Fed leadership transition policy uncertainty

Moved from 2.1.2 0.52 ± 0.11 to 0.50 ± 0.11 - small -0.02 step on two factors. First, factual correction: Warsh's formal swearing-in is Friday May 22 at the White House, not "first Monday in office" May 18 as the 2.1.2 framing implied. The 2.1.2 narrative anchored on a substantive transition that had not actually occurred yet; the corrected timeline pushes Warsh-as-chair output past this refresh by a week. Second, the 10Y intraday pullback (4.601% close vs 4.61-4.63% intraday high) on the strike-cancellation flow takes some sharpness out of the "rate-path contradiction" pressure that drove the 2.1.2 tick-up. Width held at 0.11; the structural setup (Warsh dovish-tilt vs hot inflation backdrop) is unchanged, timeline of meaningful Warsh-as-chair output is shifted right. Beta(10, 10) encodes ~20 effective observations; the posterior on this thesis remains appropriately diffuse pending Warsh-as-chair output post-ceremony and the June 16-17 FOMC.

Powell completed his Fed chair-term exit Friday May 15 2026 with conciliatory final remarks: advised Warsh to "stay out of elected politics" and pledged to keep a low profile as a governor through his Board term to 2028. Senate had confirmed Warsh as Federal Reserve Chair 54-45 on Wednesday May 13 - the narrowest modern-era margin since the current approval process was put in place in 1977; Fetterman (D-PA) was the only Democratic crossover. Warsh's formal swearing-in ceremony is scheduled for Friday May 22 2026 at the White House - he is confirmed but not yet sworn in, contrary to the 2.1.2 framing's implication of a "first official Monday in office" on May 18. The 13-11 party-line Banking Committee advance, the prior 51-45 governor confirmation, and the 54-45 chair confirmation all stand as historically partisan Fed-Chair-track outcomes. Warsh confirmation-hearing framing - "won't be sock puppet" and "room to cut without inflation" - introduces a dovish-tilt risk. Friday May 15 delivered the sharpest rate-path repricing of the cycle: 10Y to 4.59%, CME FedWatch hike-by-December to ~56% from ~36% Thursday. Monday May 18 intraday extended to 4.61-4.63% before pulling back to a 4.601% close on the strike-cancellation flow - small net up from Friday but the global yields (German bund 15-year high, JGB 10Y 29-year high) remain elevated. The contradiction between Warsh's "room to cut" framing and the inherited backdrop (CPI 3.8%, PPI +6.0% YoY, imports +4.2% YoY, oil $108+, 10Y 4.60%) remains in place, but the substantive transition question opens later than previously framed: first Warsh-as-chair public statements come after the Friday May 22 White House ceremony, and the first Warsh-as-chair FOMC is June 16-17.