Why is Kevin Warsh's nomination as Fed chair bearish for the stock market?

First, look at his resume:

Born in New York in 1970, served as Vice President of Mergers & Acquisitions at Morgan Stanley from 1995–2002, and entered the White House in 2002 as Special Assistant to President George W. Bush for Economic Policy.

In 2006, at just 35 years old, he became a Federal Reserve Governor, the youngest in the institution's history; during the 2008 financial crisis, he served as a key liaison between Ben Bernanke and Wall Street.

In 2010, he publicly criticized quantitative easing as "robbing the poor to feed the rich" and resigned early.

His wife, Jane Lauder, is an heir to the Estée Lauder Group, and his father-in-law, Ronald Lauder, is a major Republican donor with close ties to Donald Trump.

After the nomination news broke, U.S. stocks fell, the 10-year Treasury yield rose, the dollar strengthened, and precious metals came under pressure.

This is mainly because he advocates for balance sheet reduction. What does that mean? It means reducing the flow of U.S. dollar bonds in the market, which can also be understood as repurchasing and canceling dollars, and letting the market determine Treasury yields.

This is bearish for precious metals and stocks, so I told my friend yesterday that I hope it's not him. He has previously advocated for aggressive rate cuts, but his stance is still too hawkish.

Trump will announce his pick tonight. If it's really him, it's bearish in the short term, and investment strategies will need to shift. Avoid large-cap companies and focus on undervalued small- and mid-cap stocks in traditional industrial manufacturing and energy.

The most bearish impact will be on companies with poor performance and high debt risks, like Oracle. Personally, I think it's bullish for manufacturing companies like Micron. Micron's P/E ratio is relatively low compared to other tech companies, and it's on an upward trend.

Also, Micron is one of the hottest investments on Reddit abroad. If your position is high, consider reducing it if it rallies tonight (don't rush to add). If your position is low, don't rush to add—wait to see how the market reacts to his appointment (watch Nasdaq fluctuations). This is more important in the short term than Trump's strikes on Iran.

$Micron Tech(MU.US)$Sandisk(SNDK.US)$AMD(AMD.US)