Within hours of the FOMC raising rates to 3.75–4.00%, President Trump publicly demanded rates be cut to 1% or below, calling the US the world's best credit and citing strong investment inflows. The statement directly targets new Fed Chair Kevin Warsh, whom Trump appointed, setting up a visible conflict between the executive branch and the central bank at the start of Warsh's tenure.
For Armada's traditional repo desk, the political dynamic introduces a non-trivial tail risk: if market participants begin pricing in political interference with Fed independence, SOFR forward curves could become volatile and unreliable as a hedging benchmark. Counterparties pricing term repo off SOFR forwards—asset managers, MMFs, hedge funds—may demand wider spreads or shorter tenors to reduce rate-path uncertainty exposure. Armada should monitor SOFR futures and OIS markets closely for signs of forward curve instability.