Overview
- The dollar reversed part of its year-long slide after President Trump named Kevin Warsh to succeed Jerome Powell at the Federal Reserve.
- Gold and silver saw brutal sell-offs, with gold suffering its worst drop since the early 1980s and silver down more than 20%, erasing billions in value.
- Morgan Stanley’s Mike Wilson framed Warsh as a potential credibility anchor for the Fed that could stabilize the dollar and cool the debasement trade.
- Economist Robin Brooks projected up to 100 basis points of rate cuts under a Warsh-led Fed this year, and investor George Noble argued markets misread Warsh as too hawkish.
- Analysts flagged a policy risk premium on the greenback, heavier hedging by foreign investors, and elevated currency volatility following unpredictable White House moves.