Kevin Warsh, a former Fed governor and longtime critic of loose monetary policy, is taking over as Fed Chair at a moment when inflation has proven stickier than consensus expected and the White House has been vocal about wanting lower rates. Warsh's academic and public record leans hawkish — he dissented against QE2 in 2010 and has repeatedly warned about the Fed's balance sheet risks — which sets up a genuine tension between his instincts and the political environment he's stepping into.

The key second-order question is whether Warsh capitulates to political pressure and pivots dovish (delivering the rate cuts the administration wants) or leans into his hawkish convictions and tightens financial conditions further. Rate-sensitive sectors — homebuilders, regional banks, long-duration tech — are the clearest expression of this uncertainty, and the dollar and front-end rates will be the first movers on any signals Warsh sends in early testimony or press conferences.