The news rather slipped under the radar amid Donald Trump's state visit to China, Iran and AI, but the Fed has a new chair. Jerome Powell's term ended on Friday, and Kevin Warsh is therefore taking over. Or, more precisely, he is about to take over, since Warsh has not yet been sworn in, with Senate confirmation having taken place only last week. But that should now be a matter of days. Warsh is expected to chair the Fed's next meeting in June and lead the institution for the next four years. Let us hope he provides the same range of facial expressions as Powell, whose repertoire was always useful for illustrating otherwise rather dry articles with amusing photographs.

I am turning to Warsh this morning because, in investors' eyes, the Fed chair ranks among the most important people in the world. The Fed's decisions are crucial not only for the trajectory of the world's largest economy, but also for financial assets everywhere. When the Fed changes interest rates, it stimulates or slows consumption and investment, which ultimately affects inflation, growth and employment. And while it always takes several months for an interest-rate decision to work its way through the economy, known as the transmission lag of monetary policy, should you wish to impress at dinner parties, trading-room screens react far more quickly.

Markets respond constantly to central bankers' comments, trying to detect shifts in stance and recalibrating the odds of future rate moves. The Fed therefore sits at the heart of market life, and its chair carries immense responsibility.

Now, yes, I know you will tell me that my whole theory about the most important man in the world has not really held up since Donald Trump returned to power. I grant you, he gets the most airtime. And it is his decisions and remarks that move markets the most. But perhaps Kevin Warsh can reclaim the title once Donald Trump leaves the White House, in January 2029.

In any case, the relationship between the two men will be one to watch in the coming months. In January, Donald Trump appointed him to run the Fed. And we know the US president had one criterion: he wanted someone inclined to cut rates. That worked out rather well, since Kevin Warsh had argued during his campaign for further rate cuts on the basis of AI-related productivity gains, a debatable proposition. But Warsh takes office just as the Fed is facing a renewed bout of inflation. Inflation that has completely buried hopes of rate cuts. All the more so because the labour market remains fairly solid, contrary to the fears seen in late 2025. The current debate, as a result, is this: should the Fed raise rates again? One can already picture Donald Trump's furious posts about Warsh if the Fed were to tighten policy in the coming months. I will end by recalling that it was Donald Trump who appointed Jerome Powell as Fed chair in 2017, before turning him into his favourite scapegoat.

So we wish Kevin Warsh good luck, and it is a fairly safe bet that we will be writing about him often in the pages of MarketScreener. As he begins his term, he already has to contend with a global bond sell-off. Or, put another way, a rise in bond yields, which is the flip side of the same move. The world is betting on a return of inflation because of the conflict in Iran, and therefore on higher policy rates to counter it. Borrowing costs have climbed sharply across countries in recent days. The bond market is sending a distress signal, especially in the United States, where budgetary concerns had recently been pushed somewhat into the background, amid a few bombings and the construction of a ballroom or a triumphal arch. That is one reason equity markets struggled on Friday, particularly on Wall Street. It is worth noting, however, that the S&P 500 narrowly managed to secure a seventh consecutive weekly gain, taking its 2026 advance to 8.22%. Europe, which does not enjoy the same AI tailwind, fell over the week, reducing its 2026 gain to 2.5%.

What you need to know at the start of the week:

  • The summit between Xi Jinping and Donald Trump produced no major commitments, at least nothing that excited financial markets.
  • Taiwan's presidency reaffirmed the island's independence from Beijing. Taipei was not especially impressed by Donald Trump's lesson in realpolitik, after he described the $14bn arms sale to Taiwan as a "bargaining chip" with China.
  • In China, April industrial production and retail sales disappointed, even though investors had been encouraged by earlier indicators.
  • Brent crude is trading at around $110 a barrel, with no sign yet of a breakthrough over the reopening of the Strait of Hormuz. A drone strike near an Emirati nuclear power plant has added to the tension.
  • The WHO has declared an international emergency over the Ebola outbreak in the DRC and Uganda.
  • On the corporate calendar, all eyes will be on Nvidia's results on Wednesday. Investors will also be watching earnings from The Home Depot and Walmart, both useful gauges of US consumer spending.

On the macro calendar, there is little in the way of data this week, apart from PMI readings from the major economies on Thursday. G7 finance ministers and central bankers meet today and tomorrow, although this should not be Kevin Warsh's first test, since the Fed is sending its vice-chair, Philip Jefferson. Scott Bessent, the US Treasury Secretary, will be there.

Asia-Pacific markets are in the red. Japan is down 0.6%, Hong Kong 1.2% and Australia 1.4%. Losses are more modest in India, South Korea and Taiwan. Wall Street futures remain firmly in negative territory, a sign that the bond market's message is unsettling equity investors.

Today's economic highlights:

Today's agenda includes: in China, the House Price Index, Industrial Production, Retail Sales, and Fixed Asset Investment will be released; In Switzerland, the GDP Growth Rate QoQ Flash will be announced; In Italy, the Balance of Trade will be revealed; In the United States, the NAHB Housing Market Index and Net Long-term TIC Flows will be monitored. See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$4,536.37
  • Crude Oil (BRENT): US$110.72
  • United States 10 years: 4.62%
  • BITCOIN: US$76,618.1

In corporate news:

  • AstraZeneca and Roche Diagnostics Asia Pacific announced a collaboration to accelerate a sustainable ecosystem for advanced pathology in breast and lung cancer.
  • Vodafone Idea, a subsidiary of Vodafone Group, received a $500 million equity infusion from the Aditya Birla Group to reduce debt and compete with larger rivals.
  • Prudential agreed to acquire a 75% stake in India's Bharti Life Insurance for INR35 billion as part of its strategic repositioning in India.
  • Mercedes has not ruled out diversifying into the defense industry
  • ASML has signed a contract with the Indian company Tata Electronics to help build a semiconductor factory in India.
  • Intact Financial is reportedly considering a bid for Hiscox.
  • The Fed has ended disciplinary measures against UBS and Credit Suisse.
  • OHB has reportedly approached additional banks for a €1 billion capital increase, according to Bloomberg.
  • BP Plc will reduce its workforce in pipeline gas trading to focus on LNG.
  • Glenstone is considering a firm cash offer for Alternative Income REIT.
  • NextEra and Dominion Energy are reportedly in talks to create a $400 billion U.S. utility giant (according to the FT), with an offer of $76 per Dominion share (according to Bloomberg).
  • U.S. asset managers have released their Q1 2026 portfolio adjustments. Among them, Pershing Square (Bill Ackman) reports having sold Alphabet in favor of Microsoft.
  • The DOJ is investigating the valuations of a BlackRock private credit fund, Bloomberg has learned.
  • KKR is considering selling private club operator The Bay Club, according to Reuters.
  • Elliott has reportedly built a significant stake in Bio-Rad Laboratories, according to the WSJ.
  • Today’s key earnings releases: Orsted, Ryanair, Sonova…

See more news from UK listed companies here

Analyst Recommendations:

  • Persimmon Plc: Rothschild & Co Redburn maintient sa recommandation d'achat et réduit l'objectif de cours de 1700 GBX à 1400 GBX.
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  • Oxford Instruments Plc: Berenberg passe de acheter à conserver avec un objectif de cours relevé de 2700 GBX à 3000 GBX.
  • Bellway P.l.c.: Rothschild & Co Redburn reste à acheter avec un objectif de cours réduit de 3000 à 2400 GBX.
  • Barratt Redrow Plc: Rothschild & Co Redburn maintient sa recommandation d'achat et réduit l'objectif de cours de 460 GBX à 355 GBX.
  • Vistry Group Plc: Rothschild & Co Redburn maintient sa recommandation neutre et réduit l'objectif de cours de 465 GBX à 320 GBX.
  • Unilever Plc: Jefferies maintient sa recommandation de sousperformance et réduit l'objectif de cours de 4300 GBX à 3700 GBX.
  • 3I Group Plc: RBC Capital maintient sa recommandation de sousperformance et réduit l'objectif de cours de 2250 GBX à 2000 GBX.
  • Burberry Group Plc: Barclays reste à surpondérer avec un objectif de cours réduit de 14,50 à 14,10 GBP.
  • Ryanair Holdings Plc: Goodbody maintient sa recommandation d'achat et réduit l'objectif de cours de 32,25 EUR à 29,30 EUR.