Markets are bifurcated: tech/semiconductors (AI demand) continue to lead equities higher, while oil/energy and FX reflect normalization from the Iran truce and Fed hawkish repricing. The dollar is strengthening against everything except tech, pressuring Asian FX (yen, won). Oil volatility has collapsed as Gulf supply is expected to flood the market.

Leant Ting argues Asian equity strength is driven by persistent capex in hardware/AI: big fundraising plans (e.g., SpaceX), institutional research suggesting a chip supercycle, and company-level commentary pointing to rising demand for chip equipment and upward EPS revisions. Currency dynamics (yen weakness) are explained by BOJ-US interest rate differentials, limiting the effectiveness of one-off FX intervention without BOJ policy change. Upcoming MSCI index reviews pose flow risks/opportunities for regional markets.

George Gatch says public markets are not dead, with tremendous enthusiasm around technology, space, and AI. He warns about concentration risk in US markets (top 10 S&P names = 40% of market, US = 60% of global). He recommends rebalancing into fixed income (yields at 4.4-6% with half the duration) and international/emerging markets. He sees opportunity in private credit given disruption in wealth management funds, and is building private credit capabilities within public market teams.

Bob Michele, CIO at J.P. Morgan Asset Management, discusses the hawkish surprise from new Fed Chair Warsh, who shifted to nine officials expecting a rate hike and raised inflation forecasts. Michele criticizes rolling back transparency, expects more volatility, but notes the bond market has already repriced into a 4.25%-4.625% trading range. He sees every meeting as live, inflation peaking in May, and corporate credit as attractive.

Mark Cudmore analyzes the Fed's first meeting under Kevin Warsh as unexpectedly hawkish, with the dot plot showing rate hikes this year and next. Warsh's repeated emphasis on inflation (ignoring employment) signals a return to old-school Fed communication without explicit forward guidance, which Cudmore welcomes for creating more market opportunities. The hawkish stance gives cover for other central banks but may not be followed elsewhere due to different economic conditions.

Mumbi Gatimu analyzes El Niño's effects on African agriculture: drier weather threatens cocoa in West Africa (flowering stress) and cotton yields, while wetter conditions in East Africa risk coffee quality and harvests. Crop impacts will be felt gradually—farmers first, then manufacturers, consumers later. Markets have started pricing risk but may not fully reflect it yet.

Bob Michael says the Fed's hawkish tilt is a real shot across the bow; half the committee expects rate hikes this year, making a hike possible given inflationary pressures from AI spending and the Iran war.

Bloomberg reports US concern that China may have obtained an ASML EUV chip machine, which would undermine Western export controls and threaten US tech dominance in AI. Neil Campling notes ASML denies shipments, China remains 5 years behind, and TSMC/Samsung still lead, but the risk to the global AI balance is significant.

A Bloomberg Money Minute report covers three main stories: 1) Stocks rise as crude oil futures fall on optimism over a US-Iran deal, which could ease inflation risks by allowing stranded oil out of the Strait of Hormuz. 2) Intel shares surge after President Trump announces a partnership with Apple for domestic semiconductor design and production. 3) Amazon will sell dye-free M&Ms in August, with production challenges due to using spirulina as a blue substitute.

Bob interprets the FOMC statement and dot plot as a clear hawkish surprise. Half the committee expects rate hikes this year, which is a 'shot across the bow' to markets. He sees the Fed chair's dismissal of the dot plot as a 'slap across the face' and believes the Fed is preparing markets for rate hikes, not cuts.

Torsten Slok discusses the Fed's hawkish dot plot (9 of 18 dots signaling a hike this year) and the dramatic drop in oil prices from $120 to below $80 in two months, which has significant disinflationary implications. He argues this justifies Kevin Warsh's reluctance to give forward guidance, as conditions change rapidly. On AI and labor, he sees a net positive effect on employment and productivity over the next 18 months, as cheaper technology enables record new business formations that outweigh displacement risks.

Wayne sees the US-Iran nuclear talks as a positive initial sign, but expects rough negotiations over the next 60 days with a high chance of extension. He believes both sides have incentive to open the Strait of Hormuz for oil stock replenishment, which could lower geopolitical risk premium on oil. However, Israel and Gulf states will push back on any enrichment, creating uncertainty.

Kelsey Berro (JPMorgan AM) analyzes the Fed's hawkish hold and press conference. Key takeaway: the bond market's reaction (front-end yields up, long-end down) signals the Fed retains inflation-fighting credibility. She sees a potential peak in inflation (May) and a moderating labor market, reducing the need for further hikes. She recommends investing in fixed income for carry at current 5-6% yields, viewing the range as a sweet spot for demand, without needing to predict direction.

Bloomberg News Now reports President Trump signed an MOU with Iran to reopen the Strait of Hormuz, causing oil to slump over 5% and equities to rally (S&P +2%, Nasdaq +3%, Russell +1.3%). The deal is fragile, faces Israeli opposition, and requires 60-day technical talks. Bloomberg's Oliver Crook notes European involvement in sanctions and potential de-mining missions. Markets reacted positively but cautiously.

The Iran war and Strait of Hormuz closure have imposed a 'war tax' on Asia, causing demand destruction, food stress, and structural shifts. Wealthy nations drain stockpiles while poorer Asian countries face inflation, fuel subsidies, and potential food crises. The conflict has accelerated deglobalization and stockpiling, with lasting consequences for supply chains and prices.

Ed Yardeni interprets Kevin Warsh's first FOMC statement as a hawkish surprise, emphasizing price stability and a 2% commitment. He argues the Fed has shifted to a tightening bias, sees bond yields as normalized at 4.5%, and believes modest rate hikes would not derail the resilient economy or the 'Roaring Twenties' equity narrative.

Stuart Paul was surprised by the dovish FOMC statement (focus on supply-side factors) but notes the dot plot was very hawkish. He believes Warsh focused entirely on price stability, not the dual mandate. He argues that removing forward guidance is appropriate when risks are two-sided, and that the Fed is not worried about losing control of the narrative. He sees AI productivity gains as overstated.

McKee reports that Kevin Warsh's first press conference was hawkish on inflation, signaling growing support for rate hikes. Warsh established credibility by adopting a stance that inflation is broadening beyond energy, especially in services. Markets were surprised by the hawkish tilt. Warsh announced five task forces, which is not unprecedented but notable for its scope and timing at the start of his chairmanship.

The Iran MoU reduces immediate tail risk but leaves a persistent risk premium on barrels transiting the Strait of Hormuz. Markets and supply chains have adjusted incrementally, supporting earnings and equities. Geopolitical chaos tends to spur government spending (fiscal stimulus), which supports growth and corporate profitability and exerts upward pressure on yields and energy prices.

Guest expects Fed Chair Warsh to surprise with a less hawkish tone than priced, which would lower front-end yields and soften the dollar, temporarily supporting risk assets. However, long-end yields may stay sticky or drift higher. The Iran MOU signing on Friday is not fully priced; if signed, it adds supply pressure (bearish oil) and a small stock boost; failure is a risk asset disaster. Overall, momentum is slightly positive for stocks but risk/reward is terrible due to valuations and the Iran deal terms.

Isa Aoshi discusses the rotation from tech to cyclicals driven by the oil price collapse. He sees more upside in tech, particularly in AI data center supply chains shifting to lower-cost solutions like ASICs. Japan's factory automation sector is recovering. On China, he likes the semiconductor supply chain due to localization push. The BOJ should keep hiking as it's normalization, not inflation getting out of hand.

Edward Yardeni argues the bull market is driven by 'FEMO' (Fabulous Earnings Momentum), not speculative FOMO. He sees the economy as resilient due to retiring baby boomers spending $89 trillion in assets, large fiscal deficits, and a productive AI capex boom. He reaffirms his S&P 500 target of 8,250 by end of 2025 and 10,000 by 2029, calling it a 'Roaring 2020s' scenario.

The Fed held rates steady but half of participants expect a hike next year. Crude oil inventories at Cushing fell to the lowest since 2014, supporting oil prices. The Trump administration canceled offshore wind leases and redirected funds to natural gas and geothermal. A potential exemption for healthy and infant formula items from the 'ultra-processed' food definition could benefit certain food producers.

Bob Michele expects the Fed to hold rates and remove the easing bias. He sees the economy in good shape, not an environment for rate cuts. He believes Warsh will disappoint the president by not cutting, and that the market would be equally surprised by a hawkish or dovish tilt. He views the bond market as having already repriced and sees it in good shape.

Luke Gromen discusses a potential Fed playbook of cutting short rates, selling long bonds, and deregulating banks to steepen the curve and absorb Treasury supply, effectively QE-through-banks. He sees gold/oil ratio suggesting failure of non-dollar oil war, expects eventual inflationary boom, and advises watching weaker dollar, higher stocks, lower 10y yields, higher gold and Bitcoin as confirmation. He believes stocks will rise in dollar terms but fall in gold terms over time.

Bloomberg strategist David Finnerty discusses the rotation from tech to cyclical stocks, the upcoming Fed meeting under Kevin Warsh, and the impact of the Iran-US MOU on oil and markets. He expects the Fed to be divided, with potential for more volatility if forward guidance is reduced. He sees the dollar under near-term pressure if the Fed signals a hold, but US growth may support it. BOJ likely to hike again this year. China data shows weak consumption but resilient exports.

The Iran interim deal is a 60-day window with significant implementation risk. The devil is in the details, and the last Iran deal took two years to negotiate. Iran may have come out in a stronger position. The White House is defending the deal as a win, but there is deep skepticism from allies and domestic hawks.

Alister Bull analyzes the Fed's hawkish shift under Kevin Warsh, noting the removal of forward guidance and the dot plot signaling a rate hike by October. He highlights the Fed's focus on price stability and the potential for tighter policy, which surprised markets and led to a sell-off in equities and a jump in short-dated yields.

Under new Chair Warsh, the Fed held rates at 3.5-3.75% but the dot plot shifted hawkishly: median 2025 dot moved to 3.75%, nine members see at least one hike this year, and PCE inflation forecasts were revised sharply higher to 3.6% (from 2.7%). The statement was shortened, removed balance-of-risks language, and cited Middle East conflict and energy supply shocks as inflation drivers. Growth was revised down, unemployment up slightly.

The closure of the Strait of Hormuz has imposed a war tax on energy and petrochemicals, hitting poorer Asian nations hardest via demand destruction, depleted reserves, and food stress. Even if the Strait reopens, the structural shift toward building stockpiles and supply independence will keep inflation elevated globally. AI-driven chip demand from Asia remains strong, but helium shortages threaten production. The US dollar strength and rising rates compound fiscal strain on emerging markets.