Markets Take Warsh in Stride
Financial markets reacted calmly to President Trump’s nomination of Kevin Warsh as the next Fed chair, signaling confidence in his credibility and respect for Fed independence. Treasury yields were little changed, the dollar firmed modestly, and equities stabilized, while gold and silver plunged as fears of currency debasement eased. Investors broadly view Warsh as a hawkish, experienced policymaker whose criticism of quantitative easing reassures inflation-conscious markets. Still, some economists warn the current calm may fade if Warsh ultimately aligns more closely with Trump’s push for aggressive rate cuts.
Fed Hits Pause
The Federal Reserve held interest rates steady at 3.5% – 3.75%, pausing after three straight quarter-point cuts as officials cited stronger growth and a more stable labor market. The post-meeting statement signaled reduced concern about labor weakness relative to inflation, reinforcing expectations that further cuts are unlikely before midyear. Two Trump-appointed governors dissented in favor of another cut, while markets reacted calmly with Treasury yields edging higher. The decision comes amid heightened scrutiny of Fed independence and uncertainty ahead of Chair Jerome Powell’s impending departure.
Rents Hit New Low – Better Affordability
U.S. apartment rents fell again in January, with the national median down 1.4% year over year to $1,353, the lowest January level since 2022. Record-high vacancies and longer lease-up times reflect heavy new supply colliding with weaker demand from a softer job market and slower household formation. While construction is beginning to ease, lingering inventory continues to pressure landlords, especially in the South and Mountain West, where declines are most pronounced. Some markets, such as Virginia Beach, San Jose, and San Francisco, are still seeing rent growth, but the broader outlook hinges on whether demand can recover amid economic uncertainty.
As always, Base Wealth Management remains focused on aligning investment strategies with your long-term goals amid evolving market conditions.
