At 11 PM tonight, Kevin Warsh officially takes over from Powell.

The key is that his background—and everything around him—is different: inflation has been rising for three straight months, tensions in the Middle East keep flaring up and shifting, and U.S. stocks remain under pressure at high levels. Rate cuts? The market no longer has any expectations for that.

How should we interpret this leadership change?

👉 Historically, whenever the Federal Reserve “changes hands,” the market is largely in a wait-and-see mode in the first quarter, and volatility often narrows instead. But the real “lock-in period” doesn’t start until 3 to 6 months later, when pullbacks often reach double digits.

👉 Warsh himself is a “balance sheet reduction” advocate. He has repeatedly and publicly criticized the Fed’s balance sheet as being overly “bloated,” opposed using quantitative easing as a long-term tool, and argues for managing inflation with a more rules-based monetary framework.

In tonight’s speech, he only needs to send one signal—namely, to keep pressure on inflation and not ease off on balance sheet reduction. Then risk assets will start pricing in greater uncertainty earlier.

Tonight, pay close attention to his wording; if his language leans even slightly hawkish, the big move could push lower again.
#沃什宣誓就任美联储主席