Trump nominated Warsh in January to succeed Jerome Powell in May; at April Senate testimony, Warsh backed a smaller Fed balance sheet and rejected forward guidance.
With the balance sheet still near $7tn after peaking around $9tn in 2022, tighter bond sales could raise yields, curb borrowing and draw money from equities.
UBS says quantitative tightening could cut about nine percentage points from S&P 500 gains over two to three years, while less rate guidance could make stock valuations and markets more volatile.
Will a new Fed chief undo recent efforts to stabilize markets in favor of shrinking the balance sheet?
How could a new Fed chair's policies threaten a stock market currently near all-time highs?
Can the Fed shrink its massive $7 trillion balance sheet without triggering another financial crisis?
With global risks rising, is now the right time for a radical shift in US monetary policy?
What happens to market stability if the Fed suddenly stops signaling its future interest rate moves?
Is using AI's potential to justify rate cuts a visionary economic strategy or a reckless gamble?