History Says The Next Fed Chair Could Sink Your Portfolio

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Wall Street is bracing for a leadership transition. As Jerome Powell’s term as a Fed Chairman ends on May 15, the market is starting to adjust to a new leadership, likely under Kevin Warsh. ...

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As Jerome Powell’s term as a Fed Chairman ends on May 15, the market is starting to adjust to a new leadership, likely under Kevin Warsh.\n...</p>\n\n<a href=\"https://www.benzinga.com/markets/economic-data/26/05/52242183/history-says-the-next-fed-chair-could-sink-your-portfolio\">Source Link</a>\n\n</div>\n","source":"benzinga_recent_news","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>History Says The Next Fed Chair Could Sink Your Portfolio</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHistory Says The Next Fed Chair Could Sink Your Portfolio\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-05-04 18:38 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/markets/economic-data/26/05/52242183/history-says-the-next-fed-chair-could-sink-your-portfolio><strong>Benzinga_recent_news</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Wall Street is bracing for a leadership transition. As Jerome Powell’s term as a Fed Chairman ends on May 15, the market is starting to adjust to a new leadership, likely under Kevin Warsh.\n...</p>\n\n<a href=\"https://www.benzinga.com/markets/economic-data/26/05/52242183/history-says-the-next-fed-chair-could-sink-your-portfolio\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LQD","symbol_name":"债券指数ETF-iShares iBoxx投资级公司债","start_time":0,"source_url":"https://www.benzinga.com/markets/economic-data/26/05/52242183/history-says-the-next-fed-chair-could-sink-your-portfolio","article_id":"2632376969","we_media_id":null,"thumbnails":["https://cdn.benzinga.com/files/images/story/2026/05/04/Mirans-Fed-Term-Extended.jpeg?optimize=medium&dpr=2&auto=webp&width=240"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/markets/economic-data/26/05/52242183/history-says-the-next-fed-chair-could-sink-your-portfolio","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2632376969","pubTimestamp":1777891080,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"Wall Street is testing the next Fed era as Powell exits. 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As Jerome Powell’s term as a Fed Chairman ends on May 15, the market is starting to adjust to a new leadership, likely under Kevin Warsh.\nHistorically, changing the guard triggers market anxiety, as investors fear a shift in the “reaction function” of the world’s most powerful central bank.\nWhile volatility seems inevitable as markets “test” the new Chair, research suggests investors are pricing in the inherited environment rather than the man behind the desk. However, historical data suggests that significant market underperformance typically accompanies these transitions.\nDr. Dejan Kovač, a Harvard postdoc fellow, analyzed Fed transitions over the last 50 years. He looked at data from the Burns-to-Miller handover in 1978 to Powell’s arrival in 2018. The period following these transitions is clear – markets, on average, underperform by 7.7 percentage points in the year following a leadership change.\nHowever, Kovač’s study also reveals a replacement illusion. After controlling for macro factors like CPI, the Fed Funds rate, recession risk, volatility (VIX), and yield curve dynamics, the difference is considerable.\n“Once we include these controls, the estimated effect drops significantly — from about −7.7 percentage points to roughly −1.8 percentage points,” Kovač noted.\nThus, the data suggest that massive historical drawdowns—such as those seen when Alan Greenspan took over in 1987 or Powell in 2018—were driven by market timing, such as late-cycle tightening or external shocks, rather than by the identity of the Chair.\nYet, not everyone is ready to dismiss the “personality” factor. Mark Hackett, Chief Market Strategist at Nationwide, pointed out that while early-year indicators like the “January Barometer” are bullish for 2026, a leadership change introduces a specific technical risk.\n“Historically, these indicators have carried meaningful weight,” he wrote, explaining an 87% positive track record for the method.\nHowever, he also notes that markets have “tended to ‘test’ new Fed chairs, reflecting the uncertainty that often surrounds changes in policy tone, communication style, and the central bank’s decision-making approach.”\nUsing the data going back to 1930, Hackett has calculated the drawdown. Within six months of the new Fed chair taking the seat, the S&P has, on average, declined by 9%. But, as he puts it, “historical patterns should be viewed as context, not prophecy.”\nStill, according to Kovač, we’re in a far more sophisticated environment today.\n“Wall Street has already studied every major crisis. The mechanisms are known. The playbooks are known. So what do traders do? They hedge in advance,” he noted.\nFor him, the market barely reacting to the Warsh news is evidence of a far more sophisticated playbook that the modern institutions are executing.\n“That is why we are not seeing identical reactions to oil shocks, AI hype, or geopolitical risk compared to previous decades. Because everyone is running the same analysis. The market is not surprised anymore,” he concludes.\nPhoto by AevanStock via Shutterstock\nTo add Benzinga News as your preferred source on Google, click here.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}