On May 18, 2026, the U.S. Federal Reserve officially entered the “Warsh era.” Earlier, on May 13, the Senate confirmed Kevin Warsh as Fed Chair by a 54–45 vote, succeeding Jerome Powell, whose term expired. Warsh will be sworn in on May 16. Widely seen as a hardline hawk, Warsh has long prioritized inflation suppression over employment, willing to tolerate short-term economic weakness if needed.

Expectations of Warsh’s tenure have already reshaped markets: the U.S. Dollar Index rose for five consecutive sessions, breaking 99.3, a late-April high; the 10-year Treasury yield climbed to 4.596%, a one-year-plus peak; U.S. equities pulled back from highs, with tech stocks correcting sharply; gold swung wildly, spot prices falling below $4,540/oz. Markets price in a more hawkish stance: the probability of a June rate hike rose to 65%, and expectations for cuts this year have all but vanished. Internal shifts reinforce the hawkish tilt: dovish Governor Milan announced he will resign before Warsh takes office, solidifying hawkish control. Prospects of tighter global financial conditions are rising, increasing capital outflow and currency depreciation pressures in emerging markets.