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  • Powell’s Exit Door Is Open, And The Rate Path Just Got A Little Softer

Powell’s Exit Door Is Open, And The Rate Path Just Got A Little Softer

Warsh’s path is clearing, the Fed’s tone could change, and flat-to-lower rates now look like the cleaner bet.

April 29, 2026

The biggest Fed story right now is not the next meeting. It is the next chair.

With the Justice Department ending its probe of Jerome Powell, the political roadblock holding up Kevin Warsh’s confirmation just got smaller, and markets can finally start thinking harder about what a Warsh-led Fed would look like.

So, probably not panic cuts, but a setup where flat-to-lower rates look more likely than another tightening campaign.

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The Confirmation Path Just Got Cleaner

The Justice Department said it would end its criminal investigation into Powell, which had become the central obstacle to Warsh’s confirmation.

That mattered because Sen. Thom Tillis had said he would not support any Fed nominee while the probe remained open, and his vote was crucial on a narrowly divided Senate Banking Committee.

Senior Republicans then pushed publicly to wrap the matter up and move Warsh forward before Powell’s term as chair expires on May 15.

The situation is not perfectly tidy.

The matter was described by the White House as being moved to the inspector general rather than being fully buried, and Pirro reserved the right to restart a criminal probe later if new facts emerged.

That keeps a little political fog in the background. Still, the practical message is obvious: the odds of a leadership transition happening on time just improved.

What Warsh Actually Signaled

Warsh’s testimony did not sound like a man preparing to hike rates into the sun. His main argument was that the Fed missed badly in 2021 and 2022, needs a new framework, and should rethink how it communicates and operates.

He described the institution as having lost its way and called for fundamental policy reforms, including a new inflation framework and new tools.

That sounds hawkish on process, but not necessarily hawkish on the next few rate decisions.

More importantly for markets, Warsh had previously argued that AI-driven productivity gains could create room to cut rates, though he softened that argument under pressure at the hearing after skepticism from Sen. Kennedy.

He did not fully abandon the idea. He just retreated to a milder version of it. That still matters because it suggests his bias is not toward higher-for-longer as a default.

It suggests he sees a plausible case for lower rates if productivity and disinflation cooperate.

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Why Flat-To-Lower Is The Cleaner Base Case

There are three reasons flat-to-lower still looks like the better read under new leadership.

First, Warsh repeatedly denied that Trump extracted any commitment on rates. That does not prove independence, but it does remove the simplest fear trade that he was walking in with a pre-written easing order in his pocket. 

Second, his critique of the Fed was focused more on credibility, communication, and framework than on the need to crush demand further.

If he believed the answer was a simple return to higher rates, the hearing would have sounded different.

Third, markets do not need a guaranteed cutting cycle to benefit. They just need the next chair to lean less toward defensive caution than Powell has recently. Warsh’s language leaves room for exactly that.

So the investable angle is not to bet on emergency cuts.

It is to lean into businesses that benefit from a Fed that is more open to stable or gradually lower rates, especially if the market starts discounting a more flexible regime before policy actually changes.

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Actionable Stuff

Think Policy Tone, Not Just Policy Level

A new chair can move markets before the first rate decision ever changes.

Favor Long-Duration Cash Flows Carefully

If rates stay flat or drift lower, duration-sensitive businesses can re-rate, but quality still matters.

Watch Financial Conditions

If markets start easing conditions on their own, some of the upside arrives before the Fed actually cuts.

Do Not Overprice The AI Story

Warsh clearly left that door open, but even Republicans on the committee warned against getting carried away.

Position For A Softer Bias, Not A Full Pivot

That is the cleaner, less fragile way to play this.

Top Picks

Crown Castle (NYSE: CCI)

If the market starts pricing a flatter or lower rate path under new Fed leadership, tower REITs are an obvious place to look.

Crown Castle gives you recurring infrastructure cash flow with sensitivity to long-term yields and financing conditions.

It does not need heroic growth to work. It just needs the discount rate pressure to ease a bit.

What to watch: Interest-rate sensitivity, leasing trends, and any improvement in investor appetite for yield-backed infrastructure names.

CBRE Group (NYSE: CBRE)

Commercial real estate does not need rate cuts tomorrow morning. It needs the belief that financing conditions stop getting worse.

CBRE is a cleaner way to play that than pure property exposure because it sits in brokerage, services, and capital markets activity.

If Warsh’s arrival nudges expectations toward a steadier or easier path, transaction volumes can start thawing from a low base.

What to watch: Leasing and capital markets momentum, management commentary on client activity, and whether financing conditions begin unlocking delayed deals.

Brookfield Corporation (NYSE: BN)

Brookfield is a strong fit for a softer-rate setup because so much of its value is tied to long-duration real assets, infrastructure, and capital deployment. Lower or more stable rates help asset values, deal flow, and financing math.

This is not a one-quarter trade. It is a way to own a platform that looks better when the cost of capital stops being the enemy.

What to watch: Fundraising, asset monetization, and any sign that transaction activity is improving as rate expectations soften.

SBA Communications (NASDAQ: SBAC)

This is the cleaner, slightly less crowded tower alternative. Like Crown Castle, SBA benefits from recurring contracted revenue and a valuation framework that improves when rates stop leaning upward.

It also avoids needing a macro boom to work. In a world where the next Fed chair is more likely to lean easier than tighter, names like this can quietly re-rate well before the first actual cut.

What to watch: Leasing activity, churn, and financing commentary if markets start anticipating a friendlier rate backdrop.

Bottom Line

The Big Takeaway

The most important Fed story right now is the transition, not the next hold.

What It Means

With Powell’s probe winding down and Warsh’s confirmation path clearer, markets can start pricing a chair who sounds more open to a softer policy stance than the current one.

How To Play It

Do not bet on instant cuts. Bet on a lower ceiling for rates and a slightly friendlier tone toward easing. That is enough to make long-duration, capital-intensive, and transaction-sensitive businesses more interesting again.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes