Regime Change
Submitted by Atlas Indicators Investment Advisors on June 30th, 2026
Regimes can only last so long. Eventually, wars, elections, or expiring appointments usher in change. Some changes are abrupt, and while it could be too early to tell, hints that the Federal Reserve is in the midst of a jarring transition right now are mounting. The first Federal Open Market Committee (FOMC) meeting with Kevin Warsh at the helm is now behind us. A global Wall Street met the new boss, Atlas was reminded of an old boss. Was The Who prophetic when they said, “meet the me boss, same as old boss?”
At the beginning of my career, Alan Greenspan was the maestro of America’s central bank. I can recall worrying at the end of his tenure that he was irreplaceable. As it turned out, Ben Bernanke managed just fine during a particularly challenging time (remember the Global Financial Crisis?) despite doing it differently. Transparency was something Ben brought to the craft of central banking, an idea continued by both of the next FOMC Chairs ,Yellen and Powell. Kevin Warsh, however, seems to be throwback to Alan Greenspan. Chair Greenspan was known for “Fedspeak,” a form of communication which was particularly unclear and open to interpretation. Greenspan once joked that if someone understood him, he “must have misspoken.”
It’s unclear how Chair Warsh will keep his messaging obscured, but the new Chair has argued that the Fed “talks too much.” He has been critical of the use of forward guidance and the dot plot (a chart anonymously plotting where FOMC members believe the Fed Funds Rate should be at the end of the calendar year). This could lead to more ambiguity and periods of quiet or possibly the type of obfuscation used by Chair Greenspan.
Markets could be facing a fog machine as it waits for the new regime to warm up. Who Kevin Warsh ends up being as FOMC Chair is keeping the audience (both market participants and the press) anxiously waiting. Time will tell if he speaks between songs or not. If he remains mum, however, markets may prefer his silence to the distorted guitar feedback used by Chair Greenspan.
