1. Warsh has the Fed. It was the weakest Senate support for a chair since 1977.
The Senate confirmed Kevin Warsh as the 17th Fed chair on May 13 in a 54-45 vote, the weakest support for the role since it became Senate-confirmed in 1977 (the prior low was Yellen's 56 votes in 2014). Powell's chair term expired May 15; he keeps a Board seat, but Warsh now runs the FOMC. Inflation has run above the 2% target for more than five years, now compounded by tariffs and high oil prices. Markets see rates holding at 3.50 to 3.75% through year-end 2026. Warsh has signaled inflation-first discipline and "messier," more deliberative meetings, meaning less forward guidance and more meeting-to-meeting volatility on rate expectations.
Why you care: The chair sets the cost of debt under every LBO and leveraged acquisition. An inflation-first chair with no bias toward cuts changes how sponsor coverage underwrites returns and how leveraged finance desks size high-yield capacity.
Interview angle: "With Warsh prioritizing inflation discipline over cuts, acquirers are stress-testing models on more conservative financing assumptions. That compresses LBO returns and pushes sponsors toward equity-heavy structures or seller financing."