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The Markets Love To Haze A New Fed Chair

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dazed and confused ben affleck hazing

On Monday, Janet Yellen will be sworn into office as chair of the Federal Reserve.

This is an event that most market participants have been anticipating for around a year.

But this doesn't mean the transition won't coincide with some volatility in the markets.

Indeed, the past two weeks have seen markets around the world tumble and sink into the red for the year.

We're not saying that Janet Yellen is to blame for any of this.

However, the economists at UBS remind us that each of the last four Fed chairs experienced the same type of risk-off market moves during the beginning of their tenures. Specifically, gold outperformed stocks.

Traditionally, gold has been seen as a safe haven for worried investors while stocks have been the asset class of choice for risk takers. Basically, this means there's a heightened feeling of uncertainty when someone new takes the helm at the Fed.

Yes, this is a small sample size. And correlation is not causation. And this correlation is probably a spurious one.

Still, it's not nothing.

From UBS:

gold fed chart

SEE ALSO: THE GLOBAL 20: Twenty Huge Trends That Will Define The World For Generations

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