About this episode
Today's Post - https://bahnsen.co/4w7lcrl
The episode focuses on the Federal Reserve as Jerome Powell’s chair term approaches its May 15, 2026 end and President Trump’s nominee, Kevin Warsh, nears confirmation. The main hurdle had been a DOJ criminal investigation into alleged cost overruns at the Fed building renovation, which Senator Thom Tillis and other Republicans cited as grounds to pause Walsh’s nomination; the attorney general later dropped the criminal probe and referred the matter to the Fed inspector general, clearing the way for Senate Banking Committee action and a full Senate vote. Prediction markets and fed funds futures quickly repriced, with the probability of no rate cuts this year falling to about 62% and a meaningful chance of one cut remaining. David expects Warsh to argue oil is a supply shock outside monetary inflation, prioritize labor-market risks, and pair any rate cuts with tighter balance-sheet policy and reduced QE to improve price discovery and long-run market credibility.
00:00 Fed Returns to Spotlight
01:58 Powell Replacement Timeline
03:20 DOJ Probe and Senate Standoff
04:37 Investigation Dropped Breakthrough
06:52 Markets Reprice Rate Cuts
08:06 Forward Guidance and New Chair Uncertainty
10:43 Warsh Case for Cutting Rates
12:24 Balance Sheet Over Fed Funds
14:02 QE Exit and Fiscal Discipline
16:18 Market Credibility and Reform Hopes
18:18 Wrap Up and Next Week Preview
Links mentioned in this episode: DividendCafe.com
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