Investors are now focused on Federal Reserve Chairman Jerome Powell following President Donald Trump's nomination of former Fed Governor Kevin Warsh as his successor. The nomination is expected to go through a tortuous Senate confirmation process.
Barclays analysts said Powell would need to notify Trump if he intends to step down after his term as chairman ends in May, even though his term as Fed governor runs until January 2028.
History has shown that previous actions have been taken, with former Fed Chair Janet Yellen submitting her resignation to Trump less than three weeks after Powell's nomination was announced in 2017. If Powell follows a similar pattern, he could make a decision in the second half of February.
In the meantime, Powell is likely to hold off on any decision until the Justice Department's investigation into him is complete and the Supreme Court rules on the legal standing of Fed Governor Lisa Cook.
The uncertainty comes amid growing concerns about the Fed's independence, with Trump and Powell frequently at odds over interest rate policy, as well as the president's surprise move to fire Cook, which is now under review by the Supreme Court.
