Will Lael Brainard be Powell’s Successor as Fed Chair?

The biggest signal that Federal Reserve Governor Lael Brainard is a major candidate to succeed Jerome Powell as U. S. Fed Chair has generated a wave of speculations over how financial markets would react if Biden announced her as his nominee.

The longest wait for the announcement in the modern era had already spurred uncertainty that Powell could win another term of four years when his current term ends next February.

Treasury yields sank following the report as investors debated whether Brainard would follow through on the Fed’s latest asset-purchase tapering timeline or hold off on raising interest rates for a longer period than currently anticipated.

Brainard’s appointment would mean more bullish trend for the bond market. That’s because she would likely keep rates lower for longer and be less aggressive when eventually hiking.