WS #7128

The dominant signal in this window is the Senate confirmation of Kevin Warsh as Fed governor (51-45 vote), with a separate vote for Chair expected Wednesday. This is corroborated by multiple sources (Seeking Alpha, Bluesky). Separately, FDA Commissioner Makary has resigned, with Kyle Diamantas named acting commissioner, creating near-term uncertainty for healthcare/biotech. The April CPI report showed a 3.8% annual increase (largest since May 2023), driven by energy prices surging 17.9% YoY. Markets now price a 37% chance of a Fed rate hike by year-end. The Iran war continues to drive energy prices and inflation higher, with the Strait of Hormuz closure persisting. Copper is defying the 'war discount' and nearing all-time highs on supply crunch. The yield curve has steepened, raising concerns about diversification benefits. The previous Iran conflict escalation narrative remains intact with no de-escalation signals. The Fed's April 29 statement maintained rates at 3.5-3.75%, citing elevated inflation from energy prices and high uncertainty.