Fed Hawkish Shift: Warsh $6T QT Confirmed, Yields Spike & Inflation Dissent
Key Questions
What was the FOMC's recent decision on rates?
The FOMC held rates at 3.5-3.75% with an 8-4 dissent vote. Cut odds remain low amid inflation concerns.
Who is pushing for rate hikes and why?
Kashkari is advocating hikes due to oil prices and inflation pressures. The Fed is shifting focus to potential hikes.
What leadership changes are anticipated at the Fed?
Powell may be out by May 15, with Warsh eyed as next chair amid balance sheet tensions. Historical transitions have led to S&P drops.
How do historical Fed chair changes impact the S&P 500?
96 years of data show S&P crashes following new Fed chair announcements. This complicates the current market path.
What data releases complicate the Fed's path?
Upcoming ISM Services and JOLTS reports add uncertainty. Bond yields are rising as oil threatens inflation ahead of the jobs report.
Warsh $6T bond sell-off May15 confirmed amid FOMC hold/dissent (Kashkari hikes oil/CPI), 10y4.41%+/30y>5% surge/Treasury supply $189B; Costa PCE critique, weak jobs 53k pressures stagflation path.