Institutions warn: After a change in Federal Reserve Chair, the S&P 500 index drops an average of 16%
BlockBeats News, February 3, Barclays pointed out that since 1930, within six months after a new Federal Reserve Chair takes office, the S&P 500 Index has on average pulled back by about 16%, significantly higher than the normal correction range. If Kevin Warsh takes over in May, the US stock market may come under renewed pressure.
The report states that new chairs often face a "test" from the market within a few months of taking office. Previously, after news broke that Trump had nominated Warsh to replace Powell, US stocks had already declined, with the market viewing him as not a dovish candidate.
Analysis suggests that amid debates over the Federal Reserve's independence, persistent high inflation, and slowing employment, a leadership change will intensify monetary policy uncertainty. If Warsh pushes for balance sheet reduction, it may further drain liquidity and be bearish for risk assets; however, his hawkish stance on the balance sheet could help suppress gold prices and provide temporary support for the US dollar.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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