On May 22nd, Kevin Warsh walked into the Eccles Building as the new chairman of the Federal Reserve. Twenty-six days later, he delivered the most consequential first press conference by a Fed chair in modern memory — and most investors still haven't processed what it means.

Here's what happened. Warsh held rates steady at 3.5%–3.75% — no surprise there. But nine of eighteen Federal Open Market Committee (FOMC) participants penciled in at least one rate hike before year-end. Six of those nine projected two increases. The committee scrapped its prior language about "additional rate adjustments" — the kind of soft, hedging verbiage that signals future cuts — and replaced it with nothing. A blank page. Data-dependent. Cold.

"We've missed on inflation for five years and we're going to fix that," Warsh told reporters. Think about that for a second. The new chairman of the Federal Reserve — appointed by a president who spent years demanding lower rates — just told the world that tightening is on the table.

Bank of America responded this week by changing its forecast. The firm now expects three quarter-point hikes this year, lifting the benchmark rate to 4.25%–4.50%. Markets are pricing in a 63% probability of a September increase and an 80% chance of a December hike. The dollar surged to a 13-month high. Gold dropped 5% in a single week. The 10-year Treasury yield jumped.

So why does this matter to you?

First, the inflation picture is worse than most people realize. The Consumer Price Index (CPI) hit 4.2% year-over-year in May. The Personal Consumption Expenditures (PCE) price index — the Fed's preferred gauge — ran at 3.8% in April, nearly double the 2% target. As Buffett has long observed, inflation is a far more destructive tax than anything Congress has ever enacted — and this one has been compounding for five years.

Second, Warsh is not Jerome Powell. He stripped forward guidance from the statement. He refused to submit his own "dot" to the projection grid. He shortened the policy statement to its leanest version in years. This is a man who believes the Fed has talked too much and acted too little. He's building credibility the old-fashioned way — by letting hawks sharpen their talons.

Third — and this is the part most investors are missing — the Iran peace deal was supposed to be the pressure valve. Oil was supposed to come down. Inflation was supposed to cool. And oil has come down. WTI crude fell below $70 a barrel this week, its third straight weekly decline. Brent is at $74. The Strait of Hormuz is reopening — slowly, messily, but reopening. And yet inflation is still running hot. If you don't own hard assets in this environment, I urge you to reconsider your allocation.

The uncomfortable truth is this: even with oil returning to pre-war levels, the stickier components of inflation — services, shelter, wages — haven't budged. Warsh sees it. The committee sees it. The bond market sees it. The question is whether you see it too.

Gold at $4,050. Down 20% from its January record. Still up 23% from a year ago. If you're a paid-up subscriber to the idea that central banks will eventually lose this fight against structural inflation — and you should be — then this pullback is a gift. Not a funeral.

Plan accordingly.

China's commerce ministry added MP Materials and USA Rare Earth — the two companies at the center of Washington's effort to build an alternative rare earth supply chain — to its export control list this week. The move is largely symbolic, since both companies say they've already cut ties with Chinese suppliers. But the message is unmistakable: Beijing is watching, and it will punish any attempt to escape its grip.

The bigger picture is the one that should keep you up at night. Between January and June of this year, neodymium-praseodymium oxide prices surged sixfold. Tungsten concentrate tripled. Antimony doubled. European defense contractors report they cannot secure permanent magnets for missile guidance systems. Over 80% of European companies depend on Chinese supply chains for minerals essential to defense, electric vehicles, and renewable energy.

And one more thing... the October 2025 rare earth controls — the sweeping measures that extend Chinese regulatory authority to any foreign product containing as little as 0.1% Chinese-origin rare earths — are merely suspended until November 2026. That suspension was a diplomatic concession, not a policy reversal. When it expires, any company in the world using Chinese rare earth processing technology will need a license from Beijing.

Keep in mind: China controls 94% of global sintered permanent magnet production. Those magnets go into everything from F-35 fighter jets to the motors in your electric vehicle. A multi-institutional analysis warns that rebuilding independent alternatives would take 20 to 30 years. We don't have 20 years. The U.S. launched FORGE — the Forum on Resource Geostrategic Engagement — in February with over $30 billion in commitments and 21 bilateral agreements. New magnet manufacturing capacity is coming online this summer. But displacement remains modest. If you're invested in the defense supply chain, these are the numbers that matter.

On June 17th, Donald Trump and Iranian President Masoud Pezeshkian signed the Islamabad Memorandum of Understanding — a 14-point framework to end more than 100 days of war and reopen the Strait of Hormuz. The next day, the U.S. Navy lifted its blockade. By June 19th, at least 20 tankers had crossed the strait — the highest traffic since June 2nd. The Treasury issued temporary sanctions waivers on Iranian oil. Saudi tankers headed toward Ras Tanura to restart Persian Gulf exports for the first time since March.

Then the whole thing nearly collapsed. On June 21st, Iran declared the strait closed again, citing Israeli strikes in Lebanon. Traffic dropped to 12 ships — half of them running dark, transponders off. The U.S. military denied the closure. Lloyd's List confirmed that at least 15 Iran-flagged supertankers were outbound from the Gulf of Oman with tracking active. By Sunday, Vice President Vance was in Switzerland negotiating a "road map" to a final deal within 60 days.

In other words, the strait is open the way a swinging door is open — it depends on who pushed it last.

Oil markets don't care about nuance. WTI collapsed below $70 this week, down 10% on the week. Brent fell to $74. Confirmed throughput has risen to roughly 4.8 million barrels per day — still less than a third of the prewar benchmark of 15 million. But roughly 51 million barrels loaded since late April have already exited the strait. Iraq is demanding a higher OPEC production quota. Goldman Sachs cut its fourth-quarter Brent forecast to $80 from $90.

Most people have already moved on from the Iran war. That's a mistake. The MOU didn't resolve Iran's nuclear program. It didn't address $24 billion in frozen assets. It didn't settle who controls Hormuz after the 60-day toll-free window expires. The ceasefire is real. The peace is not — not yet.

Chevron secured a 20-year agreement to supply natural-gas-fired power for Microsoft's planned $7 billion data center complex in Reeves County, Texas, with operations expected to begin in 2028. That single sentence tells you more about the future of energy markets than a hundred analyst reports.

Data centers are becoming the fastest-growing source of copper and electricity demand on the planet. J.P. Morgan estimates data center copper demand alone could reach 475,000 tons in 2026 — up from 110,000 tons in 2025. When developers need copper for data center expansion, price is almost irrelevant. This is inelastic demand — the kind that reshapes commodity cycles.

The AI arms race is no longer just a software story. It's an energy story. It's a minerals story. It's a land-use and permitting story. Every frontier model that gets larger requires more compute, which requires more electricity, which requires more natural gas, which requires more pipelines, which requires more copper wire, which requires more rare earth magnets in the generators. The chain is long and every link is getting tighter. If you think AI is just a tech trade, you're only seeing half the board.

In February, David Glassman sat at his desk at J.P. Morgan Asset Management and ran the numbers on America's fiscal trajectory. What he found was stark enough that he published five scenarios — ranging from manageable to catastrophic — for where the national debt goes from here. The most optimistic scenario still showed debt rising every single year through 2036.

Here's the idea. The U.S. national debt stands at $39.28 trillion — roughly $115,000 for every living American. The fiscal year 2026 deficit is tracking toward $1.9 trillion, or 5.9% of GDP. Just the interest payments alone will consume $1.037 trillion this year — more than the entire defense budget. The Congressional Budget Office (CBO) projects debt held by the public will rise from 101% of GDP this year to 120% by 2036, surpassing the post–World War II peak.

Think about what that means. The average cost of servicing the debt has more than doubled in five years. And now Kevin Warsh's Fed is talking about raising rates. Every 25-basis-point hike translates into billions of additional interest expense on a debt pile that's growing by $8 billion a day.

Let me put this in plain English. The federal government is spending $7.4 trillion this year. It's collecting $5.5 trillion in revenue. The difference — $1.9 trillion — goes on the national credit card. The interest on that credit card is already the single largest non-entitlement expenditure in the budget. And the new Fed chairman just signaled he may raise the interest rate on that card.

This is what Buffett meant when he called the deficit "dropping Mentos into a can of Diet Coke." The longer you wait, the more violent the reaction.

So what should you do? First, understand that this debt will never be repaid in real terms. It will be inflated away, restructured, or defaulted upon — there is no fourth option. Second, recognize that gold, real assets, and productive businesses with pricing power are the rational hedges against fiscal entropy. Third, diversify internationally. J.P. Morgan's own analysis concludes that rising U.S. debt is a reason to add international assets for portfolio stability.

Horse, meet water.

The Islamabad MOU gave Washington and Tehran 60 days to negotiate a final deal covering nuclear inspections, frozen assets, and Hormuz governance. That clock started June 17th. If you own energy exposure of any kind, the August deadline is the date on your calendar. A breakdown in talks means oil reprices overnight.

The sweeping October 2025 export controls — the ones requiring licenses for any foreign product containing Chinese-origin rare earths — are suspended until November 2026. If bilateral relations deteriorate, those controls snap back. Defense and EV supply chains would be hit hardest. Watch the Trump-Xi dynamic closely.

Four days from now, the Colorado Consumer Protections for Artificial Intelligence Act takes effect — the first real AI enforcement deadline on U.S. soil. If you're invested in AI companies deploying high-risk systems in employment, healthcare, or financial services, this is a regulatory canary in the coal mine.

U.S. oil stockpiles at Cushing, Oklahoma, have fallen below operational requirements to roughly 19 million barrels. If Hormuz flows don't normalize quickly or if the ceasefire breaks down, domestic supply tightness could create a sharp price spike — even as headline crude prices fall.

Markets are pricing a 63% chance of a rate hike in September. If June and July inflation prints come in hot, that probability climbs toward certainty. If you're long duration — bonds, growth stocks, leveraged real estate — September is your risk event.