'Neutral impact': how markets reacted to Trump's nominee to head the Fed

U.S. stock indexes opened mostly slightly lower, partially reversing losses on January 30 after U.S. President Donald Trump nominated Kevin Warsh, an economist and former member of the Federal Reserve Board of Governors, to head the U.S. central bank. Futures on all of them declined before the opening of trading on U.S. exchanges on January 30 ahead of Trump's announcement of his nominee to head the Fed.

At the opening of trading on January 30, the index of the broad market of American stocks S&P 500 lost 0.17%, Nasdaq Composite - in the minus by 0.24%, the index of "blue chips" Dow Jones decreased by 0.25%, the index of small and medium capitalization companies Russell 2000 came out in the plus by 0 .05%.

Prices for silver and gold also returned to growth, overcoming the marks of $5000 and approaching $100 per ounce, respectively. During trading on January 30, the cost of gold fell by 8% to $4957.54 per ounce, silver - at the minimum reached $95.79, although a day earlier, on January 29, the price of precious metal broke through another record level and exceeded $120 per ounce. At the time of publication gold traded down by 4.89% ($5092.8 per ounce), silver fell by 14.08% to $98.32 per ounce.

The reaction in financial markets after Trump's statement on the future Fed chief was mostly restrained, Reuters writes. Warsh is considered a relatively moderate figure "who, despite favoring lower interest rates, is markedly more cautious about applying large-scale monetary stimulus," the agency explains. "In terms of the impact [of Worsh's possible appointment] on the dollar, it's neutral, and it's neutral for equity markets as well," Elias Haddad, head of global market strategy at Brown Brothers Harriman, noted in a commentary for Reuters. Warsh, he added, "still favors lower interest rates, which is favorable for risk assets." "But on the other hand," the analyst continued, "he wants to significantly reduce the Fed's balance sheet, which has largely contributed to this surge in asset prices.

The material is supplemented

This article was AI-translated and verified by a human editor