April CPI came in at 3.8% year-over-year, the highest since May 2023.

Real wages went negative for the first time in three years.

And on May 13, the Senate confirmed Kevin Warsh as Fed Chair.

The man who spent a year calling for "regime change" at the Fed now has to run it with gasoline up 28.4% and the 10-year Treasury at 4.60%.

Energy drove more than 40% of the headline gain.

Gas averages $4.50 a gallon nationally.

Food at home jumped 0.7% in a single month.

Electricity is up 6.1% year-over-year.

And the most important numbers to households:

Paychecks grew 3.6%. And prices 3.8%.

Small gap on paper. Enormous at the grocery store.

He's been telegraphing this for a year.

He wants to shrink the $6.7 trillion balance sheet, kill the dot plot, and has floated cutting Federal Open Market Committee (FOMC) meetings from eight to four.

He's proposed a new Treasury-Fed Accord modeled on 1951.

His thesis for cutting despite 3.8% inflation:

AI productivity gains will do the disinflationary work.

That's the argument that justifies the rate cuts Trump hired him to deliver.

At least one FOMC member, Austan Goolsbee (Chicago Fed President), has publicly argued AI hype could cause actually more inflation, not less.

Warsh's first FOMC meeting is June 16-17.

Four members dissented at the April meeting.

Three of them didn't oppose the hold.

They opposed language implying the next move would be a cut.

A Fed Chair who campaigns for cuts and gets outvoted at his own table is a credibility problem with a microphone.

And complicating it further:

Jerome Powell isn't leaving.

He'll stay on the board as a rank-and-file governor through 2028, being the first former Chair to do so in over 70 years.

The first 90 days of Warsh is becoming a credibility test.

If he loses early FOMC votes (most observers expect he will), the bond market keeps pricing higher-for-longer, mortgages stay above 6%, and every public Warsh-vs.-FOMC split becomes a volatility event.

For households: the savings account pays 4%, but the grocery basket runs hotter. The mortgage you were waiting on doesn't get cheaper this summer.

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Bill Ackman just mass-purchased shares of one of the largest companies on Earth. He bought it at 21x forward earnings. That's basically the market multiple. For this company.

Your electric bill is climbing 61% faster than inflation. Now, guess which $1 trillion buildout is driving it — and guess who's not paying for it.

This company tried to buy e-Bay, with a "neither credible nor attractive" offer. The CEO says he'll take it directly to shareholders.

What are experts expecting for mortgages? A lot has changed since a war started. So much for the spring buying season.

President Trump had a two-day summit with Xi Jinping in Beijing last week.

That being the first presidential visit in nine years.

On his way to the plane, he said they'd made "some fantastic trade deals."

The White House framework: 200 Boeing jets, $17 billion a year in U.S. agricultural products, a new Board of Trade, a new Board of Investment.

China's summit statement mentioned none of it.

Beijing's readout talked about Taiwan and warned the U.S. "against overstepping."

A framework.

The bilateral boards are real, but they're a process, not an outcome.

The trade math is where it falls apart.

Trump says 200 Boeings;
China hasn't confirmed.

Trump says $17 billion in farm goods;
China hasn't acknowledged it.

The Council on Foreign Relations noted it was highly unusual for a U.S. readout to characterize what Xi said rather than letting the other side speak for itself.

Markets noticed.

Friday: S&P down 1.24%, Nasdaq down 1.54%, Dow down 1.07%.

The summit was also supposed to address the Iran war and the Strait of Hormuz.

The summit statements barely mention it.

China is buying discounted Iranian crude.

The U.S. wants that to stop.

Trump's readout claimed Xi opposes tolls on Hormuz and wants Iran denuclearized, which effectively restates China’s existing position as if it were a concession.

Boeing is the most direct exposure in both directions:

Transformational if the order is real. Painful if it's vapor.

U.S. agricultural exporters trade off any actual Chinese purchase confirmation.

A summit with zero outcomes is the opposite of what risk assets priced in last week.

The assumptions baked into the rally look generous.

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Berkshire Hathaway filed its first Form 13 (a quarterly report to the U.S.) under new CEO Greg Abel.

The Alphabet position went from 17.85 million shares to nearly 58 million in a single quarter.

But Google is just the loudest piece.

Abel used his first three months to purge the book: Amazon (full exit), UnitedHealth, Domino's, Visa, Mastercard, Aon, Diageo, and forty positions down to 26.

He also opened a new $2.65 billion stake in Delta Air Lines.

You don't triple a position in three months without conviction.

Berkshire built the Alphabet stake during the early-year sell-off, when retail was running scared over AI competition fears.

Abel bought in the Q1 window around $155-$170.

Apple (Berkshire’s $57.8 billion anchor), stayed flat.

After quarters of Buffett trimming, Abel stopped selling.

The exits tell a story.

Amazon gone. UnitedHealth gone.
Chevron slashed, with oil at $107.
Visa and Mastercard gone.

Fewer names, bigger positions, heavier tech.

Buffett spent the last decade diversifying.
Abel went the other direction immediately.

It's tempting to read this filing as a declaration. And maybe it is.

But it’s only one quarter.

The Alphabet buy happened during a drawdown that has since reversed.

The exits happened fast.
And when a new CEO dumps 15 positions in 90 days, the line between decisive and impulsive takes more than one filing to find.

What's clear is the shape: more concentrated, more tech-tilted, less diversified.

Whether that's vision or just the consensus trade with better branding depends on a few more quarters of data.

Berkshire didn't pay the all-time high for Alphabet.

The lesson lives in the timing.

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(by feargreedmeter)

Source: Stock Analysis