Overview
- Gold and silver slumped sharply and commodity-linked currencies weakened after President Trump named Kevin Warsh to succeed Jerome Powell at the Federal Reserve.
- Despite the rebound in the greenback, market pricing still points to rate cuts beginning in June, contingent on Warsh’s Senate confirmation.
- Forecasts diverged as Robin Brooks projected 100 basis points of easing this year and Fed official Stephen Miran advocated similar cuts, while others highlighted Warsh’s hawkish reputation.
- Reuters reported a measured U.S. policy risk premium and rising currency-market volatility, with foreign investor hedging and rebalancing flows magnifying swings across assets.
- Ken Griffin said the dollar has lost some luster over the past year but praised Warsh’s selection as supportive of Fed independence.