Citi on FOMC Warsh’s first-day: a new Fed Chair tends to be typically hawkish - FJElite

FOMC-day has typically been a positive day for assets, with above-average returns in equities and bonds. However, this meeting is uncommon: it is the first for a new Fed chair - studying this more limited data sample we find evidence an incoming chair establishes day-one hawkish bona-fides. The average sell-off in the 2-year is around 6bps vs an all-FOMC-day move averaging -1.1bps. We also find some continuation in rising yields historically over the next 100 trading days. In equities, new-Fed-chair-day returns are also weak but longer-term follow-through is more mixed; spare a thought for chair Greenspan as Black Monday 1987 occurred within the first few months of his tenure. We also recap our intraday analysis. That said recent falls in oil prices may reduce investor fears of rate hikes and our econ team US Economics Weekly - Dovish developments believes provides incoming Chair Warsh some scope to surprise dovishly.