Dollar Rallies and Precious Metals Plummet on Trump's Fed Chair Pick

Keven Warsh's nomination as Fed Chair sparks market reaction

Jan. 30, 2026 at 4:39pm

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The dollar index rose 0.79% on Friday after President Trump nominated Keven Warsh as the next Federal Reserve Chair. Warsh is seen as more hawkish than other candidates, leading to a rally in the dollar and a plunge in gold and silver prices. The move came amid stronger-than-expected US economic data and a tentative deal to avert a government shutdown.

Why it matters

Warsh's nomination as Fed Chair signals a potential shift towards more hawkish monetary policy, which could impact financial markets and the broader economy. The reaction in the dollar, precious metals, and other assets highlights the market's sensitivity to changes in Federal Reserve leadership and policy expectations.

The details

The dollar index rose 0.79% on Friday after President Trump nominated Keven Warsh as the next Federal Reserve Chair. Warsh is seen as more hawkish than other candidates, often emphasizing inflation risks during his tenure as a Fed Governor from 2006-2011. The dollar also gained after stronger-than-expected US economic data, including a rise in December producer prices and an expansion in the January MNI Chicago PMI. Precious metals plummeted, with February gold falling 11.37% and March silver sinking 31.37%, as the stronger dollar and hawkish Fed expectations fueled liquidation of long positions.

  • On Friday, the dollar index rose 0.79%.
  • On Thursday, President Trump said he reached a tentative deal with Senate Democrats to avert a US government shutdown.

The players

Keven Warsh

Nominated by President Trump as the next Federal Reserve Chair. Warsh is seen as more hawkish than other candidates and often emphasized inflation risks during his tenure as a Fed Governor from 2006-2011.

President Trump

Nominated Keven Warsh as the next Federal Reserve Chair and reached a tentative deal with Senate Democrats to avert a US government shutdown.

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What they’re saying

“With inflation above target and the risks to the outlook evenly balanced, I believe it would be unadvisable to lower the fed funds rate into accommodative territory at this time.”

— Alberto Musalem, St. Louis Fed President (Nasdaq.com)

“Monetary policy is still restricting economic activity, and economic data make it clear to me further easing is needed.”

— Christopher Waller, Fed Governor (Nasdaq.com)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

Warsh's nomination as Fed Chair signals a potential shift towards more hawkish monetary policy, which could have significant implications for financial markets and the broader economy. Investors will closely monitor the market's reaction and any further developments related to the Federal Reserve's leadership and policy direction.