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President Trump announced Kevin Warsh as the next Fed Chair this morning.

I must be blunt: I did NOT see Warsh coming as the Fed Chair. His entire career he’s been hawkish. Indeed, once he left the Fed in 2017, he’s launched some of the most scathing attacks on the Fed of any public official.

Some comments of note:

• Fed officials should not be treated as “pampered princes.”
• The Fed frequently comments on “matters outside its remit” which has led to “systemic errors”
• Quantitative Easing (QE) is “reverse Robin Hood”, i.e. stealing from the poor to give to the rich. He’s constantly criticized monetary easing and the Fed.

Given that the Trump administration has made it clear it wants the Fed to ease monetary conditions, Warsh is an odd choice. I assume the President made this pick based on his usual criteria: loyalty over alliance to the President’s goals.

The markets are certainly confused by this pick. The USD initially jumped on the news and is now trading sideways as traders digest the implications of a Warsh-led Fed.

(Click on image to enlarge)

Stocks are down ~1% of so, but gold and precious metals are getting liquidated. Gold is down over 4% while silver is down 13% in the overnight session. This was the move I was concerned about and which I address to clients in yesterday’s weekly market update.

The larger question is what Warsh means for risk assets. For certain stocks were due for a pullback. For one thing major lows that trigger 10%+ rallies in stocks usually feature at least one 90% Up Volume Day (when 90% or more of the total trading volume on a given day is attributed to stocks that closed higher) or at least several 80 UVOL days.

The move from the November lows has seen only ONE 80% UVOL on November 21^st, 2025. Put simply, there was little to no MAJOR demand underlying the stock market run from the late November lows.

Moreover, high yield credit, which usually leads stocks, had already rolled over and was about to break below its 21-EMA. This was a major signal that risk assets were due for a correction.

Breadth also was overextended and looked ready for a backtest of its recent breakout.

Put simply, multiple signals were in place that it was time for the markets to correct and wipe out some froth.

In this context, the #1 question for investors is whether the bull market is about to end and it’s time to “sell the farm” … or if what’s coming is another opportunity to “buy the dip”.

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