WSB Is Freaking Out Over Warsh: 9 Fed Members Want Hikes and Reddit's Bond Nerds Are Actually Right This Time
New Fed Chair Kevin Warsh's hawkish debut sent 2-year yields surging 16bps and WSB into a full existential crisis
Ticker Ratings
| Ticker | Rating | Entry Price | Current | $ Gain | % Gain |
|---|---|---|---|---|---|
| SPY SPDR S&P 500 ETF TRUST | hold | $745.74 | — | — | — |
| KMX CARMAX INC | sell | $47.60 | — | — | — |
| RTX RTX Corp | buy | $192.87 | — | — | — |
| MU MICRON TECHNOLOGY INC | buy | $1095.95 | — | — | — |
| KLAC KLA CORP | buy | $251.15 | — | — | — |
| LRCX LAM RESEARCH CORP | buy | $394.68 | — | — | — |
| AMAT APPLIED MATERIALS INC /DE | buy | $623.25 | — | — | — |
| DELL Dell Technologies Inc. | buy | $427.68 | — | — | — |
| MRVL Marvell Technology, Inc. | buy | $307.98 | — | — | — |
| ARM ARM HOLDINGS PLC /UK | hold | $436.97 | — | — | — |
| WDC WESTERN DIGITAL CORP | buy | $756.74 | — | — | — |
| STX Seagate Technology Holdings plc | buy | $1118.00 | — | — | — |
| CME CME GROUP INC. | buy | $254.45 | — | — | — |
| INTC INTEL CORP | buy | $131.63 | — | — | — |
| MA Mastercard Inc | buy | $495.00 | — | — | — |
Reddit's investing communities are doing what they do best right now: collectively panicking with spreadsheets. The top-upvoted DD threads on r/investing and r/wallstreetbets this week are laser-focused on new Fed Chair Kevin Warsh's debut FOMC meeting — and for good reason. The man showed up, cut his policy statement from 341 words to 131, dropped all forward guidance, and let a dot plot do the talking: 9 of 18 FOMC members are penciling in a rate hike as the next move. The 2-year Treasury yield spiked 16 basis points to 4.20%, the S&P 500 dropped 1.2%, and the Dow cratered over 500 points. Cool first day, Kevin.
The Reddit consensus is gelling around a few trades. $SKX-level conviction on short-duration bonds given the yield curve flattening — 30-year yields actually fell while the front end exploded, suggesting the market believes Warsh's inflation-fighting credibility is real. Meanwhile, the Iran interim deal dropping WTI crude to ~$75/barrel and gas below $4/gallon nationally is giving Warsh a potential soft landing gift — if May was peak inflation, the hike cycle may never happen. That's the bull case. The bear case is core PCE at 3.3% (revised up from 2.7%) with a Fed that just told you employment is not their problem anymore.
Jeffrey Gundlach is already on YouTube telling anyone who'll listen that rates won't move until fall — WSB's options traders are pricing that in, but the unusual activity chatter is shifting toward October calls on rate-sensitive names. The rate-cut-or-die crowd had a rough week. Warsh didn't even submit a dot. The man is a swing vote and he's having fun with it.