTERED
0%→55%+55pp
NEW: Fed rate hike in 2026 YES at 55c. $200 stake. CME FedWatch 72% vs Polymarket 55% = 17pp gap. Deployed realized P&L. Confidence 8.
pos-011 ENTERED
0%→34%+34pp
NEW: Fed rate end 2026 = 4.0% YES at 34c. $25 stake. Current upper bound 3.75% — one hike resolves YES. Modal post-hike outcome. Confidence 7.
US Recession 2026
22%→18%-4pp
Drifted to 18% since our Jun 5 entry. S&P selloff is rate-fear not growth-fear. GDPNow Q2 4.3%. Pos-009 performing well.
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | Fed Rate Hike 2026 | Dec 2026 | 55% | 72% | +17pp | BUY YES | $$1.5M | 8/10 |
| 2 | Fed Rate End 2026 = 4.0% | Dec 2026 | 34% | 42% | +8pp | BUY YES | $$6.5M | 7/10 |
| 3 | US Unemp >=5.0% | Dec 2026 | 22% | 12% | -10pp | SELL YES | $$450K | 8/10 |
| 4 | US Recession 2026 | Jan 2027 | 18% | 10% | -8pp | SELL YES | $$1.5M | 8/10 |
| 5 | Inflation >4.5% | Dec 2026 | 36% | 30% | -6pp | SELL YES | $$1M+ | 7/10 |
| 6 | June CPI MoM >0.5% | Jul 15 | 45% | 58% | +13pp | BUY YES | $$25K | 7/10 |
| 7 | Fed Rate <3.0% | Dec 2026 | 8% | 1% | -7pp | NEUTRAL | $$1M | 9/10 |
| 8 | US Unemp >=5.5% | Dec 2026 | 18% | 6% | -12pp | SELL YES | $$300K | 7/10 |
| 9 | US Unemp >=6.0% | Dec 2026 | 10% | 4% | -6pp | NEUTRAL | $$1M | 8/10 |
| 10 | Inflation >5% | Dec 2026 | 24% | 10% | -14pp | SELL YES | $$400K | 7/10 |
Market vs Fundamentals
Market Price (red) vs Estimated Fair Value (green) — %
Top 5 Opportunities
1
Fed Rate Hike in 2026 — YES
↑ BUY YES+17pp
Market price
55%
Fair value
72%
Gap: +17pp
The core new position. CME FedWatch — backed by fed funds futures traders — prices 72% for at least one 25bp hike in 2026. Polymarket lags at 55%. Current Fed rate is 3.50–3.75% (held 8-4 at April 29 FOMC with growing hawkish dissent). May CPI 4.2%, NFP +172K, GDPNow Q2 4.3% — the economy is hot enough to absorb a hike. Entered YES at 55¢ — $200 stake (pos-010).
▵ Bull case
- CME FedWatch 72% for at least one 2026 hike
- May CPI 4.2% YoY — well above 2% target
- April FOMC 8-4 dissent — hawkish bloc growing
- Warsh at Fed Chair = inflation-fighter mandate
▿ Bear case
- May CPI 4.2% is energy-driven — transient argument
- S&P -2.6% signals financial conditions tightening without Fed action
- FOMC could wait for June CPI (Jul 14) before committing
2
Fed Rate End 2026 = 4.0% — YES
↑ BUY YES+8pp
Market price
34%
Fair value
42%
Gap: +8pp
The companion position to pos-010. Current Fed upper bound is 3.75%. One 25bp hike resolves this YES at 4.0%. Modal post-hike outcome: market prices 34% for 4.0%, 29% for 3.75% (no change), ~15% for 4.25% (two hikes). With 72% hike probability, the single-hike scenario (~40%+) is significantly underpriced at 34%. Entered YES at 34¢ — $25 stake (pos-011).
▵ Bull case
- One 25bp hike from 3.75% upper bound = exactly 4.0%
- Modal outcome if one-and-done hike scenario
- Market at 34% well below implied 40%+ probability
▿ Bear case
- Two hikes possible (4.25% wins instead)
- No hike at all (3.75% wins)
- Correlated risk with pos-010
3
US Unemployment >= 5.0% — NO
↓ SELL YES-10pp
Market price
22%
Fair value
12%
Gap: -10pp
NFP +172K, U/E 4.3% for second month. A hiking Fed signals labour market strength — historically hikes happen when unemployment is stable and low. No deterioration signal. Gap -10pp. Holding NO (pos-004).
▵ Bull case
- Rate hike could slow hiring H2
- WTI $92 = real wage headwind
▿ Bear case
- NFP +172K doubled consensus
- U/E 4.3% rock-solid
- GDPNow Q2 4.3%
4
US Recession 2026 — NO
↓ SELL YES-8pp
Market price
18%
Fair value
10%
Gap: -8pp
Already in at 72¢ NO (28% YES entry). Market dropped to 18% YES — pos-009 is in profit. A hiking Fed is historically anti-recessionary. GDPNow Q2 4.3%. Holding.
▵ Bull case
- Rate hike cycle could overshoot
- WTI $92 consumer headwind
▿ Bear case
- NFP +172K
- GDPNow Q2 4.3%
- S&P decline is repricing not crash
5
Inflation 2026 > 4.5% — NO
↓ SELL YES-6pp
Market price
36%
Fair value
30%
Gap: -6pp
May CPI 4.2% means annual average >4.5% requires Jun-Dec to average ~5.1%+ YoY. June data will capture the Iran oil spike but even at 4.8-5.0% for June, the math is very demanding. A Fed hike would actually help bring inflation down. Gap tight — holding pos-001, no new entry.
▵ Bull case
- June CPI captures Iran energy spike
- 72% hike odds = market already pricing more inflation
▿ Bear case
- Annual avg requires 5.1%+ for rest of year
- Fed hike = inflation headwind
- May at consensus 4.2%