First Warsh Meeting: Oil Collapse, Historical Pattern, and a New Era for the Fed
Today, Kevin Warsh will chair his first Federal Reserve meeting as chairman. Markets approach this event in an extremely tense environment: amid an oil crash, historically alarming statistics, and nearly zero expectations for a rate cut. According to CME data, the probability of keeping the rate in the 3.50–3.75% range exceeds 97%. Analysts indicate that the chances of a rate cut remain nearly zero until April 2027, and only by December 2027 do they rise to about 8%.
Alarming Statistics and Pressure on the New Fed Chair
Analyst Bull Theory highlights a historical pattern: over the last century, under 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% crash, while Ben Bernanke had the best with just 2%. During Jerome Powell's tenure, 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 this 90-day countdown begins for Warsh.
The key issue highlighted by analyst Brett is "Warsh's independence." The market will closely watch whether the new chair maintains autonomy in monetary policy or feels pressure from Donald Trump. The tone and rhetoric of the first speech will largely determine market sentiment for the second half of the year.
Oil Crash and Risk for Commodity Assets
Adding to the backdrop is a sharp drop in oil. As noted by Coin Bureau, Brent crude has crashed by about 15% and fallen below $78 per barrel—this marks the fifth consecutive losing session, the longest decline streak in 2026, and 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, including SpaceX, could signal a market peak—similar to how Bitcoin ETFs served as such a signal in 2024.
McGlone rates the impact of the US stock market as 10 out of 10 in determining the future movement of oil, gold, and copper. 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 alarming statistics on the Fed chair change—combine to create a tense backdrop, where Warsh's decision will be the main guide for markets.
My expert opinion: The historical pattern of drawdowns during Fed leadership changes is not just a statistical anomaly but a reflection of fundamental uncertainty. Combined with the oil shock and hawkish rate rhetoric, Warsh's first 90 days could become a serious stress test for risky assets, including cryptocurrencies. Investors should prepare for heightened volatility and a reassessment of hedging strategies.