A new era for the Fed? Looking back on Kevin Warsh's US Senate hearing & Market reactions

Today welcomed one of the final steps for Kevin Warsh to replace Jerome Powell as Chairman for the Federal Reserve – A process that initially was supposed to occur on May 15th.

However, the Trump Administration decided to spice things up with a Powell investigation that sent yet another wave of chaos in February.

But this is relatively small detail, but one that would annoy the President even more as the investigation would prevent Kevin Warsh's validation to pursue (check out the piece linked above to learn more).

The highly anticipated Senate confirmation hearing for incoming Federal Reserve Chair Kevin Warsh took center stage this morning, and Wall Street is now frowning.

Stepping into the spotlight amid a backdrop of high geopolitical volatility, Warsh delivered a mixed address that instantly sent ripples across asset classes and triggered a decent market pullback.

At the core of his testimony was a bold declaration regarding monetary policy: Warsh explicitly stated his desire to reform the Federal Reserve, with notable calls for a review on Forward Guidance (that he wants to drop entirely) and a new inflation framework.

Rejecting the policy complacency of recent years (showing his disagreement for post-COVID policy), he signaled a structural shift in how the central bank will measure and react to price stability – Warsh's toughest point of view is on the Fed's Balance Sheet, that he wants to see reduced heavily over coming years.

This would definitely not be as positive for Stock Markets.

For markets that have grown accustomed to a highly accommodating Fed, this was a decent reality check – Wall Street really loves Jerome Powell and his exit will be surely regretted by some.

Some tough questions, particularly from Senator Warren, on his swinging hawkishness, blasted the Fed Chair nominee – and he definitely dodged the answers.

Nevertheless, Warsh aggressively reinstated the narrative of strong Federal Reserve independence – but this one will have to be proven as he never really answered on disagreeing with the President and other similar questions.

Add to the lingering uncertainty with the Middle East, and the market reaction got quite decisive.

Equities took a decent hit as the reality of a more rigid Fed policy set in.

The Dow Jones Industrial Average led the intraday pullback, reflecting deep institutional caution as investors rapidly reassess the broader US economic outlook and a potential return to Middle East tensions.

With the critical April 22 US-Iran ceasefire deadline looming just hours away, Warsh's unyielding stance on inflation and institutional independence has thrown yet another puzzle for Participants to play around with.

Vice-President J.D Vance has been reported to travel to Pakistan tomorrow morning (providing a de-facto extension of the Ceasefire, if he really is departing).

What is sure, is that the easy money era has officially been put on notice.

Let's dive into the major movers of this busy, and quite risk-averse session

Discover:

• Fed's Warsh and Ceasefire-end triggers Market Double tops – Dow Jones and US Stock Market Outlook
• The Dollar is forecasting tougher times ahead – EUR/USD, AUD/USD & Dollar Index (DXY) overview
• Tesla (TSLA) Q1 2026 Earnings Preview: Is the ‘AI powerhouse’ narrative enough to offset waning auto demand?

Financial Markets are swinging more hawkish with the latest developments, but reactions have remained relatively restrained

WTI (US) Oil prices have grinded higher in recent hours but remain below the key $93 pivot.

The action in WTI remains stuck between $87 and $95 and should stay like that until Participants learn more on the Iran issue.

Metals are somehow quite offered in today's session, with drops of close to 3% around the board.

Looking at reactions in the US Dollar and other Markets, it could just be profit-taking on the dip-buying at key technical levels, supplemented by some angst regarding the Balance Sheet reducing.

Gold found pressure at $4,900 which got exacerbated by the 4H 200-period MA.

Don't forget to check out our recent XAU/USD and XAG/USD to spot trading levels:

• Metals in focus with Ceasefire uncertainty – Silver (XAG/USD) & Gold (XAU/USD) intraday outlook

The US Dollar caught a decent bounce during the Kevin Warsh hearing – hope that some of you explored our USD Analysis on time to catch the first leg.

Now retesting the 4H 50-period MA, the next move will be quite interesting (decent point for long entries on the USD, but watch out for volatile catalysts ahead).

Stock Markets are in the red today but the reactions are for now still broadly contained.

Be careful tomorrow as things should be rocky, particularly if the second round of US-Iran talks fail to materialize.

Don't forget to check out our Stock Market intraday analysis to learn more on fundamentals and technicals for the coming period ahead.

Safe Trades and keep track of the evolution of the conflict ahead!

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