Will the Federal Reserve's change of leadership lead to a decline? Walsh's appointment may trigger the 'curse' of 1996, and the stock market is facing a test BlockBeats News: On May 19th, Federal Reserve Chairman Kevin Walsh will take over Powell this Friday, and Wall Street may shake again. Behind this lies a 96 year old "Federal Reserve curse": after the new chairman takes office, the stock market will average a 12% pullback within 3 months and a 16% pullback within 6 months. As a staunch inflation hawk, taking office means that policies will shift significantly towards tightening, and investors are repricing systemic risks in the market. According to statistics from Barclays Bank, this pattern has never failed since 1930: within one month of the new Federal Reserve Chairman taking office, the S&P 500 index fell an average of 5%; Withdraw 12% within 3 months; Withdraw 16% within 6 months. When the new chairman takes office, it means that interest rate policy, inflation tolerance, and monetary tightening pace will all be rewritten. The market has to reserve a risk premium for this uncertainty. Walsh's hawkish stance is clear and accurate - he plans to shake the Fed's 15 year dot matrix and forward guidance framework, and completely rewrite the pricing logic of global assets. Powell's previous 8-year term was also a tumultuous history. In the first week of taking office in 2018, the Dow Jones Industrial Average plummeted 1175 points, and the US stock market lost $1 trillion in value in three days. In the face of soaring inflation in 2022, he launched the most aggressive interest rate hike cycle in 10 years - four consecutive interest rate hikes of 75 basis points each, with interest rates rising from zero to a 20-year high of 5.25% -5.5%. In terms of performance report, Powell created relatively good employment data, with an average monthly unemployment rate of 4.6% during his tenure, better than Greenspan (5.5%), Bernanke (7.3%), and Yellen (5.1%). But inflation has become a tough issue, with an average inflation rate of 3.09%, far exceeding the Federal Reserve's target of 2%. Even more noteworthy is that he firmly maintained the independence of the Federal Reserve under political pressure, which is seen as the most important legacy of his tenure. But history also has twists and turns. When Paul Volcker took office in 1979, the inflation rate in the United States reached 13.5%. He successfully defeated inflation by aggressively raising interest rates (to 20%), but at the cost of an economic recession. However, during his 8-year tenure, the S&P 500 surged from 104 points to 333 points, with a cumulative increase of 220%. A similar pattern was repeated during the three terms of Chairman Volcker, Greenspan, and Bernanke: short-term fluctuations were the norm, while long-term increases were the norm. During the tenure of these three chairpersons, the US stock market rose a total of 16 times. The market always falls into panic at the beginning of the new chairman's tenure, and gradually recognizes the new policy framework after 6 months each time.