Bloomberg Economics and a broader survey of economists raised US inflation forecasts on May 22, 2026, pushing back expectations for the next Fed rate cut as energy price shocks from the Iran war begin transmitting into broader CPI components. The revision reflects concern that the inflationary impulse is no longer contained to energy, complicating the Fed's ability to ease even as growth risks mount. The cut timeline is now being pushed well beyond prior consensus expectations.
For Armada's traditional repo desk, higher-for-longer SOFR has direct implications for repo rate dynamics and counterparty borrowing costs. Hedge fund and asset manager counterparties financing Treasury positions face sustained elevated carry costs, which can pressure leverage and collateral quality. Armada should stress its term book against a scenario where SOFR remains near current levels through year-end and revisit rate assumptions embedded in any fixed-spread bilateral agreements.