Good morning and Happy Fed Day. Yesterday oil continued to rise with disruptions in Libya joining the well-known Iran and Saudi troubles. Sectors were broadly lower outside of Energy as the S&P 500 failed to hold 7600: the 50d ma and the lower boundary of the past month’s trading range we’ve been noting. Treasury yields were largely unchanged however, but the Dollar strengthened, pressuring metals. Bitcoin was under pressure all day ahead of the Senate’s procedural vote on the Clarity Act, which ultimately failed in a procedural vote as it put up an effort similar to the Mets in the 1H of the season.

Ahead of the Fed rate decision and Warsh’s presser this afternoon US futures are higher as crude is giving back some of yesterday’s gains and retail sales were solid. VIX options expire at the open and the CRSP (Morningstar) reconstitution begins at the close. With oil lower yields have come in as well, down 2-4bp across the curve. The market has priced in ~90% chance of a rate hike following hawkish Jackson Hole comments from Warsh and still-elevated inflation prints. Assuming a hike and an abbreviated FOMC statement, focus will quickly pivot to the updated Summary of Economic Projections (SEP), which was last updated 3 months ago, followed by Warsh’s comments during his press conference.

Brent crude is down ~1%. Yesterday’s API inventory data showed a build of 7M barrels versus expectations for a ~2M draw. EIA data is out later today. There’s growing talk of countries enacting export bans on diesel, including the US. Metals are higher with the Dollar modestly weaker. Gold is up ~1% as well, bouncing off support at the 50d ma ~$4310. Most major crypto assets were under pressure over the past 24h as markets digested the Clarity act flame out. Bitcoin is taking a breather after falling ~5% yesterday, bouncing off support ~$75K, while ETH looks to hold $2400. Attention will likely turn to SEC and CFTC rulemaking to fill the vacuum and advance regulatory certainty for the industry.