Kevin Warsh Sworn In As Fed Chair | Real Yield 5/22/2026
Speakers
Margaret Steinbach
— Capital Group Fixed Income Asset Class Lead
Warren Pierson
— Baird Funds Co-Chief Investment Officer
Subadra Rajappa
— Head of Research at Societe Generale
Summary
Kevin Warsh is sworn in as Fed Chair with a hawkish reputation. Guests discuss rising bond yields, defensive positioning in fixed income, and cautious views on AI credit. Warren Pierson favors overweight in short-duration IG corporates and expects curve steepening. Margaret Steinbach sees bonds as a defensive anchor.
- Kevin Warsh sworn in as 17th Fed Chair.
- Guests debate Fed policy outlook and hawkishness.
- Margaret Steinbach sees bonds as defensive anchor.
- Warren Pierson expects yield curve steepening.
- He recommends overweight short-duration IG corporates.
- He advises caution on AI-related credit.
- Subadra Rajappa discusses factors behind rising bond yields.
- Sonal Desai views Warsh as most hawkish nominee in 20 years.
Trade Ideas
Yield curve steepening expected.
The long end of the yield curve is more susceptible to upward pressure from global bond yields and fiscal concerns, leading to curve steepening, while the front end remains pegged by Fed inaction.
Overweight short-duration IG corporates.
Overweight investment-grade corporate bonds while taking shorter duration exposure to avoid curve steepening risk, as yields remain attractive (average 5.25%) despite tight spreads, and flows into the market continue strong.
Avoid AI credit, prefer equities.
AI-related credit is less attractive than AI equities due to risk of overbuilding data centers, tight spreads, and uncertain returns for bondholders; prefers equity exposure to capture winners with upside beyond fixed returns.
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Speakers: Warren Pierson · Tickers: TLT, LQD, AI-related credit