New Fed Chair, New Market Risks for Gold and Silver

It has been eight years since there has been an FOMC meeting led by someone other than Jerome Powell. A new era begins on Wednesday with the chairmanship of Kevin Warsh. Will things change or will they stay the same? That question makes it a rather interesting week.

What a long, strange trip it has been since The Great Financial Crisis of 2008. Two decades ago we dealt with Ben Bernanke, who was succeeded by Janet Yellen. Yellen moved on and her place was taken by Jerome Powell. Now Kevin Warsh, who was a Fed Governor in 2008, replaces Powell. The circle of life, in a sense.

Interest Rate Expectations And Market Outlook

Warsh inherits a Fed that was easing off its rate cut expectations at Powell's last big meeting in March. The year began with the FOMC projecting two rate cuts in 2026, but with the Iran War beginning on March 1, the expectation was trimmed to just one cut when the FOMC published their quarterly Summary of Economic Projections (SEP) at the conclusion of the March FOMC.

Quarterly Summary of Economic Projections (SEP)

As I type this on Monday, June 15, the market projections are now for zero cuts this year. In fact, fed funds futures are pricing in a 50/50 chance of a rate hike before year end. That's quite a shift from where things stood in late 2025 and a primary reason gold and silver prices have fallen so sharply from their early 2026 highs.

Target Rate Probabilities for 9 December 2026 Fed Meeting

Track current precious metals trends through the spot price charts, including the gold spot price chart and silver spot price chart.

Kevin Warsh And The Future Of Monetary Policy

So what can we expect from Warsh on Wednesday? The statement that appears at 2:00 pm ET is likely to be benign, but the updated quarterly SEP might be interesting. Either way, the real action will come in his first press conference, which is slated to begin at 2:30 ET. What will Warsh say and how will he say it?
Since Warsh's name was first put forth earlier this year, the assumption has been that he will be some sort of "hawk"—at least more "hawkish" than Powell and his predecessors. So does that mean higher interest rates are incoming? I don't think so.
Why? Well, think about it for a minute. In nominating Warsh, do you really believe he sat there in an Oval Office job interview and told both Trump and Bessent that he intended to raise interest rates? Trump had been railing against Powell for over a year and trying to cajole him into cutting rates, yet Trump is now going to replace Powell with someone who pledges to hike them? That makes no sense.
Instead, I expect Warsh to be "dovish" and work in a triad with Trump and Bessent to lower rates, either by words or by force. I wrote about this late last year in my annual forecast. Perhaps it's time to look it over again?

• What Drove the Historic Surge in Gold and Silver Prices in 2025?

Gold And Silver Investment Outlook

With a potential peace settlement in Iran, do some of the items discussed in that 2025 forecast begin to move back to the forefront? Negative real interest rates, continued asset purchases, Yield Curve Control, and a weaker U.S. dollar are all back on the table as options for Trump/Bessent/Warsh. And as the move back to financial reality sets in, why wouldn't we expect the bull market in precious metals to resume? Investors can explore physical precious metals through gold bars and coins and silver bars and coins. For additional market insight, see Central Bank Gold Demand And Price Trends and COMEX Gold Price Analysis And Technical Support.

Precious Metals Market Trends To Watch

So pay attention on Wednesday. Watch what Warsh says and listen to how he says it. If Warsh is indeed a monetary dove camouflaged as a hawk, then the markets are severely mispricing the precious metals and have been since late January. That could all begin to change in a few days. Be ready.