Trump’s nomination of Kevin Warsh as the next Fed Chair sparked a brief dollar rebound on January 30, but analysts suggest the rally was largely driven by a strong Chicago PMI reading rather than the appointment itself. Robin J Brooks, a former Goldman Sachs trader, argues that the dollar’s weakening cycle is far from over.
Warsh, who campaigned for the role promising rate cuts, believes Fed policy is currently too tight, a stance that could lead to deeper, front-loaded cuts before the 2026 midterms. Meanwhile, the sharp pullback in precious metals, including a significant drop in silver, is attributed to a speculative bubble rather than a hawkish market reaction. The structural debasement trade, fuelled by reckless global fiscal policy, is expected to reassert itself soon.
