📉 Fed Shake-Up Could Flip the Rate-Cut Narrative
The man Donald Trump wants to lead the Federal Reserve might be the exact opposite of what markets are pricing in.
Kevin Warsh — tapped to replace Jerome Powell when his term ends May 15 — is known as a hardline inflation hawk.
Why markets are nervous:
• Former Fed governor (2006–2011) with a history of prioritizing inflation control over growth
• Wants to shrink the Fed’s $6.6T balance sheet
• That means selling bonds → higher yields → tighter financial conditions
📊 Translation:
Higher mortgage rates
Less lending
Lower corporate spending
Even if confirmed by the United States Senate, Warsh would still be just one vote on the Federal Open Market Committee — but leadership tone matters.
⚠️ Market takeaway:
If Warsh gets the chair, rate-cut optimism on Wall Street may need a serious reset.
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