Managing Editor’s Note: One of the most consistently accurate analysts in our business is sharing a warning about the AI-driven bull market in stocks. Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, is saying 2026 could repeat the situation that triggered the end of the dot-com boom.
The implications are clear… No investor would be left unscathed.
For more on what’s coming, automatically RSVP here for an upcoming event where he and our colleague Jeff Brown break down the threat… and the big profit opportunity hiding inside it.
For the fifth time in 30 years, the leader of the world’s most powerful economic institution is about to change.
President Trump nominated former Federal Reserve insider Kevin Warsh, who previously served on the Fed’s Board of Governors from 2006 through 2011, to replace Jerome Powell as the Fed’s chairman. Powell’s term is supposed to expire next month.
Warsh is spending this week on Capitol Hill before the Senate Banking Committee as part of his confirmation hearing.
Warsh came under fire over his ability to make decisions on monetary policy without interference from President Trump… who is demanding that Warsh cut rates immediately upon taking office.
And then there’s the question of his vast personal wealth, which tops $100 million – making him the wealthiest Fed chair if confirmed.
The stakes are already running high with a regime change coming to the Fed. And if history is any guide, the new chair may usher in a period of volatility, no matter what…
Turnover and uncertainty at the most important central bank in the world are certain to cause unrest among investors.
And history shows that new Fed chairs frequently encounter outright crisis upon taking office… whether it’s of their own making or not.
Alan Greenspan took over months before 1987’s Black Monday stock market crash that saw the Dow Jones Industrial Average fall over 20% in a single day.
Ben Bernanke took the Fed helm as the housing market peaked just ahead of 2008’s financial crisis. Likewise, Jerome Powell’s first year in office culminated in the S&P 500 briefly dropping into a bear market.
The prospect for another jump in volatility is greater than ever as Warsh looks to take control of the Fed.
That’s due to numerous challenges facing a new chair. The economy is staring at the worst stagflation crisis since the 1970s, with the labor market stalling while inflation pressures are building.
At the same time, debt-to-GDP stands at over 120%. And the U.S. government is facing a wall of debt maturities this year that must be refinanced. Approximately $10 trillion in Treasuries will mature this year, which is about a third of all outstanding debt.
In addition to refinancing existing debt coming due, current projections point to another $2 trillion in new borrowings to fund the federal budget deficit.
The collision of economic concerns and fiscal challenges is setting the stage for another jump in volatility for a new Fed chair… and I believe one market in particular will be ground zero.
Investors may associate stock market volatility with the ascension of a new Fed chair, especially given the cases of Greenspan and Bernanke.
But I’m predicting that Warsh will become a trigger for a spike in bond market volatility.
During his confirmation hearing, Warsh did a masterful job at dodging questions around interest rate policy and how he will manage the Fed’s balance sheet.
Investors don’t like operating in the dark, especially when it comes to the outlook for monetary policy. And there’s plenty to be worried about.
The combination of rising inflation pressure from Trump’s trade policy and the war in the Middle East, along with the dismal state of public finances, could upend bond markets.
Longer-dated Treasury bonds are already trading in an ominous pattern that I shared with subscribers of One Ticker Trader. Warsh-induced uncertainty is the exact thing that could send bond markets into a panic.
You should expect that to have a spillover impact on everything from stocks to crypto and currencies. After all, the bear market in 2022 stemmed from a jump in bond yields and is a preview of what could lie ahead.
That’s why I prepared a special briefing to cover the turmoil at the Fed… and the one ticker I think will be at the center of the profit opportunity for traders like us.
If you’d like to watch my briefing – and have the chance to get in on my next trade – then simply check it out right here.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
