by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the war in Iran, including discussions on Iran’s remaining weapons arsenal and potential planning for a US ground operation. We next review several other international and US developments that could affect the financial markets today, including discussions in Congress about cutting federal healthcare spending to help pay for the war and a government move in Japan to ease rules on coal-fired power plants to ease the impact of higher energy prices.

United States-Israel-Iran: As the US and Israel continued to attack Iran over the weekend, the Iranian military continued to respond with missile and drone attacks against Israel and other countries in the region. The Iranian counterattacks raise further concerns about the country’s deep arsenal of weapons and whether significant new capabilities are still being held in reserve. Meanwhile, diplomats from Turkey, Egypt, Saudi Arabia, and Pakistan met to discuss peace proposals over the weekend but with no breakthroughs.

• The New York Times yesterday quoted an unnamed US official as saying Iran likely retains thousands of Shahed attack drones and hundreds of ballistic missiles. Although the official acknowledges that no one knows for sure how many weapons Iran still has, anything in that range would suggest it can still attack and potentially keep the Strait of Hormuz closed for some time.
• In a potentially ominous development in recent days, Houthi rebels in Yemen have fired at least two ballistic missiles at Israel. Both were intercepted, but the development shows how the war could expand further. The Houthis’ military capabilities are widely seen as weakened, but their firepower could still help Iran make up for assets destroyed by US and Israeli bombardment.
• Given the Iranians’ success in hitting critical weapons systems at US military bases in the Middle East, military observers are increasingly convinced that Russia and perhaps China are providing detailed targeting coordinates to the Iranians and may also be providing knowledge or equipment to defeat US air defense systems. Such aid could expand the war, but the US has not lodged a significant public protest against it yet.
• Meanwhile, in an interview with the Financial Times yesterday, President Trump said he’d like to “take the oil in Iran,” suggesting he may send ground troops to seize control of Kharg Island, the center of Iran’s oil export industry. In what may have been an effort to prepare the US public for a prolonged occupation, he also said, “It would also mean we had to be there [in Kharg Island] for a while.”
• Separately, the Wall Street Journal has reported that President Trump is mulling a US operation to seize the 1,000 lbs. or so of partially enriched uranium that Iran is believed to have. Such an operation deep in Iranian territory would require ground troops and be extremely risky, potentially prolonging the war and impacting the president’ political fortunes in the midterm Congressional elections later this year.
• Iran’s effective closure of the Strait of Hormuz not only continues to drive up energy prices, but it is also creating shortages and boosting prices for other commodities. For example, Middle Eastern helium producers have declared force majeure and warned customers that they won’t be able to honor contracts due to the conflict. Global shortages of helium could lead to production disruptions and raise prices for semiconductors.
• In response to the developments over the weekend, global energy prices are up modestly so far this morning, with Brent crude oil changing hands at $107.37 per barrel, up 1.9%.

US Fiscal Policy: Republicans in Congress are reportedly considering cuts to federal healthcare spending to help pay for a budget bill providing as much as $200 billion to fund the Iran war and immigration enforcement. The healthcare cuts would be couched as reducing fraud and abuse, but some Republicans are concerned that the move would open the party up to election-year attacks that they’re cutting health care to pay for an unpopular war. If offsetting spending cuts or tax hikes aren’t passed, the enormous cost of the war would be added to the federal deficit and debt.

US Politics: A poll taken at last week’s Conservative Political Action Conference found that 53% of attendees support Vice President JD Vance to be the Republican Party’s presidential nominee in 2028, while 35% support Secretary of State Marco Rubio. No other Republican contender had support beyond the single digits. The results suggest Vance currently remains the leader in the race despite Rubio’s growing support.

US Private Credit Industry: New analysis reveals that four large private-credit funds marketed to individual investors by Apollo, Ares, Blackstone, and Blue Owl Capital have more exposure to the software industry than their filings suggest. Amid fears that software firms are threatened by artificial intelligence, the analysis helps explain why investors are now so eager to withdraw their funds from private-credit managers. If AI does materially undercut software firms, the funds’ high exposures would raise the risk of financial contagion, tighter credit, and a recession.

Japan: In a meeting on Friday, the government took steps to let less-efficient coal facilities take part in capacity market auctions in the fiscal year starting in April. Previously, such plants had been restricted from the auctions, where generators sell supply, in order to help tackle climate change. The new move illustrates how countries around the world are now backing away from climate stabilization policies to ensure a more diversified energy mix and better absorb the energy price hikes arising from the Iran war.

Canada: As they try to regroup from their poor third-place showing in last year’s parliamentary elections, the left-wing New Democrat Party over the weekend chose Avi Lewis as its new leader. Lewis, a filmmaker, is a scion of a leftist political dynasty that has been influential at both the national and the provincial level in Ontario. By pushing progressive policies on issues such as the environment and the fate of the Palestinians, Lewis aims to win back voters who abandoned the NDP for the Liberal Party of Prime Minister Carney.

Russia-United Kingdom: The Russian government has declared an official at the UK Embassy in Moscow persona non grata and ordered him expelled from the country for having unofficial meetings with Russian economists. The incident is likely to further strain UK-Russian relations. It will also further reduce the combined US and UK diplomatic presence in Moscow, which has made it difficult for the allied governments to understand and influence Russian foreign policy.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with a discussion of proposed reforms to US monetary policy. We then provide a fresh update on the conflict in Iran. In addition, we examine Google’s latest breakthrough and its implications for the market for memory chips, the impact of immigration crackdowns on population trends, and a new Chinese probe into US trade practices. As always, we include a summary of recent US and international economic data releases.

Fed Reform: The Federal Reserve could be set for a makeover once current Chair Jerome Powell steps down in May. The US Treasury Secretary Scott Bessent is considering ways to expand Treasury oversight of the central bank after a successor is named, with the possibility of making the Fed look more like the Bank of England. The change will likely be welcomed by Fed Chair nominee Kevin Warsh, who seeks reforms that influence not only the agency’s decision-making process but also its balance sheet management.

• Bessent is specifically targeting changes to the Fed’s operational independence. In a paper for International Economy magazine, he argued for revising how the Fed conducts quantitative easing, which he characterizes as a kind of “gain‑of‑function” policy experiment. He has also expressed support for a model of more limited interaction between the central bank and the government, similar to the Bank of England’s approach during the gilt market crisis.
• His proposals may also find support from Warsh, who had previously argued that the Bank of England manages its balance sheet more effectively than the United States. In 2014, Warsh served on a committee tasked with reviewing the Bank of England’s operations. He later praised the BoE’s practice of requiring governors to write formal letters to the chancellor to explain key decisions, arguing that this system clarifies the rationale for policy moves and enhances transparency.
• Potential changes to Fed policies are likely to intensify scrutiny over whether the central bank can maintain its independence, especially after several unsuccessful efforts to remove senior officials. Earlier this week, Jeanine Pirro, who had accused Chair Jerome Powell of lying under oath, conceded there was no evidence of wrongdoing. At the same time, questions have also emerged around the inquiry into whether Governor Lisa Cook misrepresented information on a loan application to secure more favorable terms.
• That said, whether or not the Fed will ultimately move closer to the BoE model, it does appear likely that it will keep trimming the size of its balance sheet. Fed Governor Stephen Miran has argued that, with targeted deregulation and reduced stigma around the use of the Fed’s lending facilities, the central bank could shrink its balance sheet by as much as $2 trillion without materially tightening financial conditions.
• We suspect the US Treasury and the Federal Reserve will maintain a close working relationship over the next few years as they navigate the impact of policy on long‑term interest rates. While any perception of coordination may draw scrutiny, clearer communication and more predictable operations from both institutions could help tame bond‑market volatility.

Iran Update: The war is now entering its fifth week, at the edge of the four‑to‑five‑week window the White House initially floated. On Thursday, President Trump announced that he had extended the timeline for a potential strike on Iran’s nuclear facilities, citing progress in ongoing talks. At the same time, Iran’s attacks appear to have intensified, signaling that it is not yet prepared to de-escalate the conflict. Meanwhile, trade through the strait is beginning to show signs of improvement, suggesting that there may be more that is unfolding behind the scenes.

• The president appears to be working through Middle East proxies to develop an off-ramp to the conflict. He has stated that he has been able to communicate with Iranian leadership through Pakistan, and that negotiations have so far gone well. This progress that led him to extend his deadline for targeting some of Iran’s critical infrastructure by 10 days. He later explained that the extension would allow the US to deploy as many as 10,000 additional troops to the Middle East.
• However, progress toward a deal has not yet produced a meaningful break in the fighting between the two sides. Israel and Iran continue to trade missile strikes. On Thursday, Israel announced that it had struck three of Iran’s ballistic missile and air defense systems. Meanwhile, Kuwait reported that two of its commercial ports were hit, while Saudi Arabia said it was forced to intercept Iranian missiles headed toward its capital, Riyadh.

• The conflict has nonetheless underscored Iran’s ability to disrupt traffic through the Strait of Hormuz. Despite US efforts, Washington has struggled to provide reliable naval escorts, with one analyst likening ships sailing under US or Israeli flags to “sitting ducks.” By contrast, vessels from friendlier countries such as China and India have generally found it easier to transit the strait, helping ease prices for Oman crude, which is largely shipped to Asia. Even so, new reports show that even these shipments are beginning to be turned away.
• Over the coming days, the market is expected to monitor developments more closely and may begin to price in a de-escalation of the conflict. Signs of concrete progress toward a resolution would likely facilitate a relief recovery; however, this sentiment remains fragile and could quickly reverse if market patience is tested. Given the current uncertainty, we recommend maintaining a conservative investment profile, prioritizing profitability and value over high-growth assets, as the situation unfolds.

Memory Disruption: A breakthrough from Google parent company Alphabet has triggered a selloff in memory‑chip stocks. The tech giant released a new paper describing an algorithm that could significantly increase the efficiency of the data storage needed to train and run artificial intelligence systems. If widely adopted, the innovation could reduce reliance on high‑end memory chips, which have been in short supply amid the AI infrastructure boom. That shift could be a boon for AI developers but a headwind for chipmakers.

Immigration Crackdown: The initiative to reduce immigrant populations has resulted in a contraction across 40% of US counties. This sharp demographic shift may partially explain the recent softening of the labor market. Historically, stagnant or declining population growth has weighed on overall economic expansion; however, this trend could be counterbalanced by a surge in productivity, particularly if AI adoption accelerates.

Beijing Probes US: Chinese regulators have launched an investigation into US trade practices, a move that follows the announcement of President Trump’s scheduled visit to China in mid-May. The probe is expected to focus on trade policies that disrupt global supply chains and restrictions on green technology. Furthermore, the investigation will likely define the parameters for a potential trade agreement as both sides convene to resolve their economic differences.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens by highlighting the ongoing controversy around private credit, including offering the differing outlooks for the asset class. We then provide another update on the Iran conflict. In addition, we examine a recent legal setback for social media companies and outline mounting economic concerns in Argentina. As always, we include a summary of recent US and international economic data releases.

Private Credit: While recent headlines have taken a dim view of private credit, we think the outlook is more constructive than many acknowledge. On Wednesday, Lloyd Blankfein cautioned that a single shock could prompt these lenders to reassess the value of their holdings, potentially forcing substantial markdowns after a run of failed portfolio sales. His remarks come after several firms were unable to find buyers for slices of their private asset books. However, there is more to the story than Blankfein suggests.

• The concerns are being driven by several prominent private credit firms which in February posted their weakest performances since 2022. The weakness reflects mounting scrutiny over the valuation of software‑as‑a‑service (SaaS) firms, as AI tools from Claude and others can perform comparable functions at lower costs. This threatens SaaS companies, which account for roughly one‑fifth of these lenders’ balance sheets. In response, some firms have imposed limits on client withdrawals to contain the fallout.
• A key concern for the software sector is the looming “maturity wall,” as a large wave of loans are coming due in 2027 and 2028. Many of these facilities are highly levered, making their capital structures a growing focus for investors. In response, software firms are working to demonstrate the durability of their business models — some by moving quickly to showcase sustainable profitability, others by refinancing to bolster valuations and strengthen balance sheets.
• That said, the situation may not be as dire as it is being portrayed. While major private credit firms have faced some pushback, many of the big names still outperformed the broader leveraged loan market in February. This outperformance signals that the risk to these credit funds has less to do with perceived default risk and more to do with going concern risk. In short, much of the decline in valuation stems less from present day performance and more from future earnings expectations.
• It is also worth noting that while many software companies may be in danger, AI also presents opportunities for them to pivot. Over the last few months, several software companies have begun reshaping their business models to more closely resemble AI agents, which has helped improve their outlook. One company that has been able to make this transition is Salesforce, which has shifted its software-as-a-service model to more of a service-as-software approach.
• While there is plenty of doom and gloom around AI and private credit, it is worth remembering that we are still in the early stages of both trends. That leaves time for weaker companies to adapt and potentially stage a comeback. In our view, the risks in private credit are real but likely less severe than the most alarmist headlines imply. This is a sector to watch closely but not one that should trigger outright panic.

Push to the End: The US is continuing to push for an end to its conflict with Iran by any means necessary. On Wednesday, Tehran rejected the White House’s 15‑point ceasefire proposal, which was conveyed via intermediaries including Pakistan. In response, Iran tabled its own five‑point set of conditions, which includes demands for reparations and formal recognition of its authority over the Strait of Hormuz — a proposal likely to meet the same fate. Washington, meanwhile, has intensified its military campaign even as indirect contacts persist.

• Tehran’s rejection of recent US overtures has drawn a sharp rebuke from President Trump, who is now calling for a more decisive international response. The president warned that Iran must engage seriously before “time runs out.” His remarks come as the White House signals that it is preparing for what officials are describing as a potentially decisive phase of the campaign, with options under discussion reportedly ranging from strikes on critical infrastructure, including power facilities, to the possible deployment of ground forces.
• The White House has already begun preparing for the potential economic fallout of a broader conflict. On Wednesday, the Pentagon announced that it has raised the maximum enlistment age for active‑duty service to 42 and is reportedly considering reallocating weapons systems originally designated for Ukraine to support US operations in the Middle East. Additionally, officials are running contingency scenarios for a spike in crude prices to $200 per barrel.
• What happens next is likely to carry significant repercussions for the global economy, given the potential to reshape the balance of power in the Middle East. A resulting power vacuum could fuel a more protracted conflict, particularly if the US is unable to secure meaningful cooperation from regional leaders in an effort to restore stability. While this remains a worst‑case scenario, it would also imply heightened volatility in energy markets.

Social Media Loses: Meta and Google suffered a major legal defeat over the impact of social media on mental health. A court ruled on Wednesday that their platforms created conditions that made them addictive for young users, leaving the companies liable for resulting harm. The decision marks a significant setback, raising the possibility that social media could be treated as a public health risk and subjected to stricter regulation, potentially on a scale comparable to tobacco.

Argentina Slowdown: Milei’s economic agenda appears to be running into headwinds as the broader economy softens. While his plan has centered on cutting spending to improve Argentina’s fiscal position, the strain now seems to be emerging on the revenue side. In recent months, overall growth has slowed and tax receipts have struggled to keep pace with inflation. This slowdown has raised concerns that he may need to alter policy to keep his agenda on track.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens by highlighting growing optimism that there is now a plausible pathway toward de‑escalation in the Middle East conflict. We then examine why expectations are building that the Federal Reserve may be preparing for a more hawkish policy stance. In addition, we discuss the Pentagon’s potential setback in its lawsuit with Anthropic and the emergence of Arm as a serious new rival in the chipmaking space. As always, we include a summary of recent US and international economic data releases.

 Easing Tensions? The market gained cautious optimism following signs that the White House is engaging in direct talks with the Iranian leadership. On Tuesday, President Trump suggested that negotiations were progressing, claiming Tehran had offered a “present” as a sign of good faith. While these claims were quickly undermined by additional US troop deployments and Tehran’s refusal to acknowledge talks, the market continues to hold out hope that cooler heads will prevail as it awaits an end to the conflict.

• The easing of tensions appears to be part of a White House effort to build momentum after Monday’s announcement of a five-day pause before deciding whether to strike Iran’s power infrastructure. It has been reported that the US has presented a 15-point peace plan, several elements of which Iran had previously signaled it could accept. Although it is still unclear who will attend any meetings, US officials are working to start talks with Iranian representatives on Thursday.
• While the White House has pushed for diplomacy, Iran has publicly rejected claims that it is willing to end the conflict. The failure to acknowledge talks comes as Iranian officials express distrust that the US, or even their own leadership, might use peace negotiations as a means to compromise their position or security. As a result, Iranian officials have stated they are not prepared to engage in negotiations as long as attacks continue and have warned that the Strait of Hormuz will remain closed.
• Despite Iranian resistance, there is growing international pressure to bring both sides to the negotiating table. China’s foreign minister, Wang Yi, has urged Iran to consider talks with the US, insisting the crisis should be resolved through diplomacy rather than force. At the same time, a group of Middle Eastern states, including Pakistan, Egypt, and Turkey, has moved to establish a backchannel between Washington and Tehran to facilitate potential negotiations.
• Even so, Iran has offered a limited concession, indicating it will allow non‑hostile vessels to transit the strait, amid reports it is charging fees of up to $2 million per voyage. This levy signals Tehran’s effort to assert de facto control over the waterway, while also suggesting that commercial shipments may face fewer outright blockages. On Tuesday, reports indicated that a Thai-flagged vessel successfully passed through the contested waters.
• Hopes of easing tensions have fueled a rebound in risk assets, with gold and silver prices recouping some of their recent losses. In the short term, we expect a fragile recovery that could strengthen over time as confidence grows that the conflict will end. This could lead market attention to shift from concerns about escalation to an assessment of the broader impact of the conflict. Looking ahead, investors may begin to favor companies that show earnings resilience and operational efficiency.

Fed Expectations: The sudden rise in energy and commodity prices has led to concerns that the Federal Reserve may need to make a hawkish pivot later this year. Earlier this week, Chicago Fed President Austan Goolsbee was the first to publicly state that tightening could be on the table. Speaking with CNBC, he said he could be open to a rate hike depending on how the conflict plays out. Although he also noted that rate cuts remain a possibility, his remarks show that inflation concerns are rising within the FOMC.

• Goolsbee’s comments suggest that the Fed’s focus may be shifting away from its maximum employment mandate in favor of price stability. Following the recent Fed meeting on March 17–18, Powell acknowledged that several board members could also see a rate hike in the future, though it is not the base case for the majority. However, he indicated the Fed is prepared to take appropriate action if inflationary pressures begin to build due to the Iran conflict.
• That said, even as the tone has shifted, the FOMC has also signaled that it is prepared to adopt a wait‑and‑see stance before pivoting toward rate hikes. On Tuesday, Fed Governor Michael Barr indicated that rates may need to be held steady for some time as the conflict unfolds, while Governor Stephen Miran suggested that although higher oil prices could push up goods and energy costs, he remains optimistic that the Fed could still cut rates several times this year.

• Markets are already leaning more hawkish, even as Fed officials remain non‑committal about how the Iran war will ultimately shape policy. The latest one‑month SOFR futures for December indicate that investors now expect the Fed to keep rates on hold, with some probability assigned to a hike before year‑end, whereas before the conflict, they had been pricing in as many as two cuts.
• A potential hawkish shift by the Federal Reserve is likely to remain a central theme even after the conflict ends, as the economy braces for renewed inflationary pressures in the coming months. For now, we remain skeptical that the Fed will be willing to vote for another rate hike, given the significant political pressure from the White House. That said, we have grown less optimistic about the Fed’s ability to cut rates without clear signs that the labor market outlook has begun to deteriorate.

 Pentagon Anthropic: A judge signaled that she may not side with the US government in its dispute with Anthropic. The judge overseeing the case stated that the Pentagon was using the removal of its contract as punishment for Anthropic taking its dispute public over the use of AI. The comments suggest that the government’s ability to award or withdraw contracts at will is likely to be taken up by the Supreme Court. The ongoing fight is expected to have implications for future public-private partnerships as the government gets more involved in the economy.

Chip Rivals: More companies are looking for ways to bypass major chipmakers by designing their own semiconductors. Arm appears to be making headway in this shift after announcing that it has developed its own chips, potentially allowing it to compete more directly with larger manufacturers. The company expects orders to rise following reported commitments from Meta and OpenAI. The emergence of new chip rivals is likely to accelerate as AI becomes a more prominent force in the global economy.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the Iran war and its economic and financial market implications. We next review several other international and US developments that could affect the financial markets today, including a new free-trade agreement between the European Union and Australia and a potential deal in Congress to resolve funding for the Transportation Security Administration to quell airport security lines.

United States-Israel-Iran: Saudi Arabia, Kuwait, and Bahrain all indicated they have been hit by new Iranian drone and missile strikes this morning, but it isn’t clear whether the attacks caused new damage to their globally important energy infrastructure, commodity production, or shipping facilities. The strikes came despite President Trump’s vow yesterday that the US would postpone new attacks on Iranian power plants because of “productive” talks with the Iranians. New details suggest those talks are actually being led by Middle Eastern officials.

• According to reports, the foreign ministers of Turkey, Egypt, Saudi Arabia, and Pakistan are trying to drive talks with the Iranians forward, but they’ve struggled to locate a high Iranian official to engage with. They and the US now appear to think the speaker of Iran’s parliament, Mohammad-Bagher Ghalibaf, would be a viable interlocutor, but Ghalibaf has said Iran isn’t ready to talk. In any case, reports say Ghalibaf also fears that if he comes out of hiding for talks, he would be assassinated by the US or Israel.
• With Middle Eastern producers such as Aluminum Bahrain and Qatalum cutting output amid energy and shipping disruptions related to the war, new reports say global automakers are starting to engage in “panic buying” on fears that aluminum supplies could run out within months. Naturally, the result will likely be continued upward pressure on prices on top of the price pressures already hitting crude oil, natural gas, and fertilizers.
• Meanwhile, several major purchasing managers’ indexes from around the world today are pointing to a broad risk of “stagflation” because of the war (see tables in the data section below), with overall growth weakening and the subindexes on prices surging.

European Union-Australia: European Commission President von der Leyen and Australian Prime Minister Albanese yesterday signed a free trade agreement designed to shield their economies from the increasingly nationalist and protectionist policies of the US and China. The deal will drop bilateral tariffs and onerous regulations on a wide range of exports. The EU and Australia also signed several security deals, including one with a provision allowing Australian firms to participate in the EU’s big new rearmament program.

Italy: In a referendum yesterday, right-wing Prime Minister Meloni lost her bid to achieve several judicial reforms that critics said would have undermined the rule of law. With almost all ballots counted, the constitutional amendments were rejected by 53.7% of voters. Turnout was also unexpectedly high, with nearly 59.0% of registered voters taking part in the election. The results will likely weaken Meloni’s political power to some extent, although she is in no danger of being ousted.

US Labor Market: A new survey of corporate chief financial officers indicates that artificial intelligence had essentially no effect on employment in 2025 and will spur companies to trim only a small number of their overall jobs in 2026. In future years, however, the surveyed CFOs believe AI could prompt more significant job cuts for people in routine, clerical, and administrative roles such as bookkeeping and customer service, while workers with sophisticated technical skills, such as engineers and architects would more likely see their jobs enhanced.

US Air Travel Industry: As the Transportation Security Administration continues to shed workers and airport security lines continue to lengthen, angering travelers, Senate Minority Leader Chuck Shumer last night said Democratic and Republican leaders in the chamber are approaching a deal that would fund most parts of the Department of Homeland Security, including the TSA, but would still not provide funds for the Enforcement and Removal Operations branch of Immigration and Customs Enforcement.

• If consummated, the evolving deal would help end an increasingly disruptive situation for the US airline industry and avoid an additional political threat for the Republicans ahead of the Congressional midterm elections in November.
• Funds for that portion of ICE would still be held up over Democratic-Republican disputes over the conduct of immigration enforcement raids.

US Private Credit Industry: Apollo Global Management has become the latest major investment firm to limit withdrawals from one of its private-credit funds. According to Apollo, investors in its Apollo Debt Solutions BDC had requested to withdraw 11.2% of the $15-billion fund, triggering a rule limiting the withdrawals to 5.0%. As with similar incidents at other firms, this one shows how investors have suddenly soured on private-credit investments but have discovered just how illiquid they can be, triggering even more redemption requests.

US Prediction Markets: In response to the introduction of a bill in Congress to outlaw contracts on sports in prediction markets, as we reported yesterday, sources say Kalshi plans to block athletes, coaches, and officials from betting on their sports and to block political candidates from trading on their campaigns. The move shows that the prediction-market industry has finally seen that insider trading could throw it into reverse and is now moving more aggressively to address the issue.

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