San Francisco Fed President Mary Daly publicly endorsed the FOMC's decision to hold rates at its most recent meeting but issued an explicit warning that inflation may be more entrenched than the base case assumes, requiring more aggressive policy if data deteriorates. Her comments follow a period of sticky core inflation readings and signal the committee is not yet comfortable pivoting toward cuts.
For Armada's traditional repo desk, a hawkish Fed tail scenario directly affects SOFR fixings, the cost of term repo, and mark-to-market on Treasury and agency collateral. Counterparties including hedge funds and asset managers financing duration may face increased margin pressure. Review haircut schedules on longer-dated Treasuries and confirm rate-cap provisions in any floating-rate MRA annexes.