Weekly KAOS, 6/19/26
Rockets, a Peace Deal, and the Boxed Warsh Fed
Welcome to the Weekly KAOS — UrbanKaoboy’s end-of-week roundup covering Macro and Geopolitics, where I try and tease out the most impactful bits of the week.
Themes of the Week
A record SpaceX float and a Hormuz peace deal drain the war premium from Oil — but the Warsh Fed stays boxed as import prices climb and housing buckles
Two literal escape-velocity stories anchored the tape this week — SpaceX hitting the public market at a staggering ~$1.77T (the largest IPO ever printed), and a US-Iran deal that promises to reopen the Strait of Hormuz and bleed the war premium that’s haunted Brent all spring. Risk-on everywhere: futures ripped, crude slid to multi-month lows, consumer sentiment ticked up on cheaper gasoline.
The tape wants to file all of this as a clean disinflationary all-clear — the “worst of Inflation is behind us” trade. I’m not buying the all-clear yet, and here’s the friction: the same week handed us core import prices at +0.8% and housing starts down 15.4%. That’s not Goldilocks — that still smacks of Stagflation, with Inflation seeping up through a side door while growth buckles underneath.
It’s the bimodal box I mapped when the war first shut Hormuz in Into The Void?, and the new Warsh Fed inherits it intact — Goldman expects Kevin Warsh’s first meeting to hold and quietly retire the cut-biased guidance, with headline PCE north of 4% all year. Economists just shoved the first cut into 2027. The Warsh Fed is boxed, exactly as I’ve argued. And notice what’s funding the gasoline “peace dividend”: the SPR just hit a 43-year low. We’re not disinflating so much as draining the buffer — the same squandering of our energy advantage I’ve warned about for years; I didn’t like it under Biden, and I don’t like it under Trump. Oil’s downside this week is the Sword of Inelastic Supply resting, not retired. KAOS, as ever, hides in the second derivative of price (the rate of the change of the rate of change in price), and I’m still watching for signs of a reversal on that front.
