ByBENJAMIN CURRY, US DEPUTY CONSUMER EDITOR

Published:14:50 EDT, 11 May 2026|Updated:14:50 EDT, 11 May 2026

Stock markets opened at another record high on Monday - but Wall Street is bracing for the week that could decide whether the rally survives or cracks. Four huge events are now bearing down on investors, homeowners and anyone with a 401(k). Most of the action focuses on the the nation's central bank - the Federal Reserve - and whether or not it will be able to deliver the lower interest rates that homeowners and the White House crave. At the top of the list, the full US Senate will vote to confirm Kevin Warsh as the new Fed chair . Warsh faces two key votes that will make or break his candidacy - the second and most important will arrive later in the week but has not yet been scheduled.

On Tuesday morning, the government will release its latest CPI inflation report for April, and economists believe it could be as bad or worse than the shocking March inflation data released one month ago. The CPI report comes just days after last week’s excellent April jobs report , but some worry that bad news on prices could trump the good news on jobs. On Wednesday, three Fed officials skeptical of rate cuts will give speeches, previewing the rate cut skepticism Warsh is up against - and on Friday Trump goes to Beijing for his delayed summit with Chinese President Xi Jinping.

‘Investors hoping for rate cuts may need to stay patient,’ eToro investment analyst Bret Kenwell told the Daily Mail. ‘Rising energy prices are adding to inflation concerns, and if the labor market and broader economy continue to hold up, the Fed’s motivation to lower rates keeps dwindling - even with a new chair coming in.’ There will be two separate votes on Warsh in the Senate - political analysts expect him to clear both without any problems by midweek. The first vote, scheduled for Monday evening, will confirm Warsh’s membership on the Fed’s governing board. The second, as-yet unscheduled vote will confirm him as chair of the Federal Open Market Committee, the powerful group that sets the central bank’s interest rates. Current Fed chair Jerome Powell’s term expires on Friday, May 15.

Warsh served on the Fed’s board from 2006 to 2011 , where he earned a reputation favoring higher interest rates to help protect the US economy from out-of-control inflation. But since Trump returned to the White House for a second time, Warsh has aligned himself with the president’s stance that interest rates are now too high. The path to Warsh’s approval cleared a final hurdle when Republican Senator Thom Tillis dropped his blockade after the Justice Department ended their investigation of Powell. ‘Kevin Warsh is walking into the Fed Chair role with his credibility under fire based on his views on independence,’ Jay Woods, chief market strategist at Freedom Capital Markets, told the Dailyl Mail. ‘Will he run the Fed or will the White House?’

Just about one month ago, the first government inflation report released since the start of the Iran war stunned Wall Street. It showed prices had jumped by almost 1 percent in March, pushing the annual CPI inflation rate up to 3.3 percent, its highest level in two years. Gasoline prices soared by a staggering 21.2 percent in March, accounting for nearly three-quarters of the overall increase in inflation that month. Economists expect the April CPI inflation report to show prices up 0.6 percent month over month and up 3.7 percent year over year - and energy prices remain the main culprit behind the faster price increases across the economy.

‘Higher energy prices are beginning to generate broader supply chain pressures,’ Josh Hirt, US senior economist at Vanguard, told the Daily Mail. According to Woods, if the CPI inflation report meets or exceeds expectations, Wall Street and America’s homebuyers can forget about Fed rate cut. ‘The conversation will immediately shift to “higher-for-longer” and the rate-cut crowd may have to fold their cards completely’ said Woods. But if the inflation data undershoots expectations, Wall Street will start talking about a potential December rate cut again, giving Warsh a bit of breathing room as he takes over at the Fed. Wall Street will be closely watching three speeches on Wednesday by members of the FOMC for clues on how the nation’s central bank will operate once Warsh takes over as chair.

All three speakers are considered to be ‘hawks,’ which means they would prefer to keep interest rates on hold or raise them due to worries about faster price increases. First up is Boston Federal Reserve president Susan Collins, who believes the central bank should stop talking about the possibility of rate cuts - a polar opposite from Warsh’s recent comments. Collins has warned that interest rates will be on pause ‘for a longer time period,’ and said that higher inflation might force the Fed to consider rate hikes. Then Minneapolis Fed President Neel Kashkari will speak: He has warned that the Fed may need to raise rates several time if oil prices stay high for too long. Finally there’s Dallas Fed President Lorie Logan, who worries that the Iran war and higher oil prices could make the Fed’s job of controlling inflation much more difficult - even with the jobs market looking better.

Trump will be making his first trip to China since 2017 , and he has plenty to discuss with Xi that could roil the stock market. The visit was scheduled for early April, but Trump delayed it amid the war with Iran. China buys most of Iran's oil exports, and it recently ordered its companies to disregard US sanctions targeting Tehran. Trump has repeatedly said he wants to involve China in winding down the Iran war and cooperate on reopening the Strait of Hormuz. Wall Street is looking for the two leaders to strike a deal on oil and Iran, but that’s not all: There’s also chips and earths. Rare earths, that is, a key ingredient in a whole range of high-tech products. Trump needs to replenish the US stockpiles of the strategic materials while Xi wants to secure right to buy high-end machines for making computer chips. A ‘rare earth for machines’ deal could open the door to much lower chip prices, and impact a very wide range of tech and AI stocks.

Source: Drudge Report