Don't Fight This Fed

Incoming Fed Chair Kevin Warsh inherits a highly divided Federal Reserve, with four policymakers already dissenting on interest-rate policy. Warsh favors deep rate cuts, but elevated CPI/PPI inflation and internal Fed divisions make policy easing difficult. The setup raises uncertainty around the path for rates and yields and could keep markets volatile.

Analysis

Incoming Fed Chair Kevin Warsh inherits a highly divided Federal Reserve, with four policymakers already dissenting on interest-rate policy. Warsh favors deep rate cuts, but elevated CPI/PPI inflation and internal Fed divisions make policy easing difficult. The setup raises uncertainty around the path for rates and yields and could keep markets volatile.