Global markets reacted sharply as U.S. President Donald Trump prepared to nominate Kevin Warsh as the next Federal Reserve chair, a choice perceived as more hawkish than other contenders.
Equity markets slipped, with MSCI’s Asian share benchmark down 0.6% and U.S. equity-index futures falling 0.3%. Gold prices dropped 3%, while the U.S. dollar gained. Bitcoin and other cryptocurrencies led a broader selloff in digital assets.
U.S. Treasury 10-year yields climbed four basis points, reflecting rising expectations of tighter monetary policy. Market moves suggest traders are increasingly pricing in Warsh as the next Fed chief, scaling back their assumptions for policy easing.
According to sources familiar with the matter, Warsh, one of four finalists on Trump’s shortlist, visited the White House on Thursday. The selection is not final until the president formally announces his pick, which Trump said is expected Friday morning.
The nomination will end months of speculation over the central bank’s leadership following criticism from Trump and his administration of current Fed Chair Jerome Powell for not cutting interest rates.
Investors and analysts are closely watching the decision, given its potential impact on U.S. monetary policy, global equities, and financial markets worldwide.
