Title:   Happy Fed Day to all who celebrate — FOMC, SPCX, copper, crude (note)
Source:  Paulo Macro (Substack)
Author:  Paulo Macro (aka Cloudbear)
Date:    2026-JUN-17
URL:     https://substack.com/inbox/post/202432733
Type:    Written Substack post, PAID (no video, no timestamps). Saved for personal study.
Note:    Text saved verbatim as pasted; only chart-image placeholders dropped and meaning otherwise intact.

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PAULOMACRO — JUN 17, 2026 — PAID

The daily chat opener was getting long on charts so for the benefit of readers who don't need another chat app, here goes…

FOMC
SPCX
Copper
Crude

Before you ask, I have no idea how this FOMC will lean. Everyone seems to think new FOMC Chair Kevin Warsh only has so much leash under Trump, which is leading many people I know to fade the idea he will come dovish and they think he will come out hawkish like Warsh 2008. But then I think — actually they crashed oil just in time for the Fed to put Transitory back on the table and "wait and see"... which is dovish and starts dipping into policy mistake territory...remember the 2yr is the scariest chart in finance continues to lead the Fed. Easy to think in circles, so let's just see what happens.

I will say I find it interesting just how asynchronized economic data has become of late. US has felt like it's running hot for months (retail sales beat this morning as the latest)… while the PBOC (also known as "The Bundesbank" by my pal Louis Vincent Gave) tightened liquidity hard in March in reaction to the oil price spike and we are now seeing this play through in softer economic data. Makes me wonder if the PBOC soon starts to loosen the reins — what do metals do with that?

SpaceX is sucking the oxygen out of the equity room. We've talked equity funding here for nearly two weeks — now everyone is an expert. My biased opinion is that with the listing of options and "narrowing in" that final big tops witness, along with Russell inclusion coming in a few days and Nasdaq in early July, we are likely to see something truly acrobatic here. Back in 2020 I said "this insanity does not end until Elon is the world's richest man — we have to see that headline for the book written about this period." Now I say "this doesn't end until SpaceX is the world's largest company." It could happen quite fast. Basically if you lived through Volkswagen in 2008, but multiple it by 10-20x. While this is happening, I hear SPCX is expecting to come to the investment grade bond market (yes, IG) with $20-25bn of debt in the next few weeks… expected to come tighter than ORCL by 25bps or so. I suppose I would rather lend to SPCX than Larry Ellison at this point, but still…

At the same time, the narrative is shifting in semis and the market action is interesting. For all the attention GPU rental rates were getting since Mythos, the stuff is rolling over/trading heavy:

Bulls are sticking with arguments that cheap Chinese LLMs may stress closed US models but Jevon's Paradox = adoption and the Fable clampdown by the US means other countries now need to build their own so we need more. Perhaps. I think the datacenter construction delay/cost explosion story is a problem for the bull narrative into the teeth of weakening pricing and rental rates, and given where the equities sit and now the prospects of crowding out by new paper issuance in the indices, there's room for shaking the tree in between now and the fall. But we'll see.

Loose side thoughts on copper — I am a bit uncomfortable but sticking with my juniors because drawdowns are a part of life. On the one hand, if the PBOC starts to loosen liquidity now that oil is down, we should see some life in precious and base metals (side side note: gold sold off on Gulf/Turkey? It was PBOC liquidity tightening all along).

On the other hand, there is quite a lot of length in US copper futures, and if the datacenter rollout and ever-growing capex starts to crack (see MSFT walking away from $3bn ORCL cloud-leasing deal last night), copper could shake longs. I cannot deny a big pillar of the copper bull case is driven by datacenter rollouts. On the other hand, China is building their own too, and there's the sulfur issue — so there is a lot of room for a fundamental bull and bear debate. Don't color me surprised if we go to $7.50 or $5.50 from here. Still, with crude drowning out most discussions, gold and base metals are starting to feel a little invisible (despite copper near all-time highs).

On crude oil, I've said enough, but I stand by this weekend's note where I noted my expectation for a -8mm crude draw on the commercial side last week (plus SPR) at this morning's 10:30 EIA weekly release. The API data last night seems to agree. Probably good for a -$3 drop in oil in the Great Upside Down knowing this market.

However the real story is in cracks… refiners are minting again, and if they aren't buying crude with both hands, they really should be:

But products are acting reeeaaalllly interesting… note gasoline and diesel July-Aug spreads. Yes there is a tropical storm coming in the Gulf, but it is tightening all the same… sneaky. Remember: products lead.

That's all I got for today… stay frosty!

Kind regards,
Paulo aka Cloudbear