President Trump Threw a Wrench in Kevin Warsh's Plans as Federal Reserve Chairman, and It Could Be the Undoing of the Current Bull Market

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• Kevin Warsh's potential monetary policy moves at the Fed could be the undoing of the current bull market.

  60% confidence

• The Fed's balance sheet was reduced between 2022 and mid-2025 but is now creeping back up, standing at $6.7 trillion.

  60% confidence

• The rest of the FOMC is unlikely to be on board with Warsh's monetary policy plan, which requires committee-wide coordination.

  60% confidence

• The S&P 500 and Nasdaq Composite both now trade at all-time highs despite the Iran conflict and tariff-driven inflation.

  60% confidence

• Selling assets from the Fed's balance sheet will lower prices of long-term bonds and mortgage-backed securities, raising their yields and pushing long-term interest rates up.

  60% confidence

• Experts expect the CPI number to climb even higher in May 2026.

  60% confidence

• The Consumer Price Index climbed 3.8% year over year in April 2026.

  60% confidence

• Warsh may plan to mitigate balance sheet reduction impact by lowering the overnight federal funds rate, but getting the timing right is critical to avoid curbing job growth or spiking inflation.

  60% confidence

• Warsh might not be able to accomplish everything he envisioned at the start of the year due to soaring inflation driven by the Iran war and Trump's tariff policies.

  60% confidence

• Kevin Warsh's primary goal as Fed Chairman is to deleverage the Federal Reserve's balance sheet from $6.7 trillion down to $3 trillion.

  60% confidence

• Between 2008 and 2022, the Federal Reserve accumulated nearly $9 trillion worth of Treasury bonds and mortgage-backed securities.

  60% confidence

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