Warsh Drops the Hammer: New Fed Chair's First Move Sends 2-Year Yields Spiking 16bps and Wall Street Into a Tailspin

Kevin Warsh walked into his first FOMC meeting and immediately flipped the table. Rates held at 3.5–3.75%, sure — but that's where the comfort ended. His policy statement shrank from 341 words to 131, dropped the employment mandate entirely, and closed with the chilling phrase: 'the committee will deliver price stability.' Nine of 18 members penciled in at least one rate hike, the 2-year Treasury yield spiked 16 basis points to 4.20%, and the S&P 500 shed 1.2%. Bloomberg's coverage called it a 'hawkish debut.' Jeremiah Babe called it a Dow-plunging catastrophe. Graham Stephan called it a 'massive reset.' They're all basically right.

Meanwhile, the US-Iran interim deal reopened the Strait of Hormuz, sending WTI crude down 2.6% to ~$75/barrel — the first time gas fell below $4/gallon since March. On the bright side, Senator Hagerty sees falling energy prices as deflationary cover for the Fed. On the less bright side, Trump apparently admitted the US was weeks away from running out of oil reserves when the deal was struck. Cool, cool, totally fine. Over in semiconductors, $INTC is getting a Cramer boost on agentic AI CPU demand, while Felix & Friends are screaming about a software stock 'powder keg' with $24 billion in short positions ready to detonate.

The Warsh era isn't a pivot — it's a personality transplant, and the market is still figuring out what that means for its therapy bills.