According to the April FOMC minutes, a majority of Federal Reserve officials indicated willingness to raise interest rates if inflation remains elevated, a more hawkish constituency than markets had previously recognized. Iran-war-driven commodity price pass-through and the expected leadership change to Kevin Warsh are cited as factors accelerating the internal debate. The Fed held rates steady in April, but the dissent from four rotating voters signals fracturing consensus.
Armada's traditional repo desk faces direct exposure: if markets reprice the SOFR path upward, overnight and term repo rates move with it, haircuts on duration collateral widen, and hedge fund or asset manager counterparties may face margin pressure. Primary dealer inventory capacity could also tighten as banks manage SLR constraints against a higher-for-longer backdrop.