Jerome Powell's second term as Fed chair expired Friday, and if you're wondering what that means for your mortgage rate, your savings account, or your retirement plans—buckle in. Because the new guy just walked into one of the ugliest inflation environments in recent memory, and the bond market is already telling us how this story ends.

Kevin Warsh was confirmed by the Senate on May 13 in a 54 to 45 vote—the narrowest margin for a Fed chair since 1977. That alone tells you something. Warsh told the Senate Banking Committee he wants "regime change" at the Fed, including changing how the central bank measures inflation. Strong words. But the data he's inheriting doesn't care about rhetoric.

Here's what's waiting for him: CPI hit 3.8% in April, the highest since May 2023. PPI came in at 6%, with wholesale gasoline up a staggering 15.6% in a single month. Core CPI is at 2.8%. None of this screams "transitory."

And the bond market? It's already moved. The 30-year Treasury yield is at its highest level since May 2025, approaching territory we haven't seen consistently since before 2008. Traders are fully pricing in one Fed rate hike by March 2027, with more than a 50% chance rates rise before the end of 2026. Read that again: the market thinks the Fed's next move is a hike, not a cut.

Bank of America's Aditya Bhave said it plainly on May 8: "The data simply don't warrant cuts this year. Core inflation is too high, and moving up." BofA now forecasts no rate cuts until July 2027—revised from September 2026. JPMorgan's Michael Feroli goes even further: zero cuts in 2026, and the next move being a 25 basis point hike in Q3 2027.