Markets are digesting the Friday announcement of Powell’s replacement as the next Fed Chair, taking effect in May 2026. In case you missed it, Kevin Warsh will take his spot.
Discover: The Fed Chair has been picked: Who is Kevin Warsh?
The announcement brought a wave of high volatility, combined with record pace January month-end flows.
Metals were subject to a now-famous 6-sigma event (where volatility exceeds 99.9996% of previous observations), taking Silver back to $78 and Gold back below $5,000.
In parallel, the US Dollar spiked higher, reversing a large part of its end-January move lower as participants saw Warsh’s nomination as a positive for the Greenback.
The 2006-2011 Governor was seen as a “hard money hawk”, so his appointment was initially seen as negative for stocks and risk-assets, particularly given movements in Metals and Cryptocurrencies.
Seen as a reformist, the next Fed Chair will undoubtedly contribute to drastic changes in the way the central bank operates – the rest will be to know if it gets a positive response from investor sentiment.
Being appointed by Trump and remaining close to the current Administration, it would be surprising to see the opposite.
Propped higher by Iran tensions turning into discussions, a very positive surprise on the Manufacturing PMIs (52.6 vs 48.5 exp!) and month-beginning reallocations, US Benchmarks are heading to their recent highs in the morning session.