The new Chair

President a Trump announced yesterday the he was going to nominate the Fed chairman today. Although we don’t have any insights to who that person will be, Polymarket (see chart below) odds for Kevin Warsh jumped onmmeditely to 80% after a reported mentions that the news leaked out. Since Trump is unpredictable, we might see a last minute change, but this will not be a surprise. To welcome the new Fed chairman, the precious metals market woke up this early morning with a big drawdown (-16% for silver and -7% for gold) that is somehow stabilizing as this post is being written. Bonds and the U.S. Dollar are relatively quiet, which indicates that the move in metals is likely profit taking, perhaps waiting to see the final nomination and the potential impact it may have after a big run up. Also key, is how Trump will set the tone for the relationship with the new Fed chairman, and how the dynamic will work between the White House and the Fed. The bond market should give us the first reading on that relationship.

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