Full recap
Happy Friday, thought criminals. Let it resonate. The Federal Reserve is apparently getting a renovation - not the kind where they repaint the lobby, but the kind where Kevin Warsh reaches deep into Wall Street's plumbing and tightens some valves. Less day-to-day market meddling, clearer rules for intervention. Sounds boring until you realize the Fed has been basically the HOA of global capital markets for two decades, fining you for painting your house the wrong color while their own roof leaks. Meanwhile, the U.S. government is out here buying equity stakes in companies like a drunk uncle at a startup pitch night. Quantum computing firms were first. Now traders on Kalshi are betting IonQ, Micron, and Anduril are next. Nothing says 'free market' like Uncle Sam sliding into your cap table uninvited with a term sheet and a flag pin. Speak of prediction markets - companies are still pouring money into them despite a regulatory fog so thick you could lose a lawyer in it. Somehow that's reassuring. When everyone's confused about the rules and still playing anyway, you know the game is real. That's not a red flag, that's a feature. Treasury yields are surging and the 'risk-free' label on U.S. bonds is aging like milk in a Tampa parking lot. Bond investors are scrambling toward intermediates, BBBs, and high yield like Matt Olson scrambling toward a hanging curveball - which, speaking of, is exactly what experts are predicting he'll do tonight. Yes, it's Friday night baseball. Matt Olson and the Braves are live, the Yankees have Gerrit Cole back from Tommy John surgery like a man returning from war, and the Thunder-Spurs Western Conference Finals hit Game 3 in what might be the most underrated playoff matchup of the decade. The French Open is also in full swing, which means someone is about to lose in five sets and cry in multiple languages. Here's the thread that ties it all together: whether it's the Fed, the bond market, or a SportsLine model running 10,000 simulations - everyone is pretending they have more certainty than they do. The Fed pretends it controls inflation. Bond markets pretend Treasuries are safe. The model pretends it knows what Gerrit Cole's elbow has left in the tank. We're all just vibing in the fog and calling it analysis. Go enjoy your weekend. The plumbing is leaky, the government owns your favorite tech company, and the Thunder might actually be unbeatable. Let that resonate.
Highlights
- Kevin Warsh wants to shrink the Fed's market footprint - brave move when the market IS the Fed's footprint at this point
- The U.S. government is becoming the world's most powerful passive investor, except nothing about it is passive
- Gerrit Cole returns from Tommy John surgery tonight for the Yankees - the bond market and his elbow are both being asked to perform after a long recovery, and neither has been tested yet
- Treasury 'risk-free' yields are surging, which means the only thing risk-free about them now is the guarantee you'll feel dumb holding them
Original source links
- CNBC: Kevin Warsh's real Fed 'regime change' may happen deep inside Wall Street's plumbing
- CNBC: Which company will the U.S. government take a stake in next? Here’s what traders think
- CNBC: Despite murky legal landscape, companies are undeterred in their prediction market investments
- CBS Sports: Free MLB home run picks for May 22: Braves' Matt Olson among expert's best bets for Friday
- CBS Sports: 2026 French Open odds, picks, predictions, futures: Proven expert reveals best bets for men's, women's draws
- CBS Sports: Thunder vs. Spurs odds, prediction: 2026 NBA Western Conference finals picks, Game 3 best bets by proven model