Kevin Warsh Named Fed Chair, Bessent Sees Disinflation
SkimNews Take
The market's immediate repricing of rates reflects an expectation that a new Fed chair will prioritize inflation control over growth, even as supply-side pressures are expected to naturally ease.
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- Scott Bessent expects inflation to ease soon, citing a transient supply shock that will reverse as U.S. oil production continues.
- U.S. CPI rose 0.6% in April, with core CPI up 0.4%, putting 12‑month inflation at 3.8% overall and 2.8% core.
- Wholesale prices jumped 1.4% in April, raising the 12‑month level to 6%, the highest since late 2022.
- Kevin Warsh was confirmed by the Senate as the next Fed chair and will assume the role after Jerome Powell’s term ends Friday.
- Bond market hikes rates as Kevin Warsh assumes the Fed chair, according to MarketWatch.
Why it matters: Bond market’s pre‑emptive rate hikes as Warsh takes over will push yields up, raising borrowing costs for corporations and the Treasury, while Bessent’s expectation of disinflation will ease price pressures for consumers.
