There were no surprises or sudden twists. Today, the United States Senate confirmed Kevin Warsh to the Federal Reserve Board of Governors, paving the way for him to take one of the most important positions in the global financial architecture, and potentially even the role of Federal Reserve Chair. Markets had largely priced in this scenario in advance, so the decision itself did not trigger a strong reaction, but its significance becomes more evident in the broader macroeconomic and inflationary context.
Warsh steps into a key role at a time when CPI inflation in the United States has re-accelerated and reached its highest level since 2023. This materially shifts the market narrative, as only a few months ago investors were largely convinced that inflation was steadily returning toward target and that room was opening for monetary easing. That scenario has now been pushed further into the future, forcing markets to once again confront the risk of interest rates remaining higher for longer.
From a market perspective, this marks a return to an environment where the cost of money remains one of the central drivers of asset valuation. Higher inflation combined with a potentially more dovish stance from the new Fed leadership could weigh on risk appetite, particularly in segments most sensitive to discount rates and future cash flows, such as technology stocks. In this setup, concerns are rising that the Fed could ease policy too quickly despite persistent inflationary pressures, which would undermine the credibility of the disinflation path.
An additional factor increasingly being priced in by markets is the question of Warsh’s independence and his relationship with the political administration. Investors are concerned that he may be more inclined to align with the expectations of the White House and Donald Trump in the Fed’s decision-making process, which could potentially weaken the traditionally high degree of central bank independence in the United States. Such a risk affects not only the direction of monetary policy, but above all its predictability, which is crucial for asset pricing.
Against this backdrop, the key issue is no longer only the pace of the Fed’s response to inflation, but also the degree of autonomy it will maintain in the new political environment. Markets are entering a phase in which macroeconomic data, particularly inflation and interest rate expectations, are once again the primary source of volatility, with the leadership change at the Fed only amplifying this dynamic.
Daily Summary: Wall Street Under Pressure After Highest Inflation Reading Since 2023
BREAKING: U.S. CPI shows persistent inflation pressure! Dollar Strengthens After Data Release!
📉 EURUSD down 0.3% ahead of April’s inflation
🟡Chart of the Day: Gold Slides Ahead of Inflation (12.05.2026)
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
