Fed Chair Kevin Warsh testified before the Senate Banking Committee Wednesday as fresh Labor Department data showed headline PPI fell 0.3% in June and core PPI ex-food, energy, and trade services rose just 0.1%. Combined with Tuesday's soft CPI print, market-implied odds of a July rate increase have dropped materially, though the policy path for the rest of 2026 remains uncertain given Warsh's ambiguous testimony.
For Armada's traditional repo desk, this data reduces the near-term risk of a surprise rate hike compressing collateral valuations on longer-duration Treasuries and agencies. SOFR-linked floating-rate trades and term repo pricing through year-end should be stress-tested under a range of hold-steady and eventual-cut scenarios, given how quickly the macro narrative has shifted over two trading sessions.