Too many investors are minimizing the biggest risk to the markets right now, warns Oppenheimer's Stoltzfus

He calls it the biggest risk to the markets — one that much of Wall Street is minimizing.

Oppenheimer Asset Management's John Stoltzfus warns that if Janet Yellen doesn't get reappointed as Federal Reserve chair, stocks could take a hit.

"We'd have to think that just changing the leadership of the Fed could be a negative thing for the markets," the firm's chief investment strategist said Monday on CNBC's "Trading Nation." "We'd like to say don't change horses in the middle of the stream."

According to the PredictIt online probability market, it's essentially a horse race for the Fed's top post. As of early Tuesday afternoon, Fed Governor Jerome Powell was in the lead with 35 percent. Yellen, whose term ends in February, secured second place with 22 percent.

President Donald Trump is scheduled to interview Yellen on Thursday. It could be a high stakes meeting for not only Yellen, but also the markets. The president has accused her of being too political to lead monetary policy.

"The market doesn't like changes in leadership. It has to sniff around the new leader when you have a new leader come on board," Stoltzfus said.

Yellen was sworn in as Fed chair by President Barack Obama on Feb. 3, 2014. Since then, the S&P 500 has surged by 43 percent.

"The personality of the chairman of the Federal Reserve is very important if you consider the great humility of Bernanke and Yellen, who have really served remarkably as public servants and highly professional economists to guide us through a very tough period," said Stoltzfus.

If there is a change at the helm, he believes Powell would be the best fit as Fed chairman because he's "less hawkish than some of the other candidates."

"Powell has served on the Fed – has a deep bench of experience," Stoltzfus said. "I think that would be a lesser risk of disruption in the transition."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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