TSX:REI.UN 5 January 2026

April 30, 2026, 4:28 AM EDT. President Trump's nominee for Federal Reserve Chair, Kevin Warsh, has raised concerns among stock market investors due to his stance on monetary policy. Warsh advocates shrinking the Fed's balance sheet, currently near $7 trillion, which could lead to higher bond yields and borrowing costs. This quantitative tightening - the process of selling Treasury bonds - may slow corporate profit growth, make bonds more appealing than stocks, and reduce liquidity in financial markets. UBS strategists warn this could create a 9-percentage-point drag on the S&P 500 over two to three years. Despite Trump's wish for lower interest rates, Warsh emphasized monetary policy independence during his Senate hearings, indicating potential challenges ahead for stock investors as the Fed balances market stability with long-term economic goals.