Daily Macro US
S&P 500
7,420
-1.21% sell-off on hawkish dot plot
10Y Treasury
4.46%
-2.4bp post-presser
Fed Hike Poly (pos-010)
~37%
+4pp recovery from 33% low
Dot Plot
9 of 18 hike dots
6 project multiple hikes — median 3.8%
Easing Bias
DROPPED
Neutral stance confirmed
WTI Crude
~$80
Iran deal supply pricing
Warsh verdict: hawkish shock. Fed held at 3.50-3.75% as expected, but the dot plot delivered: 9 of 18 FOMC members projected a 2026 rate hike, 6 projected multiple hikes. Median dot 3.8% (was 3.4% in March). Easing bias formally dropped. Warsh did not submit his own dot — citing his long-held skepticism about forward guidance — but let the committee's hawks speak. That's 9 votes for at least one hike, with no counter-force from the Chair. Market reaction was swift and brutal: S&P -1.21% to 7,420.10, Nasdaq -1.34% to 26,021.66, Dow -507 points. Tech across the board sold off (MSFT, META, GOOGL, AMZN all lower). Equities processed rate risk faster than prediction markets. Polymarket Fed hike 2026 moved only modestly to ~37% — a massive arbitrage gap to CME FedWatch's ~66%. This divergence is the trade. 9 of 18 = institutional majority hawkish. Polymarket will need to catch up. For pos-010: June 17 is the thesis validation moment. June 18 and beyond is the re-pricing. June NFP July 2 and June CPI July 14 are next catalysts.
Today's Market Moves
Fed Rate Hike 2026 (pos-010)
33%→37%+4pp
THESIS VALIDATED: 9 of 18 FOMC members' dots show 2026 hike — 6 want multiple. Median 3.8%. Easing bias dropped. Warsh abstained but hawks dominate the dot plot. CME FedWatch ~66%. Polymarket lagging at ~37% — massive 29pp gap to CME. Equities sold off but Poly hasn't caught up yet. This is the buy signal. HOLD. NFP Jul 2, CPI Jul 14 are next catalysts.
Fed Rate End 2026 = 4.0% (pos-011)
18%→21%+3pp
RECOVERING: Slight bounce with pos-010. If hike materializes, 4.0% remains modal. $25 stake. Hold through June CPI.
Strait of Hormuz Jul 31 (pos-012)
68%→72%+4pp
IMPROVING: Signing ceremony June 19 in 2 days. WTI $80 confirms supply return pricing. On track. Target 85c resolution.
Zero Fed Cuts 2026 (pos-013)
80%→84%+4pp
ACCELERATING: 9 hike dots + easing bias gone + median 3.8% = zero cuts absolutely near-certain. Dot plot removes last projected cut entirely. Pos-013 approaching resolution YES. HOLD.
US Recession 2026 (pos-009)
12%→11%-1pp
HOLD: Market sold off on hawkish dots but recession risk unchanged. Iran deal = consumer tailwind. Gap closing to FV of ~8%. Consider exit if touches 10%.
Screening Table
| # | Market | Expiry | Market Price | Fair Value | Gap (pp) | Direction | Volume | Confidence |
|---|---|---|---|---|---|---|---|---|
| 1 | Fed Rate Hike 2026 | Dec 2026 | 37% | 52% | +15pp | HOLD YES | $$1.5M | 6/10 |
| 2 | Strait of Hormuz Jul 31 | Jul 31 | 72% | 87% | +15pp | HOLD YES | $$5M | 8/10 |
| 3 | Zero Fed Cuts 2026 | Dec 31 | 84% | 92% | +8pp | HOLD YES | $$34M | 8/10 |
| 4 | Fed Rate End 2026 = 4.0% | Dec 2026 | 21% | 30% | +9pp | HOLD YES | $$6.6M | 6/10 |
| 5 | US Recession 2026 | Jan 2027 | 11% | 8% | -3pp | HOLD — consider exit at 10% | $$1.5M | 8/10 |
| 6 | Inflation > 4.5% | Dec 2026 | 20% | 11% | -9pp | SELL YES | $$1M+ | 8/10 |
| 7 | US Unemp >=5.0% | Dec 2026 | 22% | 11% | -11pp | SELL YES | $$450K | 8/10 |
| 8 | US Unemp >=5.5% | Dec 2026 | 17% | 5% | -12pp | SELL YES | $$300K | 8/10 |
| 9 | Fed Rate <3.0% | Dec 2026 | 6% | 1% | -5pp | NEUTRAL | $$1M | 9/10 |
| 10 | Inflation >5% | Dec 2026 | 15% | 5% | -10pp | SELL YES | $$400K | 8/10 |
Market vs Fundamentals
Market Price (red) vs Estimated Fair Value (green) — %
Top 5 Opportunities
1
Fed Rate Hike in 2026 — YES
↑ BUY YES+15pp
Market price
37%
Fair value
52%
Gap: +15pp
9 of 18 FOMC members' dots project 2026 hike — the most hawkish dot plot since tightening began. Six project multiple hikes. Median dot 3.8% (was 3.4%). Easing bias dropped. Warsh abstained (power move) — doesn't want to personally commit, but lets the committee's hawks signal freely. CME FedWatch re-priced to ~66%. But Polymarket only moved to ~37% — a 29pp gap to CME. Equities sold off -1.21% (rate-sensitive names led down) while Poly is slow. When Poly catches up, this is a 37→60+¢ move. Entry at 55¢, currently ~37¢ — still underwater but thesis just got its strongest institutional validation. HOLD through June NFP (Jul 2) and CPI (Jul 14).
▵ Bull case
- 9 of 18 FOMC members' dots project 2026 hike — institutional majority
- 6 of those 9 project MULTIPLE hikes — committee even more hawkish
- CME FedWatch at ~66% — Polymarket at 37% = massive arbitrage gap
- Easing bias formally dropped — policy neutral, no longer accommodative
- Core CPI 4.2% — services/shelter/wages unaffected by oil deflation
▿ Bear case
- Warsh didn't commit — could stay vague through year-end
- Energy deflation (WTI $80) may filter to core by Q3
- Still -18pp from entry — needs significant recovery
2
Strait of Hormuz Normal by Jul 31 — YES
↑ BUY YES+15pp
Market price
72%
Fair value
87%
Gap: +15pp
pos-012 at 72c, entered at 57c — +15c profit. Formal signing June 19 in Switzerland starts the 30-day reopening clock. July 31 gives 12-day buffer. WTI at $80 shows the market is already pricing Strait supply normalization. Holding to resolution.
▵ Bull case
- June 19 signing in 2 days
- WTI $80 = market pricing supply return
- 30-day commitment with US enforcement backstop
▿ Bear case
- IRGC compliance ambiguity
- Nuclear talks could stall post-signing
3
Zero Fed Rate Cuts in 2026 — YES
↑ BUY YES+8pp
Market price
84%
Fair value
92%
Gap: +8pp
pos-013 at 84c, entered at 77c — +7c profit. Warsh's presser made this near-certain: easing bias dropped, dot plot removes last projected cut, 3 members show hike dots. Core CPI 4.2% — zero basis for cutting. Holding to resolution Dec 31.
▵ Bull case
- Easing bias dropped = no cut language
- 3 hike dots = committee hawkish
- Core CPI 4.2%
▿ Bear case
- Rapid oil-driven disinflation could theoretically open cut window in Dec
4
Fed Rate End 2026 = 4.0% — YES
↑ BUY YES+9pp
Market price
21%
Fair value
30%
Gap: +9pp
Slight bounce to 21c. If hike occurs, 4.0% (3.75% + 25bp) remains modal. $25 stake. Same June CPI catalyst as pos-010. Holding.
▵ Bull case
- One hike = 4.0%
- 3 hawk dots = realistic scenario
▿ Bear case
- Overall hike probability still compressed at 37%
5
US Recession 2026 — NO
↓ SELL YES-3pp
Market price
11%
Fair value
8%
Gap: -3pp
pos-009 at ~11% YES (entered at 28% YES, held NO). Hawkish dot plot = no recession needed if Warsh hikes rather than overtightening accidentally. Iran deal = consumer relief from energy. GDPNow Q2 solid. Gap narrowing to FV ~8%. Consider exit if market touches 10% YES.
▵ Bull case
- Warsh neutral = no overshoot
- Iran deal = consumer relief
- GDPNow Q2 4.3%
▿ Bear case
- Gap closing — limited further upside