New Fed Chair Warsh inherits an inflation problem, making cuts impossible. The debate has pivoted to the timing of the next hike, a view reinforced by Waller. Warsh's first test is to scrub the easing bias from the statement and deliver a hawkish dot plot. De-anchoring inflation expectations are the primary risk, with geopolitical conflict providing a structural bid for oil. Expect a tactical pivot, not a strategic overhaul of the Fed's framework.

US/Iran escalation risk is acute into Memorial Day weekend. Hawkish DC rhetoric meets Iran's ability to activate proxies (Houthis, Hezbollah) in <3 days. The UAE nuke plant drone attack is the playbook for asymmetric strikes, putting a sharp, short-term bid under WTI. The only off-ramp is a diplomatic deal, possibly ceding Hormuz control to Iran as a 'tollbooth' in a mini-deal. This is the real 'finish the job' scenario, not total war.

New Fed Chair Warsh signals a hawkish pivot. The market's rate cut fantasy is dead; a hike is now on the table, driven by sticky inflation and elevated oil. Warsh's first job is to reset the statement to neutral and firm up the dot plot. Separately, the AI capex supercycle is the dominant structural theme. $800B in spending is driving double-digit earnings revisions, decoupling corporate profits from sluggish GDP. This is a powerful margin expansion story.