Warsh Closer? Markets React Immediately
The Trump administration is reportedly preparing steps for President Donald Trump to nominate Kevin Warsh as the next Federal Reserve Chairman, according to sources familiar with the process. However, the decision is not final until Trump makes an official announcement.
Trump himself said he would announce his choice Friday morning, ending months of speculation about Jerome Powell's replacement. Trump also hinted that the candidate would be "not too surprising" and is well-known in the financial world.
Warsh is a former Fed chairman (serving from 2006–2011) and was on Trump's radar in 2017, but Trump chose Powell at the time. If selected and confirmed, Warsh would replace Powell, whose term as chairman expires in May.
Sources also reported that Warsh visited the White House on Thursday, further strengthening the belief that he is the leading candidate. Meanwhile, prediction markets have Warsh's chances of winning ahead of other names.
Other names on Trump's shortlist include Kevin Hassett, Christopher Waller, and Rick Rieder. The selection process was reportedly closely monitored because Trump wanted a figure who would remain "market acceptable" but in line with his desire to cut interest rates more rapidly.
The market reaction was immediate: as bets on Warsh strengthened, stocks fell, bond yields rose, and the dollar strengthened. Investors considered Warsh to have a more hawkish reputation (tending to be tight on inflation), even though he has recently spoken out in favor of lower interest rates.
The impact on gold: a rising dollar and yields are usually a "counterforce" for gold, as gold does not provide a yield and becomes relatively less attractive when bond yields rise. That's why, amid rumors of Warsh's rise, precious metals tend to be under pressure even though the safe haven narrative remains. (asd)
Source: Newsmaker.id
