Big Fights loom aside from Iran: Fed, Data Centers, Private Credit
April 30, 2026
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–I missed the afternoon price action so just a couple of brief comments. First, Powell staying on as Governor and the 3 dissents leaning against easing bias are a clear Trump snub. From the statement: “Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time.” [I didn’t even see an overt easing bias] Powell said that its clear the market is convinced inflation is going back to 2%. Sets up a tough start for Warsh.
–Some interesting comments by Gundlach post-Fed. “Odds of a hike this year are greater than odds of an ease.” Also warned that we’re going to shortly see inflation prints >4%. Today we get PCE prices, expected yoy 3.5% with Core +3.2% (for March). I looked at CL1 (front month WTI crude) from end of March ’25 to end of March ’26, went from about 70 to 102. But in April oil dipped, so from end of April 2025 to now the change is 60 to 107 (77% annualized). Ford earnings call warned that commodity inputs (aluminum) would cost the company about $1 bllion this year. P&G also just warned about input costs. US 10y currently has a double top 4.43%; the high last May was 4.60 and in 2023 the high was 4.99. 30y is around 5%, the high in May was 5.09% and high in 2023 was 5.11%. Everything pointing to higher yields for now.
One last comment from Gundlach: ‘beware the ides of June (June 23)’ because he thinks there could be “humongous withdrawals” from private credit funds.
–From NYT re big tech earnings calls: “All of the companies said they would be spending even more, totaling roughly $700 billion this year. Meta, for one, raised its spending forecast for 2026 to between $125 billion and $145 billion, up from its previous prediction of $115 billion to $135 billion. Google also boosted its projection, to at least $180 billion, and said its spending would be “significantly” higher next year.” So $700 billion from 4 companies in an estimated $32.5T GDP for 2026, around 2%. However the public backlash against data centers is growing: Compass/Brookfield is abandoning a data center investment in Northern Virginia due to public opposition.
–Chipoltle (CMG), up after hours on beat (7% growth), but it’s mostly because of new locations opening. But same store sales are 0 to +0.5%. How do you open new stores given no nominal sales growth in an inflationary economy? Is it me?
