President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, leading to declines in Wall Street and a weakening of the Mexican peso on January 30, 2026. Investors reacted cautiously to Warsh's profile, seen as an inflation hawk. Despite daily losses, markets posted positive monthly gains.
On January 30, 2026, President Donald Trump announced the nomination of 55-year-old Kevin Warsh, a former Fed governor from 2006 to 2011, to succeed Jerome Powell in May. Trump praised Warsh on his Truth Social network: “I have known Kevin for a long time and have no doubt that he will go down in history as one of the GREAT Fed chairs.” Warsh, who advised Trump on economic policy and recently advocated for lower rates, is viewed as pragmatic but with a historical hawkish stance on inflation.
Financial markets reacted with volatility. In Wall Street, the Nasdaq fell 0.94% to 23,461.82 points, the S&P 500 dropped 0.43% to 6,939.03, and the Dow Jones lost 0.37% to 48,892.47 units, per closing reports. However, for January, the Dow gained 1%, the S&P 500 advanced 1%, and the Nasdaq added 0.97%. Krishna Guha of Evercore commented: “Warsh's choice should help stabilize the dollar, though it does not eliminate the asymmetric risk of a deep and prolonged weakness in the US currency. We see Warsh as pragmatic, as an ideological hawk.”
In Mexico, the impact was evident on the Mexican Stock Exchange (BMV). The IPC index declined 2.72% to 67,598.95 points, its largest drop since the start of the year, while the FTSE-BIVA fell 2.80% to 1,340.71. Despite the negative session, the IPC accumulated a 5.12% monthly gain, surpassing the all-time high of 69,959.73 reached on January 28. Gabriela Siller of Banco Base noted: “In Mexico, the BMV's IPC closed the month with a 5.12% gain, winning in five of the last six months.” Standout performers included Orbia Advance (+18.65%) and Banorte (+18.35%).
The Mexican peso depreciated 1.08%, closing at 17.42 units per dollar from 17.23 the previous day, driven by the dollar index (DXY) strengthening with its biggest gain since July 2025. Janneth Quiroz of Monex stated: “The exchange rate shows an upward bias after the announcement of the new Fed chair.” Nonetheless, in January, the peso appreciated 3.26% or 59 centavos. Experts like Stephen Brown of Capital Economics view the nomination as “a relatively safe choice,” though they warn of risks for long-term bond yields. Gold plunged, while WTI oil rose 0.29% to $65.59 per barrel.
