Summary:

• Next Fed chair expected to be announced on Thursday
• Powell the favourite but Taylor could make vice-chair
• Stocks dip on proposed “phase-in” of corporate tax cuts

It has been widely reported that the US president Donald Trump is looking to announce his nomination for the next Fed chair at some point this week, and a White House spokesman has said in the last hour state that this will now happen on Thursday 2nd Novermber. Powell remains a fairly strong favourite for the role and as such if he is nominated then the market reaction shouldn’t be too severe. As we pointed out earlier though, the vice-chair is also up for grabs and if Taylor is announced as the second in command it could still be seen to represent a hawkish shift amongst the most powerful members of the committee. 

 According to Predictit, a New Zealand based prediction market, Powell is a clear leader to be the next Fed chair. Source: Predictit 

News of the date of the announcement hasn’t seen much of a move in the markets but there has been a bit of risk-off trade in the past hour. This is possibly due to reports that the White House is considering phasing-in the corporate tax-cut. According to these the fully lowered corporate tax rate of 20% wouldn’t take effect until 2022. After ending last week at record highs this latest news has seen some small scale selling in the past hour for the US500 which has now dipped back below the 2570 level. The market made an all time high of 2580 last week.  

  The US500 has seen some selling in the last hour after reports that the corporate tax cut may be phased-in gradually. Source: xStation