Trump Names Warsh for Fed, Markets React

Gold and silver prices plummeted on Friday, January 30, 2026, following President Donald Trump's nomination of Kevin Warsh to lead the Federal Reserve. This significant market movement, which saw European stocks rise and Wall Street dip, reflected investor reassurance over the choice for the crucial central bank role, according to reports from bssnews.net.

President Trump officially announced his selection of former Federal Reserve official Kevin Warsh on Truth Social, praising him as a potentially "GREAT Fed Chairman." This public endorsement underscored the administration's confidence in Warsh to steer the nation's monetary policy, as reported by CBS News on Friday.

The impact on precious metals was immediate and dramatic, with gold experiencing its largest single-day decline since 1983 and silver plunging over 30%, marking its worst day since 1980, according to mexc News. This sharp sell-off was largely attributed to profit-taking by investors who had previously bought into these assets.

Investors reportedly found reassurance in Warsh's nomination, viewing him as a credible and more orthodox choice for the Federal Reserve's top position. This sentiment helped alleviate concerns about the central bank's independence and potential political interference, as noted by Nation Thailand.

The nomination also triggered a notable surge in the value of the US dollar, which further weighed heavily on precious metal prices. A stronger dollar makes dollar-denominated commodities like gold and silver more expensive for foreign investors, exacerbating the sell-off, Nation Thailand reported.

Kevin Warsh brings a wealth of experience, having served as a Federal Reserve Governor from 2006 to 2011, making him the youngest governor in history at 35. His background includes roles as an economic advisor to President George W. Bush and a Wall Street executive, as detailed by PBS News on Friday.

• Background and Expertise: Kevin Warsh's tenure as a Federal Reserve Governor from 2006 to 2011 was during a pivotal period, including the 2008 financial crisis. He was instrumental in navigating the crisis and served as a key liaison between the central bank and financial markets, according to The Washington Post. His academic affiliations at Stanford University's Hoover Institution further solidify his economic credentials.

• Monetary Policy Stance: While historically considered an inflation hawk, Warsh has recently shifted his stance, advocating for lower interest rates in 2026, driven by a belief in potential productivity gains. He has also been a vocal critic of the Fed's "mission creep" and quantitative easing, proposing a smaller balance sheet, as reported by invesco US.

• Significance of Fed Chair: The Chair of the Federal Reserve is one of the most powerful economic positions globally, influencing interest rates, inflation, and employment. The appointment process involves presidential nomination and Senate confirmation, with a four-year term, as outlined by Congress.gov. This role significantly impacts both domestic and international financial markets.

• Political Context and Predecessor: Warsh's nomination comes as President Trump has repeatedly criticized current Fed Chair Jerome Powell for not lowering interest rates aggressively enough. Powell's term expires in May, and a Department of Justice investigation into him has added complexity to the transition, according to The Washington Post.

• Market Interpretation and Dollar Impact: The market's positive reaction, particularly the dollar's strength and the decline in safe-haven assets, suggests investors perceive Warsh as a more predictable and potentially growth-oriented choice. This view contrasts with previous concerns about political influence over the Fed, as highlighted by CBS News. The rising dollar made gold and silver less attractive for international buyers.

• Confirmation Challenges: Despite initial market relief, Warsh's confirmation by the Senate is not guaranteed. Some politicians have vowed to block any Trump Fed nominee until the DOJ investigation into Powell is resolved, potentially leading to a contentious confirmation process, as noted by Real Estate News.

• Potential Future Developments: If confirmed, a Warsh-led Fed could signal a shift towards a more disciplined monetary policy, potentially focusing on balance sheet reduction and a more cautious approach to market intervention. Edward Jones analysts suggest his nomination represents a "dovish shift" for the Fed chair role, potentially leading to one or two rate cuts this year.