Summary

• April’s CPI print hit 3.8% as gas prices surge, making rate cuts look unlikely ahead of Warsh’s expected confirmation as Fed chair this week.
• Warsh is set to inherit a divided Fed, with three officials publicly opposing an easing bias in the press release following the April FOMC meeting.
• Warsh favors trimming short‑term rates if AI‑driven productivity keeps inflation in check, alongside shrinking the Fed’s balance sheet and offering less forward guidance.
• This could mean three paths for stocks: Lower rates that favor growth, faster quantitative tightening that boosts financials, and less Fed guidance that benefits defensive names.
• SA Quant has identified three Quant-rated "Strong Buys" for each scenario, which showcase excellent fundamentals and impressive timeliness indicators.
• I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.

US Inflation Heats Up as New Fed Era Begins

Rising inflation is once again dominating headlines, with April's headline CPI climbing to 3.8% year-over-year. Gas prices in particular have surged as the war in Iran has shocked energy markets. This

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU 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. I have no business relationship with any company whose stock is mentioned in this article.

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