Fed chair transition and reaction function

Fed chair transition and reaction function. A new chair resets the reaction function; markets spend a year learning it.

What to watch: Chair's first meetings; staff turnover; framework signals. It arrives event, and the effect typically lasts years.

It sits in tier 1 — Regime-setting: Moves everything and sets the direction for months or years. These are the discount rate, the level of earnings, the availability of credit, and the shocks large enough to stop the economy. If one of these turns, nothing else in the list matters much.

Primary source — federalreserve.gov ↗