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Market Outlook

Today's Market

Summary

The imminent transition from Powell to Warsh as Fed Chair marks a fundamental regime shift, not just a continuation of current policy.

Warsh advocates aggressive balance sheet reduction and less reliance on forward guidance, signaling a stricter, rules-based anti-inflation strategy.

Markets have largely priced in a hawkish Fed pause, but equities remain complacent, ignoring the risk of a liquidity shock under Warsh.

The risk/reward profile is asymmetric: a hawkish surprise could trigger a sharp equity selloff, especially in long-duration and leveraged assets.

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Why This FOMC Meeting Matters

The FOMC meeting in late April will likely be uneventful on interest rates; however, it will by no means be irrelevant to the financial markets.

The Federal Reserve Board is generally expected

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPX, NDX either through stock ownership, options, or other derivatives.…