Treasury Secretary Bessent and newly installed Fed Chair Kevin Warsh held their first breakfast meeting, with reporting indicating that rate cuts were not on the agenda and that Warsh likely has a window of several months before any meaningful White House pressure to ease. The dynamic suggests a managed transition rather than immediate friction between the administration and the new Fed leadership.
For Armada's traditional repo desk, a period of political stability around the Fed reduces the risk of abrupt FOMC surprises that could reprice SOFR futures and disrupt term repo positioning. Warsh's background as a market-oriented former Fed governor suggests he will be attentive to funding market conditions, which is relevant to how the Fed manages reserve levels and the RRP facility that anchor short-end repo rates.