Stock and bond markets largely unfazed by Kevin Warsh nomination

Stock and bond markets showed little reaction to Kevin Warsh’s nomination as the next Federal Reserve chair, with the S&P 500 nudging about 0.3 percent lower in early trading on Friday, Jan. 30, 2026. Investors were also digesting hotter-than-expected inflation numbers released that morning, but the government bond market showed little sign of concern: shorter-dated yields inched lower while longer-dated yields, more sensitive to inflation worries, moved slightly higher.

Mr. Warsh, who previously served on the Fed’s board of governors, has a reputation as an inflation hawk but has more recently aligned with President Trump’s call to lower interest rates, citing weakness in the labor market. Mr. Trump gave a glowing endorsement, even as he has repeatedly clashed with current Chair Jerome H.

Powell and investors had worried a pick might bow to the administration’s preferences. Many market watchers nonetheless viewed Mr. Warsh as a credible choice to lead the central bank. "Collectively, the market is saying that there will not be much of a change in the Fed funds path because of this nomination," said Ajay Rajadhyaksha, global chairman of research at Barclays.

Investors’ interest rate expectations, derived from futures prices, barely budged after the announcement; the consensus estimate for this year is for two cuts, each a quarter of a percentage point.

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