The Fed Board has formally designated Jerome Powell as chair pro tempore, confirming the transition to Kevin Warsh as incoming chair. Warsh, a former Fed governor and Morgan Stanley alumni, is broadly characterized as hawkish and skeptical of the Fed's post-GFC balance sheet expansion — a posture meaningfully different from Powell's data-dependent, gradualist approach. Markets had partially priced a more dovish trajectory under continued Powell leadership.

The key second-order question is how quickly Warsh moves to reshape the FOMC's rate and QT posture, and whether his confirmation signals a more aggressive inflation-fighting stance even if growth softens. Rate-sensitive sectors — utilities, REITs, long-duration tech — face the sharpest re-rating risk, while financials (steeper curve) could benefit. Watch for any Warsh confirmation hearing commentary or early FOMC dissent patterns as the primary catalyst.