What Advisors Expect from the New Federal Reserve Chair 

Meet the new boss. 

Kevin Warsh was confirmed by the Senate earlier this month and officially sworn in as the 17th Chair of the Federal Reserve on Friday. He took the high-profile job amid a closely watched White House pressure campaign to ease interest rates, which in turn sparked an intense debate in Congress about Fed independence. That remains a question on the minds of many, especially as inflation has increased in recent months, but investment professionals aren’t overly concerned, according to a Dynasty survey of wealth management firms. Instead, advisors are coaching clients to stay focused on their long-term plans, even as Fed independence remains in the headlines. 

“Over the longer term, Warsh may introduce a subtle to moderate, dovish sway,” said Matt Wilson, portfolio analyst at Storen Financial. “Immediate or drastic changes are unlikely.”

A Hard Sell 

There’s a simple fact at the core of advisors’ sentiment: Inflation is well above the Fed’s stated target, while the job market remains solid. The market is no longer pricing in a high probability of multiple rate cuts in 2026, even with new leadership. Most advisors say the main driver of an additional cut opportunity would be a quick resolution of geopolitical tensions. Few see that as highly likely.  

“We must keep in mind that 12 officials vote on interest-rate decisions at any given time, and the chair is but one of those votes,” said Mark Doehla, portfolio manager at Great Diamond Partners. Despite political pressure to lower rates further, he sees a pragmatic and independent Fed taking no action for now. The central bank could even reverse course and raise rates later this year.

Other economic indicators also favor fewer cuts: 

• The US economy added 115,000 nonfarm payroll jobs in April, surpassing economists’ expectations and keeping the national unemployment rate at 4.3%. 
• The annual US inflation rate accelerated to 3.8% for the 12 months ending in April, marking the highest level since May 2023.

Where’s the Upside? Most advisors foresee higher volatility moving forward, but many also see upside opportunities for those who can hold the course, thanks to strong fundamentals and double-digit earnings growth for the S&P 500. “The most compelling opportunities appear to be in public and private infrastructure, particularly companies tied to AI supply chains and the broader power buildout,” said Tim Bartlett, chief investment officer of Unique Wealth. 

Brian Glenn, CIO at Premier Path Wealth Partners, likes domestic manufacturing, and within that, aerospace. “How can you not be wildly bullish on domestic manufacturing and on-shoring?” he asked. “There’s massive innovation taking place within the defense side of aerospace. There’s a 10-plus year backlog of commercial aircraft flowing through Boeing and Airbus.”