Trump’s Fed Pick Made the Market Panic

The universe truly does possess a wicked sense of humor.

Late last week, I sent you a dispatch in which I had penned this paragraph:

Silver—sweet, misunderstood, underappreciated silver—has finally crossed into triple-digit territory. That “impossible” milestone that pundits said would never happen?

A day later?

Boom! goes the dynamite.

Silver, along with gold, copper, stocks, apple pies, dog collars, Meinke mufflers, and pretty much everything else in life, crashed.

Bigly.

Gold tumbled 9%

Silver, 26%.

All over Twitter/X, the bloodied and the braggarts were insisting the metals bull run is dead.

Silly, rabbit. Not even close.

The proximate cause of the Friday Market Massacre was one Donald J. Trump announcing that his choice to replace Jerome “To hell with what you want, Mr. President ” Powell with Kevin Warsh.

Warsh once served on the Fed Board of Governors about 20 years ago. Today, he’s a fellow at the Hoover Institution, a conservative think tank, and he’s a lecturer at the Stanford Graduate School of Business. And many a moon back he was an economic advisor to Prez. Baby Bush.

The markets sold off because they see Warsh as more independent than some of the other names that were on Trump’s List of Future Sycophants.

And therein lies the Big Mistake: Assuming Warsh will be independent.

Trump has made abundantly clear his position that his Fed chair nomination must play by Trump’s rules, and appease Trump’s wants. Period.

In Trump’s own words:

“Anybody that disagrees with me [on interest rates] will never be the Fed Chairman!” Truth Social post in December 2025.

                  “A president should have something to say [about Fed policy]. I made a lot of money with business, so I think I have a better understanding of it ​than Too Late Jerome Powell.” Also, regarding some GOP lawmakers pushing back against the White House’s attack on Fed independence, “I don’t care. There’s nothing to say. They should be loyal. That’s what I say.” Reuters interview, January 2026.

But perhaps the most important quote to remember came a day after the Warsh nomination announcement. Aboard Air Force One, a reporter asked Trump what his expectations are for Warsh regarding interest rates:

He’s going to lower them. I mean, if you watch him on television, you know, because I watch interviews and statements. I hope he’s going to lower them, but he’s going to have to do what he wants to do.

Now, if you know Trump, you know the last couple of sentences are just tossed in to keep the media from going nuts on him. It’s the first part of the comment that we have to pay attention to.

As I regularly feel the need to say, I’m not being purposefully political here. I am simply sharing what has happened when you look at the transformation of people like Howard Lutnick, Scott Bessent, Marco Rubio, and others.

And I do so because the implications flow through to your personal financial life.

Warsh will be no different than any of Trump’s other yes-men.

Warsh has publicly acknowledged that interest rates should come down, though many economists would debate that necessity. Warsh told Fox Business that he has “sympathy with the president’s frustrations” about the Federal Reserve not cutting interest rates enough. He has spoken of “regime change” at the Fed, in line with what Trump wants.

And I tell you all of this because it speaks to Wall Street’s overreaction to the news.

Investors assume Warsh will be hawk because that defined his past period on the Fed.

No one seems to be taking Donald Trump at his word.

But if there’s anything we’ve all learned over the last decade of Trumpism, it’s that Donald Trump is literal. He tells you where the puck is going to be… and lo and behold, that’s where the puck ends up. Consistently.

Too many players try to second guess Trump. They try to downplay his comments or paint them in a different light.

Nope.

So, here’s what’s going to happen:

• The Senate will approve Warsh as the next Fed chair.
• Warsh will enter with one mandate: lower interest rates to appease Trump’s belief that America needs—née, deserves—1% interest rates.
• US rates will come down, a shock to Wall Street, which is wrongly overlying Warsh’s past with his Trumpian mandate.
• The US dollar will slide against major world currencies, because of “interest rate differential,” which I’ve written about previously.
• Gold, silver, copper, crypto… they’ll all shoot higher.
• And Donald Trump will be happy!
• But inflation will heat up again.
• Stocks likely fall because of fears that Warsh did not represent Fed independence the way that investors initially assumed.
• Treasury prices decline and market interest rates rise because global investors now realize the Fed has become politicized.
• Housing prices decline because rising interest rates make existing home prices unaffordable. (Note: Mortgage rates are based on market rates, not the rate the Federal Reserve plays with.)
• CD rates decline to nothing—again—meaning you’re going to want to own income stocks, particularly those based overseas, which will benefit from a dollar in decline. I’d throw into the mix preferred stocks, Master Limited Partnerships, REITs, and Canadian Income Trusts (all of which are part of my upcoming Retirement Income Masterclass, for anyone looking to build a portfolio that survives what’s coming).

In short, the Friday Market Massacre is a blessing in disguise for investors who understand that Donald Trump is not hiring Kevin Warsh to “do what he wants to do” with interest rates.

He’s hiring Kevin Warsh to do what Donald Trump wants done with interest rates.

Those who understand that distinction have an opportunity, and yes, it very much includes catching a hellacious rebound in gold, silver, copper, and crypto as this new Fed era begins to unfold. But on a more fundamental level, for anyone in or near retirement, the smarter move is to pair that upside with a plan that doesn’t depend on perfect timing or calm markets.

That’s why in my upcoming Retirement Income Masterclass, I’ll show you how to turn moments like this into durable income… how to position assets so you can benefit from rebounds and still have cash flow you can count on when markets inevitably misbehave again. Because the goal at this stage isn’t just to be right about the next move, it’s to make sure your income keeps showing up no matter what the Fed, Wall Street, or Washington throws at you.