SPEAKER_01 0:00

Today we're diving into um a pretty bizarre market paradox. The Federal Reserve is like 97% guaranteed to do absolutely nothing with interest rates today.

SPEAKER_00 0:09

Right. It's basically a lock.

SPEAKER_01 0:11

Yeah. But the entire financial world is holding its breath. So we're pulling our answers today directly from the June 17, 2026 pre-market futures briefing.

SPEAKER_00 0:22

Which is put together by Eli Levy over at Canon Trading Company.

SPEAKER_01 0:24

Exactly. And if you want the raw data yourself, you can actually reach him directly at Eli at Canon Trading.com. But uh to unpack why this non-event is causing so much tension, we have to look under the surface.

SPEAKER_00 0:36

We do.

SPEAKER_01 0:36

But before we dig into that, I do need to read this exactly as provided. Disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

SPEAKER_00 1:10

Okay, so getting back to that tension. Right. What investors are actually sweating over is the dot plot. It's a literal chart where each Fed official places a dot to show where they expect interest rates to be in the coming years.

SPEAKER_01 1:28

And right now they're super divided on that, right?

SPEAKER_00 1:30

Oh, completely. They are sharply divided on whether we'll see any cuts at all for the rest of 2026. The median projection is sitting at uh 3.4%.

SPEAKER_01 1:37

Aaron Powell Wait, so if they aren't trading the present, they're basically placing bets on like an argument about the future. How does that actually move money today?

SPEAKER_00 1:46

Aaron Powell Because it dictates the treasury curve. You know the short-term and long-term borrowing costs for basically everyone.

SPEAKER_01 1:52

Oh, from corporations all the way down to your mortgage.

SPEAKER_00 1:54

Exactly. If the dots show officials leaning hawkish, meaning they want to keep rates high to fight inflation, the front end of that curve reprices instantly. Borrowing gets more expensive.

SPEAKER_01 2:06

Aaron Powell Okay, so the Fed has everyone on edge. But uh if you look at your portfolio right now, the US dollar index is suddenly dropping.

SPEAKER_00 2:14

Yeah, which is interesting.

SPEAKER_01 2:16

Right. Because if rates are staying high, shouldn't the dollar be strong? That feels totally counterintuitive.

SPEAKER_00 2:21

Normally, yes, it would be. But the dollar is also driven by safe haven demand. You know, investors parking cash there when the world feels dangerous.

SPEAKER_01 2:29

Ah. And right now we have a massive geopolitical shift happening.

SPEAKER_00 2:32

Exactly. It's draining that fear away. The U.S. Iran framework is restoring transit through the Strait of Hormuz.

SPEAKER_01 2:39

Aaron Powell Right. They're heading for that signing ceremony in Switzerland. It's like um uncorking a massive bottleneck for global transit.

SPEAKER_00 2:48

Yeah, that's a perfect way to look at it.

SPEAKER_01 2:49

Like opening an express lane on a clogged highway. You don't just get more oil tankers through, but the toll price the premium buyers were paying out of fear just completely collapses.

SPEAKER_00 2:58

Aaron Powell Spot on. And we're seeing that fallout right now. WTI crude has been sliding for a fifth straight session because of this.

SPEAKER_01 3:05

Wow.

SPEAKER_00 3:05

Yeah. It's hitting early March lows, around uh $75 a barrel. As Iranian exports clear the strait, the fear premium vanishes from oil and the safety premium vanishes from the dollar.

SPEAKER_01 3:18

Aaron Powell That definitely explains why energy stocks might be dragging today. But wait, what about gold? Because it's parked near a record $4,336 and it's just completely paralyzed.

SPEAKER_00 3:27

Aaron Powell Well, gold pays no yield, so it's hypersensitive to the Fed. It's essentially trapped waiting for that dot plot we talked about.

SPEAKER_01 3:35

Aaron Powell So if today's dot plot leans dovish, signaling they'll cut rates soon, gold looks more attractive.

SPEAKER_00 3:41

Aaron Powell Right, it could really run. But if they're hawkish, expect a sharp liquidation.

SPEAKER_01 3:46

Got it. So the dollar and gold are entirely at the mercy of global politics and central banks. But you know, what if I told you there's a market right now completely ignoring Washington and the Middle East?

SPEAKER_00 3:58

Aaron Powell You've got to be talking about the agricultural markets.

SPEAKER_01 4:01

Yes. This is where we pivot from macro forces to like incredibly strict micro drivers. Trevor Burrus, Jr.

SPEAKER_00 4:08

Yeah, grains and softs, things like coffee, cocoa, sugar. They're being pushed by something as simple as rain.

SPEAKER_01 4:14

Aaron Powell, which is wild to think about. So a guy staring at a weather radar in the Midwest has a better edge today than a macroeconomist.

SPEAKER_00 4:22

Aaron Powell Literally, yes. We're seeing perfectly benign U.S. weather pushing corn and soybeans down to multi-month lows.

SPEAKER_01 4:28

Aaron Powell But then Brazil is the exact opposite story, right? What is actually happening with coffee?

SPEAKER_00 4:33

Persistent rain in Brazil is delaying their harvest. Now it's just a delay. It's not a destroyed crop.

SPEAKER_01 4:38

Right.

SPEAKER_00 4:38

But because copy roasters still need beans right now to keep the factories running, that delay creates a sudden scramble for whatever physical inventory is actually left.

SPEAKER_01 4:47

Oh wow. And that scramble is what's squeezing the near-term July contract. It's spiked over five percent.

SPEAKER_00 4:53

Exactly. It's purely localized supply and demand.

SPEAKER_01 4:56

It really is an incredible snapshot of how the market's nervous system works. You know, you have a paralyzed Fed dictating borrowing costs, an open transit route sinking oil, and then a local rainstorm squeezing global coffee prices.

SPEAKER_00 5:09

It's a hugely interconnected tape.

SPEAKER_01 5:11

It really is. So as you watch Kevin Warsh's first dot plot today, we want to leave you with a final provocative thought. Consider how the upcoming Bank of England and Bank of Japan rate decisions will ripple against this newly set US curve.

SPEAKER_00 5:24

Yeah, the market might exhale today, but those international decisions are looming.

SPEAKER_01 5:29

All right, we have to wrap it up with this. Disclaimer Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.