Continued from Issue 19 · May 15, 2026 — Warsh confirmed. Minutes released. Oil pulled back. Here's everything that moved in the last 11 days.
The transition is complete. On May 13, the Senate confirmed Kevin Warsh as the next Federal Reserve Chairman in a 54–45 vote — the closest, most divisive confirmation of a Fed chair in the modern era. On May 22, he was sworn in at the White House by Supreme Court Justice Clarence Thomas, with President Trump in the room. Jerome Powell, for the first time in nearly 80 years, remained at the Fed as a sitting Governor. A new chapter has opened — one whose first pages are already being written by forces neither man fully controls.
Warsh, 56, is a former Fed Governor (2006–2011) and long-time critic of the Fed's forward-guidance model. In his first public remarks as Chair, he called for a "reform-oriented Federal Reserve" and said he was committed to institutional independence — directly addressing fears that Trump would use the appointment to direct rate policy. He argued that inflation can fall while economic growth stays strong, a view markets are watching closely for signal versus aspiration. He did not discuss rates with Trump, he said. Trump's instruction from the podium: "Don't look at me, don't look at anybody." His first FOMC meeting as Chair is June 16–17.
The political backdrop of the swearing-in ceremony was notable. Trump's lengthy East Room remarks underscored the political pressure on the institution, even as Warsh went out of his way to emphasize independence. Warsh's confirmation was confirmed on the same day the Dow closed at a record high — a sign that markets, at least initially, view him as a stabilizing rather than destabilizing force. But bond yields rattled upward as the ceremony concluded, with the 10-year Treasury holding at 4.558% into the holiday week — a reminder that the bond market will set the terms, not the ceremony.
"This isn't what he signed up for. But incoming Fed Chair Kevin Warsh can thank the nearly three-month Iran War for fueling the hot mess rising from the surprisingly deep hawkish shift among U.S. central bankers."
— TheStreet, May 21, 2026 · On the FOMC minutes releaseWarsh inherits a committee already moving — and moving in a direction he may not prefer. Just one day before his swearing-in, the Fed released the minutes from the April 29 FOMC meeting, which revealed the depth of hawkish sentiment inside the building. David Russell, global head of market strategy at TradeStation, told Reuters: "Rate hikes are back on the table. The committee is getting more hawkish as Kevin Warsh joins." Warsh campaigned on lower rates and a smaller balance sheet. He will chair a committee that is debating rate hikes.
The April 29 FOMC meeting minutes, released May 21, revealed a committee significantly more alarmed about inflation than the public statement suggested. The headline 8–4 vote to hold was already historic. The minutes showed the internal conversation was even more pointed. Here is what the committee actually said:
Warsh's first FOMC statement language will be the most scrutinized Fed communication in years. Does he keep the "easing bias"? Does he strip it? Does he introduce new language about the neutral rate? Whatever he says on June 17 will set bond market expectations for the rest of 2026. The spread between his stated philosophy (lower rates, less guidance) and his committee's revealed preference (hike discussion, strip the bias) is the most important gap in monetary policy right now.
The 30-year fixed rate hit its highest weekly average since late March, climbing to 6.51% in Freddie Mac's May 21 survey — up 15 basis points from 6.36% the prior week. Daily trackers showed even sharper moves, with Mortgage News Daily pegging the 30-year at 6.65% on May 22, and Bankrate at 6.70% today. Zillow's daily figure for May 26 shows 6.46%, a partial recovery as oil prices pulled back over the long weekend.
The 10-year Treasury yield at 4.558% is the root cause. The CPI shock of May 13 pushed yields sharply higher, and they have not retreated meaningfully despite the partial ceasefire optimism. MBA forecasts the 30-year to hold near 6.50% through year-end 2026; Fannie Mae is slightly more optimistic at 6.30%. Both are holding above every rate expectation set at the start of the year.
Brent crude fell more than 5% last week and stands at ~$97.94/barrel today — down roughly 9% from its peak a month ago, though still more than a third above pre-war levels. Oil is the fastest path to lower mortgage rates. Every sustained $10 decline in Brent tends to reduce inflation expectations enough to pull the 10-year yield 8–12 basis points lower — which flows directly into mortgage rates within 2–4 weeks. If peace talks advance meaningfully, the rate relief could arrive quickly.
Over the holiday weekend, President Trump posted that negotiations with Tehran were proceeding in an "orderly and constructive manner" — but that he had instructed officials "not to rush into a deal." Secretary of State Marco Rubio said Thursday there were "good signs" that an agreement to end the conflict is in sight, while cautioning any deal would be "unfeasible" if Iran pursues measures to permanently control shipping through the Strait of Hormuz. The central sticking points remain Iran's enriched uranium stockpile and Strait of Hormuz transit terms.
Oil fell more than 5% on the week on those peace signals — Brent posting its biggest weekly decline since the initial ceasefire in April. But two structural risks keep a floor under prices. First, the International Energy Agency warned this week that oil markets could enter a "red zone" by July as global stockpiles deplete and summer travel demand accelerates. Second, even in a best-case peace scenario, analysts at Coface estimate oil prices are unlikely to fall sharply or immediately — projecting crude hovering near $100/barrel through the end of summer, with more meaningful price relief taking 3–6 months to materialize.
"Both sides must take their time and get it right. We don't want a deal that falls apart in three weeks."
— President Trump, social media post, May 25, 2026For the housing market, the oil trajectory matters more than the political statements. The key threshold: if Brent sustains below $90/barrel for two consecutive weeks, expect the 10-year yield to pull back meaningfully and mortgage rates to follow. The market proved this in mid-April when early ceasefire signals pulled the 30-year to 6.18%. That mechanism still works — it just needs a durable signal, not a social media post.
April housing starts came in at a seasonally adjusted annual rate of 1.465 million — a 2.8% decline from March's upwardly revised 1.507 million, but still comfortably above the 1.41 million forecast. The headline pullback was driven almost entirely by single-family construction, which fell 9% to 0.93 million. Multi-family starts jumped 14.3% to 0.529 million, continuing the apartment-building trend that has added rental supply throughout 2025–26. The warning we flagged last issue — that March's permit collapse (10.8% decline) would eventually hit starts — is now visible in the data.
The regional picture is nuanced. The South and Midwest held up; the West fell 11%. High mortgage rates are the primary culprit. Builders are still active, but the incentive to break ground on new spec homes diminishes as buyer pools thin and rate buydown costs rise. The NAHB noted that "builders are dealing with inflation and labor shortages" — the same themes that have constrained new supply throughout the Iran-era inflation shock.
On the demand side, Fannie Mae's May Housing Forecast provided a rare dose of optimism. The GSE now projects existing home sales to increase 2.6% in 2026 and 7.2% in 2027, as affordability continues to improve year-over-year. The rate forecast of 6.30% for the remainder of 2026 is slightly below current market levels — Fannie Mae is betting on the Iran situation moderating enough to bring the 10-year yield down. If they're right, we could see a meaningful burst of spring-into-summer activity that the data hasn't captured yet.
| Date | Event | Status / What to Watch |
|---|---|---|
| Released | April Housing Starts: 1.465M | ✓ −2.8% MoM · Single-family −9% · Beat forecast |
| Released | FOMC Minutes (Apr 29) | ✓ Hike discussion confirmed · Easing bias under siege |
| Released | Warsh Sworn In (May 22) | ✓ "Reform-oriented Fed" · Independence pledged · June 16 is next |
| May 27 | April New Home Sales | Builder activity post-rate spike · Median price direction |
| May 30 | April PCE Inflation | Fed's preferred gauge · If core above 2.9%, hike talk escalates |
| Jun 6 | May Jobs Report | Labor market's health — one of two cuts triggers |
| Jun 9 | May Existing Home Sales | Spring season's final report card |
| Jun 10 | May CPI | First full month of oil pullback in the data |
| Jun 16–17 | FOMC — Warsh's First Meeting | Easing bias: keep or cut? Forward guidance style: Powell or Warsh? Every word matters. |
The market is moving. Quietly — but it's moving.
Fannie Mae just raised its existing home sales forecast for 2026. Affordability is measurably better than a year ago. Oil is retreating. And Warsh — whatever his eventual rate stance — has signaled that he won't be the Fed's destabilizing force. That combination is not a green light. But it is a yellow light turning green, for buyers who have been sitting at red for two years.
For homeowners watching refinance math: the 15-year rate at 5.85% is still well below what millions of borrowers who took adjustable-rate products in 2022–23 are now facing on their resets. The conversation about a fixed-rate refinance has never been more important for that cohort — and it costs nothing to run the numbers. A break-even analysis takes 10 minutes. A reset to a variable rate that climbs with a hike cycle takes years to recover from.
Whether you're a buyer watching rates drift higher or a homeowner wondering if the window is closing — the most valuable thing you can do right now is get a current picture of your options. Rates are volatile. Opportunities inside that volatility are real. → Reach out directly: 248.392.1511 · rrybarczyk@dynamgenlending.com
The Warsh era opens in the shadow of the most hawkish FOMC minutes in three years. The Iran peace talks are the most advanced they have been since the ceasefire — but the IEA's "red zone" warning means summer could bring a fresh energy crunch if a deal doesn't close quickly. And through all of it, the housing market continues to hold its floor, affordability continues to improve year-over-year, and buyers are still showing up.
The next six weeks are the most consequential of the year. April PCE on May 30 will tell us whether the Fed's preferred inflation gauge is accelerating like CPI suggested. The May jobs report on June 6 will tell us whether the labor market is softening enough to reopen the cut conversation. And Warsh's first FOMC meeting on June 16–17 will set the tone for the second half of the year. His first post-meeting statement will be parsed word-by-word — and rightly so.
If there is a theme to this Memorial Day edition, it is this: the environment is not ideal, but it is workable — for buyers who prepare, for homeowners who run the numbers, and for professionals who understand what's actually driving this market. The people waiting for the "right" conditions may be waiting until 2027. The people engaging with current conditions are building equity right now.
Next issue: June 2, 2026 — following April New Home Sales (May 27) and April PCE (May 30). If Iran peace talks break or close before then, expect a flash update. The next FOMC meeting on June 16–17 will receive dedicated coverage.