First meeting of the Warsh: a perfect storm for markets — oil, rates, and a historical pattern
Today, Kevin Warsh chairs his first Federal Reserve meeting as chairman. Markets approach this event in a state of extreme uncertainty: an oil crash, zero expectations for a rate cut, and alarming historical statistics create a perfect storm.
The main intrigue is Warsh's rhetoric. According to CME futures, the market is pricing in virtually no rate cut: the probability of maintaining the 3.50–3.75% range exceeds 97%. As analyst Brett notes, the chances of easing remain nearly zero until April 2027 and only rise to about 8% by December 2027. This is a hawkish signal: the Fed does not intend to loosen its grip in the near future.
Alarming Statistics: The Curse of a New Chairman
Analyst Bull Theory highlights a historical pattern: over the past century, with each of the 12 new Fed chairs, the S&P 500 index fell in the first 90 days of their tenure. The average drawdown was about 12%. Alan Greenspan posted the worst result with a 33% plunge, while Ben Bernanke had the best with just 2%. Under Jerome Powell, the first 90 days brought a 7% decline, and under Janet Yellen, a 4% drop. No new Fed chair has managed to avoid a drawdown, and now the 90-day countdown begins for Warsh.
The key question, as analyst Brett emphasizes, is "Warsh's independence." The market will closely watch whether the new chairman maintains autonomy in monetary policy or feels pressure from the administration. The tone and rhetoric of his first speech will largely determine market sentiment for the second half of the year.
Oil Crash and Risk for Commodity Assets
An additional backdrop is the sharp drop in oil. As noted by Coin Bureau, Brent crude has plunged about 15% and fallen below $78 per barrel—this marks the fifth consecutive losing session and the longest decline streak in 2026, as well as the lowest level since early March. The reason is the return of Iranian oil: tankers carrying over 2 million barrels are already exiting the Strait of Hormuz following a deal between the US and Iran.
Bloomberg Intelligence strategist Mike McGlone warns that oil, gold, and copper could end up in a losing position relative to US stocks. In his view, stock market volatility has remained suppressed for too long amid growing risks in commodity assets, and the boom in initial public offerings (IPOs), including SpaceX, could be a sign of a market peak—similar to how bitcoin ETFs served as such a signal in 2024.
McGlone rates the influence of the US stock market on the future movement of oil, gold, and copper as 10 out of 10. Cheaper oil reduces inflationary pressure, which could free the Fed's hands in the future. But for now, all three factors—weak oil, cautious rate expectations, and the alarming statistics of a Fed chair change—combine to create a tense backdrop in which Warsh's decision will become the main guide for markets.
My expert opinion: The historical pattern of drawdowns under new Fed chairs is not just a coincidence but a reflection of structural uncertainty. The market always "tests" a new leader's strength. Given the current macroeconomic risks and the oil crash, Warsh's first 90 days could be a serious test for risky assets, including cryptocurrencies. Investors should prepare for heightened volatility and possibly local lows that will open attractive entry points.