The Institutional Risk Analyst

As expected, the Federal Open Market Committee took no action on interest rates in a 10-2 vote. Warsh gave a rambling statement at the Fed’s October 28 press conference and announced that the FOMC would hold fewer policy related meetings in 2027 and 2028. Warsh is apparently making the same mistake as Paul Volker in 1980, delaying actions to fight inflation to serve the political needs of the White House.

Although Warsh has the power to make unilateral changes at the Fed, he eschews the arbitrary approach so often taken by President Donald Trump and is instead seeking consensus – for now. Warsh has not directed Fed governors to reduce their public appearances, for example, even though by law Fed governors ought to focus their public statements on the consensus reached at the FOMC’s last vote.

The UWMC stock bounced on Friday to $1.40 vs $1 a week before, but can the markets move to the key threshold of $2 given the limited disclosure and some inconsistencies that we discuss below? The contrarian in us thinks that there may be more upside in UWMC that many realize, as we discuss below, but remember that this is a non-bank mortgage issuer that is in the process of making significant operational changes.

Oil prices surged to a five-month high as the US and Israel consider more strikes against Iran after the midterm elections. U.S. retail diesel fuel prices have jumped significantly since June 2026, rising from an average of roughly $5.06 to $5.35 per gallon in early-to-mid June to $6.276 per gallon by October, according to the U.S. Energy Information Administration (EIA). Grocery prices are up about 2% in the past 12 months, but restaurant prices are up twice that amount.

To get a sense for the kind of price volatility you can expect to see from Treasury 10s, take a look at the response to the earnings release this week from AGNC. The REIT reported a sizable decline in book value, which resulted from rising interest rates and an inadequate hedge. The stock slid down to a 52-week low of $8.40 before triggering buying from income oriented investors. AGNC’s tangible net book value dropped by 16.9% (or $1.45 per share) down to $7.13 per share from

The good news of sorts is that the deflation of the AI financing bubble will probably see a continued decline in LT interest rates. If you work in banking or residential mortgages, the deflation of the AI bubble is very good news. For the past six months, LT interest rates have been pushed higher by the surge in financing for AI-build outs, both public and private, and also the interest rate hedging that finance providers have put in place to protect them from adverse market

This week, President Donald Trump repeated his promise to give adult U.S. citizens a $5,000 cash "dividend" during a campaign event on October 12, 2026, reiterating that the payout is contingent upon Republicans maintaining control of the House and Senate in the midterm elections.

UWMC must completely focus any partial redemption efforts on cleaning up Oaktree's senior Series A-1 shares first before it can touch junior tiers of preferred capital. Shareholders widely expect UWMC to sweep its core free cash flow exclusively toward these preferred redemptions in the coming years to remove Oaktree's high-coupon burden, but the available cash flow may not even be sufficient to cover the dividend. That is, Oaktree owns UWMC.

Bernie poses as being from the outside, like the quote unquote "socialists," yet all have a hard time really going against the Democratic establishment. Once they win, they want to pal back with DC, that’s why Bernie Sanders is just a ridiculous figure. He's one of the most ridiculous figures in American politics, which is saying something these days.

How long will the wave of energy inflation coming towards the industrial nations last? Will this unanticipated surge inflation event cause consumers, companies and even nations to default? Below we ponder some asset allocation themes for subscribers to the Premium Service of The Institutional Risk Analyst as we prepare for our quarterly call on Thursday after the market close.

So bitcoin is paid for two things: disorder, and inclusion. It is not paid for order that excludes it. That is a very different claim from the ones usually made for and against bitcoin. Its supporters say it wins because governments fail. Its critics say it loses because governments prevail. Both miss the most likely case, in which governments prevail and choose gold.

When we consider the track of interest rates during the term of President Donald Trump, it is hard to make the case that the Powell FOMC was not giving the White House everything they wanted and more. Now, however, the US central bank seems to be headed for a policy stance that is closer to neutral than accommodative.

If you look at the abysmal poll numbers for President Donald Trump in terms of his handling of the economy, you can seen why all banks and particularly the consumer lenders are trading so weakly at present. Most of the banks in this group and, indeed, the whole WGA Bank 50 group have reported excellent earnings, but it does not matter. Mr. Market is focused on year-end 2026 and 2027, one reason why we think the FOMC will be cutting the target for federal funds by Spring.

Iran has not been defeated. We have to admit that. We have to admit, oh, actually, they've done very well. And it has to be admitted by people in authority. So those people in authority can then negotiate with their Gulf counterparts, including the Saudis. That’s how this thing gets fixed. Now, doing this before the October 27 Israeli election is going to be difficult to impossible, and also before the U.S. midterms, which means that before the U.S. midterms, things are going

Coming out of Q2 2026 earnings, JPMorgan (JPM) was the leader in all respects, toping $5 trillion in assets and generating net income that has pushed the bank over 1.5% return on assets (ROA). Following JPM was PNC Financial (PNC) and USB, both of which are showing solid growth in terms of asset returns and stock prices. But the fact is that the top seven banks are going nowhere in terms of the equity market, as shown in the chart below.

We received a number of comments on our discussion with David Kotok last week (“David Kotok: China, the Dollar and Bretton Woods 2.0”), but one of the most interesting observations came from veteran Bahamas-based gold fund manager Henry Smyth, who we interviewed last May (“Interview: Henry Smyth on the Return of Gold as Global Reserve Asset”):

When the short end obeys and the long end shrugs, that is not policy talking. That is premium, charging by the day. And the plan carries a twist it did not price: the investment boom that is supposed to pay the mortgage is, for now, bidding against the Treasury in its own bond market, hundreds of billions of buildout raised from the same institutional pool that must absorb the wall. The exit ramp charges a toll on the road that leads to it.

The first point to make is that neither of these banks is a particularly good financial performer. WAFD is a bottom quartile performer vs Peer Group One and has reported a lot of noise of late in areas like securities losses. WAFD makes its way in life as a small regional bank by keeping low expenses. When we visited the bank years ago during our time leading bank ratings at KBRA, the CEO talked about his predecessor turning off every other lightbulb in the bank’s Seattle of

The difference between the Western markets that settle predominantly in cash and Asian markets where physical delivery is the norm is fundamental. A growing number of global central banks are moving their physical gold out of the US because of the erratic behavior of Donald Trump. They fear expropriation of their gold by a future government in Washington.

When the price of gold rises what is really happening is that the value of fiat currencies is falling. The rout ongoing in the bonds of the various industrial nations suggests that the dollar and all of its subsidiary currencies are in big trouble. Yet none of these democratically elected governments are willing to take steps to arrest the decline in their credit standing, namely raising taxes and reducing public spending.