We're 6 Weeks Away From a Historic Change at the Federal Reserve -- and It May Be the Tipping Point for a Pricey Stock Market
View original at nasdaq.comWe're 6 Weeks Away From a Historic Change at the Federal Reserve -- and It May Be the Tipping Point for a Pricey Stock Market Key Points Jerome Powell's second term as Fed chair will conclude on May 15…
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Warsh's potential appointment may represent the tipping point for a historically expensive stock market
60% confidenceKevin Warsh would prefer the central bank be a passive market participant, entailing selling off significant chunks of Treasury bonds and/or mortgage-backed securities
60% confidenceHis voting record strongly suggests he won't push for aggressive rate cuts
60% confidenceTrump has vocally criticized Powell and the FOMC for not being more aggressive in lowering interest rates
60% confidenceTrump prefers the federal funds rate be 1% or lower, compared with the current range of 3.50% to 3.75%
60% confidenceWarsh remained persistently skeptical of inflation and often advocated that interest rates remain elevated even as unemployment rose during the financial crisis
60% confidenceThe stock market entered 2026 at its second-priciest valuation since January 1871, according to the S&P 500's Shiller Price-to-Earnings Ratio
60% confidenceLower interest rates would make it considerably easier for the U.S. to service its ever-growing national debt and would reduce borrowing costs for businesses
60% confidenceRate hikes now seem more likely than rate cuts in 2026
60% confidence