Financial markets took President Donald Trump ‘s pick of Kevin Warsh as the next Federal Reserve chair largely in stride, a sign investors see the former Fed governor as a credible steward of monetary policy despite expectations he may push for lower rates. Treasury yields were little changed on Friday immediately following the announcement, a sign investors saw little risk to inflation or the Fed’s independence. The dollar edged higher against major peers, while losses in stocks were mild and contained , suggesting relief that Trump’s pick was viewed as a steady hand rather than a political pawn. Gold and silver prices plunged as Warsh was seen as helping ease the concerns about U.S. currency “debasement” that have driven international investors into the metals. “I believe he brings a strong mix of deep expertise, broad experience, and sharp communication skills,” Mohamed El-Erian, chief economic advisor 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 institution’s political independence.” Warsh’s nomination is widely seen as removing the cloud over Fed independence that had been weighing on stocks and threatening to drive interest rates higher. With that risk receding, investors can refocus on corporate earnings and economic fundamentals rather than political interference at the central bank. Warsh, w …
