One tension underpinning today's Fed meeting: risky assets have been rallying on the idea that the Fed will keep rates steady, even in the face of sticky inflation. This has effectively eased credit conditions & diminished the Fed's inflation fight.

Citi's Andrew Hollenhorst says the Fed should hike today if its truly data dependent. "Not hiking today would be inconsistent with guidance that policy decisions will be made meeting-by-meeting and contingent on (recently stronger than expected) data."

Debt traders are increasingly pricing in a scenario where the Fed basically remains on hold for the foreseeable future. Futures trading now implies less than a 10% chance of a rate hike today.

Growth in global oil demand is set to "slow almost to a halt in the coming years:" IEA. “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade.”

What caused US pandemic-era inflation? Ben Bernanke and Olivier Blanchard lay out how it started with supply-side constraints and has now shifted to labor-market tightness, which is having “a more significant role in pushing up prices.”

The real opportunity in US equities was late last year or early this year: ex-GS partner Abby Joseph Cohen. "As I take a look at things now, I say equity valuations are not as appealing to me."

Wells Fargo CFO: Credit card spending is up about 10% in April and May, and the card business is going really well. He was speaking at a Morgan Stanley conference today

"Long tech stocks" is seen as the most crowded trade, and most investors want to stick with it anyway: BofA fund manager survey

Britain’s labor market tightened in April, with wages spiking and unemployment unexpectedly falling. UK 2-year yields rose the highest since 2008.

US new-lease asking rents rose just under 2% over the 12 months ending in May, down from the double-digit increases of a year ago and the largest deceleration over any year in recent history: CoStar Group, RealPage data

US household savings are still elevated, despite all the spending sprees of the past few years, via ⁦@SoberLook⁩

“If you’re wondering what a price-wage spiral looks like, I think you are looking at it:" PGIM's Tipp. “There is a breadth of growth out there. That is the threat to the fixed income market.” via @markets

Bonds: "Hey stock optimists, you're doomed."

BofA's Subramanian: "The bear market is officially over." Morgan Stanley's Wilson: "“More are declaring the bear market officially over; we respectfully disagree due to our 2023 earnings forecast.”

“FOMO is a very powerful force. If you missed the rally, you sort of feel obligated to” put aside your qualms about risk and get into the market: Tallbacken’s Purves

U.S. regional bank stocks have rallied for four straight weeks.

Ed Yardeni calls for a potential MAMU, or "Mother of All Meltups,” led by the craze around the promise of AI but that extends to a broader swath of stocks.

Credit tightening in the real estate space is significant, at least based on this: Here's a developer backed by Bill Ackman who tried (and failed) to get financing from 48 different lenders.

In a world of deep uncertainty, where no one has an edge on the timing of recession, Saba's Weinstein says, “Closed-end fund arbitrage is the thing I’m most interested in today because it is tangible. It’s an arbitrage that you can collapse yourself.”

The euro area shrank by 0.1% between January and March, adding to a fourth-quarter decline of the same magnitude and resulting in the first six-month contraction since the pandemic.

“This may be the first time in three or four years, back to probably 2019, that the Fed is not driving investment decisions. They’re still important. But they’re a little bit out of the way. They’re taking a back seat:” ⁦@TFMkts⁩

U.S. regulators are planning to boost capital requirements at bigger banks by roughly 20%: sources

Traders have built up a big bet against the S&P, marking their most bearish positioning since 2007. They're also betting on a rally in the tech-heavy Nasdaq, with net bullish wagers approaching the highest levels since late 2022: CFTC, @bespokeinvest

The May payrolls report was important and suggests the Fed is going to have to raise rates again, or at the very least keep them above 5% for a much longer period of time than many expect: Former Fed Governor Randy Kroszner

In May, "the Nasdaq outperformed the Dow by 9.29 percentage points which ranks as the 9th widest margin of outperformance for the Nasdaq relative to the Dow in history:" @bespokeinvest