The Kevin Warsh-led Federal Reserve convenes next week against mounting evidence that the December 2025 rate cut was premature. Job growth has surged and inflation has persistently exceeded projections even stripping out energy effects from the Iran conflict, reviving internal divisions that were present in the original November-December debate when regional Fed presidents loudly dissented.
For Armada's traditional repo desk, a hawkish pivot or hold-with-tightening-bias shifts the short-end rate curve materially. MMF counterparties would redirect cash toward Fed RRP if rates rise, compressing bilateral repo volumes. Treasury collateral valuations and hedge fund leverage costs would reprice quickly, so updating rate-shock scenarios before next week's decision is prudent.