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Inside Traders' War Games for Trump's Fed Chair Pick

  • Expect flatter yield curve, stronger dollar with hawkish Warsh
  • Powell gaining favor as ‘GOP alternative to renaming Yellen’
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Cumberland's Eisenbeis: Fed Chair Sets Policy Tone

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Whether Donald Trump follows through on announcing a new Federal Reserve chair in the coming weeks or not, traders across financial markets have already tipped their hands.

Former Fed Governor Kevin Warsh? He’s seen as the most hawkish of the candidates, meaning more rate hikes and a flatter yield curve. Reappointing Janet Yellen would be a sigh of relief, since her dovish stance is well-known, so less volatility from stocks to currencies. Current Fed Governor Jerome Powell, who is jockeying for the lead in betting markets, falls somewhere in the middle.