This Sunday morning, I can only think of one thing.
That's when most folks will read the headlines and think the Fed has a new boss. Kevin Warsh got confirmed on Wednesday, 54-45. The closest vote for a Fed Chair in history. Jerome Powell's term ended Friday. Clean handoff, right?
Wrong. And I think it's going to cost a lot of people a lot of money.
Here's what worries me. Powell isn't leaving. Not really. For the first time since 1948, the old Fed Chair is staying on the board. He keeps his vote. He sits at the same table as Warsh. They each get one vote out of twelve.
CNBC: “This Is the Big Market Event of 2026.”
CNBC called this new Elon Musk opportunity “the big market event of 2026.”
The New York Times predicted it “will unleash gushers of cash for Silicon Valley and Wall Street.”
And Elon Musk is predicting this investment could jump 1,000x higher from here.
That turns $100 into $100,000…
$500 into half a million dollars…
And a tiny stake of $1,000 into $1 million.
Simply put…
I get it. This sounds like inside baseball. But stay with me. Because the next Fed meeting is on June 16. And the math at that table is brutal for Warsh.
At the April meeting, four members already dissented. That's the most since 1992. Three regional Fed presidents said no to any signal of rate cuts. The Boston Fed president agreed with them. Now add Powell back in. Powell, who spent the last year fighting Trump on rates. He still has his vote. He still has his seat. He's not going anywhere.
I don't think most people realize what this means. Trump got his chair. He did not get his Fed.
The numbers don't lie. Inflation in April hit 3.8%. That's the highest reading since May 2023. Wholesale prices jumped 1.4% in a single month. That's not a typo. One month. Try cutting rates into that. Try selling that to four dissenters and a former chair sitting three feet away from you.
Paul Tudor Jones said it plain on CNBC this week. "Do I think he'll cut rates? No chance." He runs billions. He's been right about a lot of things over the years. He's not guessing.
And here's the part that should make every reader sit up straight. The 30-year mortgage rate this week is 6.52%. That's higher than the day Warsh was nominated. Higher. The whole point of a Trump-friendly Fed Chair was supposed to be cheaper money. Cheaper houses. Cheaper car loans. Cheaper credit for the small business down the street.
It's going the other way.
So why is the stock market acting like Christmas? The S&P closed Friday at 7,501. The Dow is back over 50,000. Wall Street is buying the story. The story being: new chair, new rates, party time.
I think they're wrong. And I think the wake-up call is coming June 17.
Here's the killer number. The market right now is pricing a 97.5% chance of no rate cut at the June meeting. Ninety-seven and a half percent. Even with Trump's hand-picked chair in the room. The traders who actually bet money on this stuff are telling you the truth, even while the headlines pretend otherwise.
It gets worse. The odds of a rate hike by the end of the year are around 30%. A hike. Not a cut. A hike. Read that twice.
Nobody knows for sure what happens next. I'll say that plain. The Fed could surprise us. Powell could vote with Warsh in some grand peace deal. Maybe inflation cools fast and the dissenters fall in line. Maybe.
But I'd bet against it. The dissenters have been loud. Public. On the record. They didn't take those stands to fold three weeks later. And Powell didn't fight Trump for a year just to roll over on his way out the door.
This is the part that sticks with me. The cameras will be on Warsh on June 17. The press conference. The new suit. The new gavel. And around that table will be eleven other people. Most of them think he's wrong.
One vote out of twelve.
That's all he has. One vote. The same as Powell. The same as the woman from Cleveland who's been saying no for months. The same as the man from Minneapolis. The same as the woman from Dallas. The same as the woman from Boston.
The headlines this weekend will say regime change. The reality is a paper tiger. Trump won the press conference. He didn't win the vote count.
I keep picturing it. A small room in Washington. Twelve chairs. A new chairman who promised one thing. A table full of people about to tell him no on live television. And a stock market that just closed at record highs because it believed the press release.
That's the moment I'm watching for. Wednesday, June 17. About 2 p.m. Eastern. If I'm right, a lot of paper wealth gets a haircut that afternoon. If I'm wrong, I'll say so.
More on this tomorrow.
— Lauren
Editor, American Ledger
