BlockBeats News, February 3 — Barclays pointed out that since 1930, the S&P 500 has averaged a decline of about 16% within the first six months of a new Federal Reserve chair taking office, significantly higher than normal correction levels. If Kevin Wirth takes over in May, U.S. stocks may face renewed pressure.
The report states that new chairs often face “tests” from the market within months of taking office. Previously, after Trump announced Wirth as Powell’s successor, U.S. stocks declined, as the market viewed him as not being dovish.
Analysts believe that amid debates over the Fed’s independence, high inflation, and slowing employment, leadership changes will increase monetary policy uncertainty. If Wirth pushes for balance sheet reduction, it could further withdraw liquidity and negatively impact risk assets; however, his hawkish stance on the balance sheet may help suppress gold prices and provide temporary support for the dollar.
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