Daily Commentary

MarketMinder’s View: The central point of this article hits the nail on the head, but we do have some quibbles worth noting here. To start with what we think is sensible, this piece correctly notes that pushback against new Fed Chair Kevin Warsh’s plans to review and alter the central bank’s approach to “forward guidance” on where rates are heading and how it communicates—as well as other factors like rate policy and the balance sheet—are pluses. After all, as the piece notes, the Fed hasn’t hit its inflation target in five years and has rather bumbled along at times from a regulatory perspective to boot. (We would add that their forecasting is nothing of the sort and amounts mostly to recency bias writ large.) Change can be uncomfortable for insiders and pundits. Now, we do take issue with the notion that “the markets” are misreading Warsh. The evidence for this is allegedly an uptick in long-term Treasury yields following last week’s meeting. We think that stretches credulity, considering the uptick was all of a whopping 0.14 percentage point—and it has partially reversed already. Reading narratives in chop like that is a process error filled with overconfidence, because no one knows what causes minor, day-by-day gyrations. It could be anything or nothing. Moreover, we think the idea that the Fed has acted as a shock absorber and that “forward guidance artificially suppressed market volatility” is nonsense, considering the about-faces and failure to act on prior guidance stoked volatility more than any talk alleviated it. See 2022, bonds and stocks, with questions. But on the central point—we agree. Warsh’s plans may ruffle some feathers, but actual review of the Fed’s approach is a plus, not a minus. For more, see our 8/3/2026 commentary, “Digging Into Last Week’s Fed ‘Credibility’ Concerns.”

MarketMinder’s View: This piece dives into politics, so please keep in mind that MarketMinder favors no party nor any politician, weighing developments solely for their potential market effects. We covered this legislation in a commentary here recently—noting that granting the White House (regardless of who the president is) more unilateral authority to enact tariffs, in this case on countries importing Russian energy, doubles down on a risk factor for markets. Today it passed the Senate in an 86 – 11 vote and now heads to the House. Look, as we argued earlier, we don’t see this as much of a factor for stocks in the here and now—President Donald Trump has already employed existing unilateral authority on tariffs multiple times in the past two years, and markets are well aware of that script, muting their power. But tariffs are always negatives, paid for by the imposing nation’s businesses and consumers, chiefly, and they can inject uncertainty even when lifted. Ceding this and future presidents more authority to enact or delete them swiftly seems like doubling down on a potential source of future negative surprise.

MarketMinder’s View: We aren’t aware of anyone who said finding workarounds for the Strait of Hormuz was easy. But it isn’t impossible, especially if the potential profit incentive motivates firms to act. See how certain Gulf nations have adapted to moving crude oil. “The UAE has also been using its own, smaller pipeline to Fujairah on its eastern coast to bypass Hormuz. Before the outbreak of war, the pipeline was transporting 1.1 million barrels per day, leaving at least a third of its capacity unused, according to the IEA. In June, exports from Fujairah’s terminals, which also draw on a nearby storage complex, climbed to nearly double that level, according to ship tracking data. A new line is scheduled to be completed by early next year, which would increase Abu Dhabi’s transit capacity to roughly four million barrels per day. … The Saudi and UAE bypass routes have already played significant roles in keeping markets well supplied and preventing even sharper increases in oil prices. Their investments could reduce oil flows through Hormuz to less than half of pre-war levels by 2030, according to Eurasia Group.” The article goes on to cover an array of other means by which producers are looking to mitigate Hormuz—a sensible look at markets adapting. Producers have applied this adaptability to moving several different commodities and is a major (and overlooked) reason why the global economy isn’t short on energy products. For more, see last week’s commentary, “Don’t Fret the EU’s Low Summertime Gas Storage Levels.”