Financial markets face renewed volatility as speculation intensifies over leadership changes at the US Federal Reserve. President Donald Trump's ambiguous comments about economic adviser Kevin Hassett's potential nomination triggered cautious trading this week, with major US stock indices and bond prices experiencing modest declines.
Speaking at a January 16 White House event, Trump praised Hassett's work as National Economic Council director but suggested preferring his continued service in that role. This marks a notable shift from previous assumptions that Hassett – a vocal advocate for aggressive rate cuts – might replace current Chair Jerome Powell.
The S&P 500 and Dow Jones Industrial Average both dipped 0.4% following the remarks, while the VIX volatility index climbed 6.2% this week. Precious metals mirrored the uncertainty, with spot gold surrendering early gains and silver prices falling 1.8% in Thursday's Asian trading sessions.
Analysts suggest the market reaction reflects broader concerns about monetary policy continuity, particularly given ongoing inflationary pressures and geopolitical tensions in Asia. "Investors are pricing in multiple scenarios," said Singapore-based strategist Li Wei Min. "The Fed's leadership transition could significantly impact capital flows into emerging Asian markets this year."
