Three of the most powerful men in the global economy asked the markets to believe them, and the markets declined.
The president told us peace was breaking out, then that talks were happening, which Iran said weren’t before the Hormuz “deal” hardened into something closer to a surrender document. Iran demanded the right to bar US and Israeli ships and charge the rest a toll.
The Federal Reserve chairman, whose strategy is to say as little as possible, apologised for it, via anonymous friends. And the Treasury Secretary reached into a corner of the Fed’s toolshed to print dollars so that Japan could buy yen.
There’s a name for a Treasury leaning on the central bank’s balance sheet to ease while the Fed says it wants to tighten: fiscal dominance, the thing every emerging-market central banker spends a career trying to avoid.
And through all of it, the only voices the market actually trusted were the ones that can’t talk. Gold moved to $4,300. Copper hit a record. And a gallon of diesel told us what no politician would, that this war has broken something you cannot fix with a signature.
No one consumes crude, and the war has destroyed roughly 5 million barrels a day of the world’s refining capacity. You can reopen a strait with a signature. You cannot reopen a refinery with one. Which is why the president’s promise of $2.50 gasoline is a fantasy, and why he spent the week attacking the refiners his own war made rich.
The difference is between the things you can print, money, promises, forward guidance, a ceasefire, and the things you can’t, fuel, copper, credibility.
In a world where the authorities can conjure up dollars and yen but not refineries or copper wire, the honest side of the ledger is the unprintable.
The fiscal-dominance story, the refining shock, the AI sorting, Situational Awareness, the model that left a note on its way out of the box, SpaceX’s cheque-writer earnings.
And the take-forward into next week: the jobs number, the Bank of Japan, and whether Washington can stomach handing Iran a toll booth three months before a midterm.
Trust the unprintable. Be sceptical of promises.
Everything is proceeding normally.
Good luck out there, and enjoy the weekend.
Jeremy.
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