Summary

• Kevin Warsh’s appointment as Fed Chair signals a potential ideological and methodological shift in monetary policy and inflation measurement.
• Markets have abandoned expectations for rate cuts, now pricing in hikes, with the Fed expected to hold rates at 3.5–3.75%.
• A switch to the Dallas Fed Trimmed Mean PCE could make inflation appear closer to target, impacting policy stance and asset valuations.
• Warsh’s first FOMC meeting will focus on dot plot projections, communication changes, and possible internal dissent amid inflation driven by energy shocks.

Executive Summary

I've also read the same Federal Reserve (Fed) articles most of you have likely read over the last several days.

Kevin Warsh will be hawkish. Warsh won't cut. Warsh may begin [QT] again. Warsh may change how it

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPX, NDX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.