Across the seven completed Fed-chair transitions since 1970, the S&P 500 returned about 8% on average over the following year, ranging from -21.2% under Greenspan to +17.7% under Yellen. Every one of those transitions saw a drawdown along the way, averaging about -17.5%. Since Warsh took over on May 22, the index is down about 0.6% with a maximum drawdown near 4.5%. The takeaway is that turbulence around a leadership change has been the rule rather than the exception, even in the years that finished higher. Results reflect a limited number of observations and are illustrative; they do not imply that a change in Fed leadership causes the moves shown.
Source: FactSet, Standard & Poor’s