Trump Finally Got His Fed Chair 🏦

Welcome back to the Day Trading newsletter 📈

The Senate handed Trump his Fed chair Wednesday (by a single vote), and on the same afternoon wholesale prices posted their hottest annual reading since 2022.

Tech still ran (Nasdaq +1.2% to a record 26,402), but the bond tape is signalling that Kevin Warsh's honeymoon is about to be very short.

Let’s get into it 👇️ 

💵 Wholesale prices surged 1.4% in April, almost triple the 0.5% consensus and the hottest monthly print since 2022, pushing the annual PPI rate to 6%. Core PPI rose 1% on the month versus 0.4% expected, with services up 1.2% (the biggest one-month services gain since March 2022) and trade-services prices up 2.7%, a clear sign tariffs are starting to bleed through. Energy goods drove more than 40% of the headline jump, led by a 15.6% surge in gasoline.

💰️ Cisco ripped roughly 15% in after-hours trading Wednesday after reporting fiscal Q3 revenue of $15.84 billion (+12% YoY) versus the $15.56 billion consensus and adjusted EPS of $1.06 versus $1.04 expected. Networking revenue jumped 25% to $8.82 billion, and management raised the full-year AI-infrastructure and hyperscaler order target to $9 billion from $5 billion, with year-to-date AI orders already at $5.3 billion. It's the cleanest read yet that the hyperscaler capex boom is washing through the networking layer, not just GPUs.

🏦 SoftBank booked a $46 billion yearly gain at its Vision Fund, with nearly $45 billion of that tied to its OpenAI stake (about 98% of the fund's full-year return). OpenAI's valuation jumped from $157 billion last October to $852 billion by March, a roughly 5.4x move in five months. SoftBank has committed more than $60 billion to OpenAI for an estimated 13% stake. The mark is a stunning win, but it leaves Masayoshi Son's flagship fund effectively a single-name bet.

🇨🇳 President Trump landed in Beijing late Wednesday and opened a two-day summit with Xi Jinping on Thursday morning. It was the first visit by a sitting US president to mainland China in nearly a decade. On the agenda: a tariff-truce extension (Kalshi puts odds at 81%), a potential Chinese soybean buy (79%), Taiwan, Iran, AI-chip exports, and rare earths. Tesla's Elon Musk, Apple's Tim Cook, BlackRock's Larry Fink, and Boeing's Kelly Ortberg are traveling with the delegation.

📃 The Senate Banking Committee began its long-awaited markup of the CLARITY Act Thursday morning, ushering in the first comprehensive US regulatory framework for digital assets. Members filed more than 130 amendments ahead of the session, 44 of them from Sen. Elizabeth Warren (D-Mass.), but most are expected to fail and the bill is widely expected to advance to the full Senate. CLARITY divides crypto oversight between the SEC and CFTC and would resolve years of jurisdictional gridlock for Coinbase, Robinhood, and Circle.

🔻 Bitcoin slipped to roughly $80,500 and Ethereum dropped about 2.8% to $2,274 on Wednesday as the hot CPI killed near-term rate-cut hopes and yields ripped higher. BTC's market cap is back near $1.33 trillion, with spot ETF flows running net-flat into the Senate Banking markup. Traders are now leaning on the CLARITY Act markup and any signal from Trump's Beijing trip on US-China crypto-tech coordination as the next leg for the trade.

🛢️ WTI crude settled around $102 a barrel and Brent near $108 on Wednesday, snapping a three-day rally as Iran-ceasefire optionality and a stronger dollar took a bite out of the geopolitical premium. The IEA warned the same day that global observed oil inventories fell at a record pace of about 4 million barrels a day in March and April, with summer demand still ahead (meaning the supply cushion is thinner than the headline pullback suggests). The Strait of Hormuz remains effectively closed.

The Senate confirmed Kevin Warsh as the 17th chair of the Federal Reserve on Wednesday afternoon by a 54-45 vote (the slimmest margin for a Fed chair confirmation since the Senate's advice-and-consent role was added in 1977).

Sen. John Fetterman (D-Pa.) was the only Democrat to cross the aisle.

Warsh, 56, replaces Jerome Powell, whose term as chair expires Friday, and his first FOMC meeting as chair is scheduled for June 16-17. 

The vote is the most partisan confirmation in Fed history and a major test of the central bank's political independence after months of public pressure from Trump for rapid rate cuts.

Warsh inherits a Fed that is being asked to cut into the teeth of accelerating inflation. April CPI came in at 3.8% YoY on Tuesday (the highest since May 2023) and April PPI on Wednesday morning printed +1.4% MoM and +6.0% YoY, the hottest wholesale read since December 2022.

Markets have now wiped out the rate-cut bets that drove the early-year rally: CME fed-funds futures put the odds of any cut through year-end at near zero, while the probability of a rate hike by December has climbed to roughly 39% after the PPI shock.

Warsh has spent the past three years arguing the Fed was "too loose for too long," which makes the gap between what Trump wants (cuts) and what his own pick is likely to do (hold, possibly hike) the single biggest macro story heading into summer.

What to watch: 

• Warsh's swearing-in this Friday. Any first-day public comments (even a single phrase like "data-dependent" or "vigilant on inflation") will move the curve.

• The June 16-17 FOMC meeting and the new Summary of Economic Projections (SEP), which is the first official read on where Warsh's Fed thinks rates and inflation are headed

• Whether Trump publicly attacks Warsh if the chair holds the line; and the 10-year Treasury, which closed Wednesday at 4.49% (its highest level since July 2025). A push above 5% on the 10-year would put equity multiples under direct pressure for the first time this cycle.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.