Kevin Warsh replaced Jerome Powell as Fed Chair in May 2026 amid rising inflation driven by the Iran War's impact on oil prices. While economists expect potential rate hikes to control inflation, a recent peace agreement with Iran may lead to the rate cuts previously advocated by President Trump. This uncertainty affects long-term Treasury bonds, which have seen yields rise and prices fall since 2020, hurting ETFs like iShares 20+ Year Treasury Bond ETF (TLT) and its income-focused counterpart TLTW. If Warsh cuts rates, TLT could gain significantly, while TLTW offers higher income but caps upside potential. Investors must weigh the prospects of rate cuts versus hikes when choosing between these ETFs.
