FED: US TSY 30Y BOND AUCTION: NON-COMP BIDS $95 MLN FROM $25.000 BLN TOTAL

• 9,000 TYU6 108/TYQ6 108.5 diagonal calendar spread on 2x3 basis
• 18,000 Thursday wkly 106.5 calls, 8 (exp 7/16)
• 11,300 Wednesday wkly FV 106.75 calls, 1 (exp 7/15)

Chair Warsh makes a slightly odd and to our ear hawkish apparent reference to the old "extent and timing" language that used to be part of the FOMC's forward guidance paragraph in the Statement in referring to future policy actions. Most pointedly he mentions it in an answer to a question about how he can give the American people confidence that the Fed will achieve price stability (reminder April's statement - the last before Warsh came in as Chair and led to a wholesale edit of the Statement - said "In considering the extent and timing of additional adjustments to the target range for the federal funds rate")

• "I can give you the commitment that we will deliver price stability. I was comforted at my very first meeting about a month ago, as I looked around the table of my 18 colleagues, there was no willingness to tolerate higher prices. There was a commitment that was unambiguous and unanimous that we're going to deliver. So the next question is, how are we going to deliver it? ... You gave us a lot of the tools to deliver on that commitment [on price stability], we intend to do it.... we have the tools to do it. We have a printing press, we have a balance sheet, and interest rates. They have both provided significant accommodation and restrictiveness during different parts of the business cycle. And over the coming period, I'm going to ask our colleagues and have a good family fight about the extent and timing in which we would need to deploy those to deliver on the promise."
• Warsh then again downplayed the significance of the June CPI report again with reference to his task force on data: "While I reviewed the data that came out this morning on CPI and it was it was positive relative to expectations, I'm not for cherry picking. I am not going to show up here and say mission accomplished. And what I'd say is there's plenty of work to do, and I would feel more confident if we had better data to inform our decision making. We have a task force that's going to be focused on doing just that."

US President Donald Trump is addressing reporters in the Oval Office, alongside Iraqi Prime Minister Ali al-Zaidi. LIVESTREAM Trump implies, when asked about his pivot on charging a 20% toll on shipping in the Strait of Hormuz, that it “wasn’t fair” that the US assumed the cost of protecting shipping in the Gulf when the oil wasn’t required by the US.

• Trump says that after he put his statement on the toll out yesterday, he was “called by a lot of [Gulf] countries,” who said “they’d love to do it a different way,” by investing “tremendously” in the US. Trump adds, “I like that because I don’t think anybody should be able to charge a fee for the Strait [or in other similar waterways].”
• When pressed on whether the idea of a toll for Hormuz is dead, Trump says: “I just told you, you have Saudi Arabia, UAE, Qatar, Bahrain, and Kuwait [and unspecified other countries]. They would love to invest more money in the US at record amounts, and that would be very acceptable. And this way there’s no fee. I don’t like the concept of a fee. But at the same time it’s not fair that we’re protecting this Strait for the entire world… I  don’t mind protecting it… But it’s unfair that we’re not somehow compensated.”
• While Trump has touted major investment pledges from Gulf states in the past, it is unclear if the pledges have been fulfilled. Forbes reported in March: “According to the White House in May 2025, Gulf countries pledged over $3 trillion in total investments to the U.S. Reportedly, the commitments were from Saudi Arabia ($600 billion–$1 trillion), the UAE ($200 billion–$1.4 trillion), and Qatar ($1.2 trillion). The objective of these multi-year, often non-binding, focused on energy, defense, and technology. At the time of this writing, it is unclear whether these commitments were actually invested in the U.S.”