The Q - Daily Edition - 18/6/2026
New Sheriff in Town
“Well, we will be there, as I said earlier on, using full flexibility, but we are not here to close spreads. This is not the function or the mission of the ECB. There are other tools for that, and there are other actors to actually deal with those issues.”
— Christine Lagarde, ECB Governing Council press conference, 12 March 2020
I have a very early (07:30) appointment this morning, so I will just super-briefly leave few bullet point comments on yesterday’s premier of Kevin Warsh as new Fed Boss:
He’s a game changer
He is hawk. The market new it but chose to talk it down - until yesterday
Forward guidance is dead
He wants to shake ‘things’ up, having announced five task forces to work on the following into year end:
(i) communication;
(ii) the balance sheet/operating system;
(iii) alternative data sources;
(v) the inflation framework
Equities didn’t like it:
Bonds didn’t like it:
The Dollar loved it:
The one thing that has raised my eye-brow, though I could not confirm nor re-find the source, was a comment that Warsh did not care about short-term market movements due to his policy decisions, rather he is focused on long-term goals. This reminds me so much of ECB Boss Lagarde’s comments in 2020, her first meeting has head of that institution. The bond market quickly tested that resolve, which quickly dissolved.
Famous last words …
How many times did we hear that Kevin Warsh was the most hawkish of the possible candidates for the Fed chair, just then to be subsequently redressed as a dove once he was elected, mostly on the argument of “who would want to upset Uncle Donald anyway”.
Well, as the three day plot of the rate hike expectations into year end via Futures markets shows, adaption to reality was necessary, with expectation for hikes doubling:
Have a great Thursday!
André
Everything in this document is for educational purposes only (FEPO)
Nothing in this document should be considered investment advice
Investing real money can be costly; don’t do stupid shit
Leave politics at the door—markets don’t care.
Past performance is hopefully no indication of future performance
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