On May 22, 2026 Kevin Warsh was sworn in as the new Federal Reserve Chairman. Below are the S&P 500’s 1-year forward return and maximum drawdown after new Fed Chairs. While the S&P 500 is typically positive over the next year after a new Fed Chair begins, elevated volatility would be completely normal.
Here are the key takeaways:
- Measuring Volatility Around New Fed Chairs: This chart shows the forward 1-year S&P 500 return and maximum drawdown after each new Federal Reserve chair took office since 1970.
- A Look at the Data: Across the seven completed transitions, new chairs saw an average forward 1-year return of 8.0%, with returns ranging from -21.2% under Greenspan to +17.7% under Yellen. Every transition came with a drawdown along the way, averaging -17.5%. Since Warsh started on 5/22/2026, the S&P 500 index has returned 1.5% with a max drawdown of -0.7%.
- Investment Implications: Volatility around a Fed leadership change has historically been the norm, not the exception, even in the forward 1-year periods that ended higher.
