Nomination of the Fed Chair changes dramatically! Warsh becomes the number one favorite
Trump's remarks rewrite the pattern of the Fed Chair nomination! On January 16, he expressed hope that Hassett would remain as NEC Director, directly announcing that this dovish candidate is out, predicting a significant adjustment in market odds, with Warsh's odds soaring to around 60%, becoming the absolute front-runner, Waller fluctuating slightly, and the odds for other candidates remaining below 10%, with the trading volume on the two major prediction platforms exceeding 230 million dollars.
The market reacted immediately: the hawkish Warsh's lead caused gold to fall by 1.5%, and the 10-year U.S. Treasury yield rose, putting pressure on tech stocks; meanwhile, his open attitude towards crypto drove Bitcoin to rebound by 2-3% on the day, as the market anticipates loosening of crypto regulations after he takes office.
Behind this nomination is Trump's demand for the Fed to cooperate with his economic policies. Although Warsh has become a favorite, the nomination still requires Senate confirmation, and the hawkish stance may face opposition from the Democrats. Trump is expected to announce the final candidate around the end of January, before or after the Davos meeting, and subsequent developments are worth close attention!
