S&P 500 ETF Gains as Trump Taps Warsh, Eyes Five Rate Cuts
President Trump admitted passing over Kevin Warsh for Fed chair in 2017 was a “really big mistake” and nominated him to succeed Jerome Powell when his term ends in May 2026. Warsh, a former Fed governor, could deliver up to five rate cuts, potentially boosting S&P 500 ETF returns.
1. Nomination U-Turn
President Trump acknowledged that passing over Kevin Warsh in 2017 for Federal Reserve chair was a “really big mistake” and has now officially nominated Warsh to replace Jerome Powell when his term ends in May 2026, citing confidence in Warsh’s capabilities.
2. Monetary Policy Outlook
Warsh, who served as a Fed governor from 2006 to 2011, has aligned with pro-growth policies and could advocate for up to five rate cuts, representing a significant shift from the Fed’s current data-dependent, inflation-focused stance.
3. S&P 500 ETF Impact
Equity markets responded positively, with the S&P 500 ETF rising 0.48% to close at $693.95 on Monday, as investors priced in expectations for lower borrowing costs and a more dovish Fed under Warsh’s leadership.