AJB Capital

Careful out there. We highlighted this spot on the VIX last week as the level to keep an eye on. The next level to watch is the 8-day on the FNGD. Above that, and trouble is returning.

Something changed in this market this week. Everyone's trying to figure out why.

The Fed has been buying roughly $40 billion a month in Treasury bills since December to front-load the liquidity drain that comes every year around tax season. Banks need to be liquid when all that cash goes out the door. The Treasury is issuing debt to meet its obligations. The Fed buys it so the banks don't have to.

As we got closer to tax day, the Treasury likely reviewed its numbers and realized it had excess cash. That excess doesn't just sit there. It finds its way back into the system.

The Treasury General Account started drawing down the week of April 1st. About $100 billion.

The Fed also announced it's keeping $25 billion of those monthly purchases going forward. Look at the balance sheet. It's growing. That's money printing.

Now think about where that excess probably ends up in this environment. Oil is volatile. Foreign markets are a mess. Geopolitics aren't improving. The money goes to the cleanest s

Happy Friday.

CPI came in at 3.3% annual, biggest jump in nearly two years. But look under the hood. That's almost entirely energy. The 0.9% month-over-month headline was driven by a 10.6% spike in energy costs. Core came in at 0.2% month over month. That's clean. The base economy is not overheating on its own. Services aren't spiraling. This is an oil story, not a broad inflation story, and the market is reading it that way. As long as core stays contained, the rate hike talk stays theoretical.

Consumer sentiment just dropped. Michigan preliminary for April fell 6% to its lowest since December 2025. Short-run economic outlook plunged 14%. Year-ahead inflation expectations jumped to 3.8% from 3.4%. Middle and higher income consumers with stock exposure got hit hardest. Two-thirds of the interviews were collected after the war started, so this is the first real read on how people are feeling with $4 gas and a war backdrop. Not great.

The bigger picture hasn't changed. Ceasefire is fragile.