Financial markets have largely treated President Donald Trump’s selection of Kevin Wersh as the next chairman of the Federal Reserve positively, a sign that investors view the former Fed governor as a reliable manager of monetary policy, despite expectations that he might push for lower rates. Treasury yields were little changed on Friday shortly after the announcement, a sign that investors saw little risk to inflation or the Fed’s independence. The dollar edged higher against major rivals, while losses in stocks were light and controlled, showing relief that Trump’s choice was seen as a steady hand rather than a political pawn. Gold and silver prices fell as Warsh was seen helping ease concerns about US currency “depreciation”, which has driven international investors into the metals. “I believe he brings a strong mix of deep expertise, broad experience and sharp communication skills,” Mohammed El-Erian, chief economic adviser at Allianz, said in a post on X. His commitment to reforming and modernizing the Fed bodes well for enhancing policy effectiveness and protecting the political independence of the institution. Warsh’s nomination is widely seen as removing the cloud over the Fed’s independence that had been weighing on stocks and threatening to push interest rates higher. With risk appetite reduced, investors may refocus on corporate earnings and economic fundamentals rather than political interference at the central bank. Warsh, who worked at the central bank from 2006 to 2011, was openly critical of quantitative easing during and after the financial crisis, a stance that has strengthened his position among investors wary of inflation and fiscal dominance. “I think Kevin Warsh would be an excellent pick for Fed Chairman. Since I have been a longtime critic of the Fed’s easy money policy, both on rates and their balance sheet, I have always appreciated Warsh’s aggressiveness and disdain for QE,” OnePoint BFG Wealth Partners CIO Peter Boockvar said in a note. Since Jerome Powell was confirmed in 2018 during Trump’s first term, the president has repeatedly pressured the Fed to cut interest rates more aggressively. Even after three rate cuts in late 2025, Trump continued to push for easy policy, while also criticizing Powell over rising costs associated with renovating the central bank’s headquarters in Washington. “Although he has been somewhat critical of Jerome Powell for taking too late to cut rates, he should understand the importance of the Fed’s independence,” said Jay Woods, chief market strategist at Freedom Capital Markets. “Connecting with that freedom theme will be questions about his views and how they line up with President Trump’s more hawkish views when it comes to a rate cut.” Still, not everyone is convinced the markets will remain calm. Chris Rupkey, chief economist at Fwdbonds, cautioned that the market was probably underestimating how closely Warsh might ultimately align with the White House. “Slowly but surely he will lean in the direction of a President who supports a dramatic interest rate cut of at least one or two percentage points from neutral to 3%,” Rupkey said in a note. “Warsh would not have gotten the job unless he had pledged to the President that he would pursue a Trump 2.0 economic agenda.” @GC.1 1Y Mountain Gold Futures One Year For precious metals, the change raises the possibility that a crowded trade could eventually lose wind. Spot silver fell 10.6% to about $103.81 an ounce. In the early hours of the morning, the metal had fallen by 16% and fallen below the $100 milestone. Spot gold fell about 5.7% to $5,136.27 an ounce. Earlier, the safe haven metal had fallen by up to 7%. “The Warp pick should help stabilize the dollar somewhat and reduce (though not eliminate) the asymmetric risk of deeper dollar weakness by challenging debasement trades – which is why gold and silver are sharply lower,” Evercore ISI’s Krishna Guha said in a note.
