Silver experiences an unprecedented decline

Market Turmoil Follows Trump’s Fed Chair Nomination

Silver experienced a dramatic drop of 26% during the day, marking one of its steepest declines ever. This sharp fall came after Donald Trump revealed his intention to nominate Kevin Warsh as the next Federal Reserve chair, easing concerns about rising US inflation.

On Friday, silver prices plummeted by up to 30%, the largest single-day loss on record, following the President’s announcement. By 7:30pm London time, silver was trading at approximately $83.81 per troy ounce, down around 26%.

The previous day, silver had soared to a historic high above $121, fueled by speculation that Trump might appoint a compliant Fed chair willing to lower interest rates. However, Warsh is widely viewed as a credible and market-oriented candidate, known for supporting higher rates and defending the central bank’s independence.

Gold was not immune to the volatility, tumbling nearly 10% to $4,850 per ounce—its most significant intraday loss since the 2008 financial crisis. Earlier in the week, gold had surged past $5,000 for the first time and reached almost $5,600 on Thursday.

While precious metals suffered, the US dollar rebounded, strengthening just days after hitting a four-year low. Meanwhile, US equities declined as investors reassessed the likelihood of future rate cuts. The S&P 500 slipped 0.3%, the Dow Jones fell 0.4%, and the Nasdaq Composite dropped 0.7%.

Evening Summary

07:31pm

Thank you for following our coverage today. To recap: Donald Trump has nominated Kevin Warsh, seen as a moderate and market-friendly figure, to lead the Federal Reserve. US stocks fell as traders digested the news, and silver suffered its largest-ever intraday drop, falling over 25% to $85.31 an ounce after hitting record highs earlier in the week. Gold also saw its biggest single-day loss since 2008.

Wall Street Extends Losses

06:31pm

All major US stock indexes deepened their declines as the market reacted to Warsh’s nomination. The Nasdaq Composite dropped 1.1% to 23,438 points, the Dow Jones fell nearly 1% to 48,582, and the S&P 500 lost 0.8% to 6,913.

Political Opposition to Fed Chair Nominee

06:12pm

Republican Senator Thom Tillis reiterated his intention to block Warsh’s confirmation as Fed chair until the ongoing criminal investigation into current chair Jerome Powell is resolved.

Silver’s Steepest Drop in 18 Years

05:52pm

Silver experienced its largest intraday decline since 2008, falling 26% to $85.31 an ounce and erasing gains from the previous two weeks. The drop followed Trump’s announcement of Warsh as his Fed pick, which also sent gold and copper prices lower.

Trump Declines to Discuss Rate Cuts with Warsh

05:41pm

President Trump stated it would be “inappropriate” to ask Warsh about his stance on interest rate cuts, though he added that Warsh is inclined to lower rates.

Dollar Strengthens After Fed Nomination

05:34pm

The US dollar continued to gain following Trump’s nomination of Warsh. The dollar index rose 0.8% to 96.95, with analysts generally viewing Warsh as a moderate and market-friendly choice.

Cryptocurrency Market Reacts

05:28pm

Bitcoin declined 2.3% as investors processed the Fed news and tech stock sell-offs, extending its year-over-year losses to over 20%. Solana also dropped about 2%, and is down 50% compared to last year.

European Markets Close Higher

05:04pm

UK and European stocks edged up at the close after Trump’s announcement. The FTSE 100 gained 0.5% to 10,224, while Germany’s Dax rose 0.9% and France’s Cac increased 0.7%.

White House Adviser Praises Warsh Nomination

04:57pm

Kevin Hassett, Trump’s economic adviser, called Warsh’s nomination a “great choice,” expressing satisfaction with his own current role as director of the National Economic Council.

Silver and Gold Remain Elevated Year-on-Year

04:42pm

Silver dropped 18% to $93.83 an ounce after the Fed announcement, having reached a new high of $121.65 the previous day. Gold also fell nearly 7% to $4,976 an ounce, though both metals remain significantly higher than a month ago.

US Stocks Continue to Slide

04:28pm

Wall Street continued its downward trend, with the Dow Jones down 1% to 48,628, the Nasdaq Composite off 0.7% to 23,516, and the S&P 500 down 0.4% to 6,943. Analysts see Warsh as a moderate, but note he may align with Trump’s desire for aggressive rate cuts.

Warsh’s International Experience

04:15pm

Though Trump has nominated Kevin Warsh for Fed chair, the Bank of England previously passed on him as a candidate to succeed Mark Carney. Warsh, who became the youngest Fed governor at 35, also contributed to a major transparency report for the BoE in 2014.

Asset Managers Weigh In on Warsh

03:52pm

Some investors view Warsh as closely aligned with Trump’s monetary policy preferences, though he has historically been a policy hawk. Warsh has advocated for reducing the Fed’s balance sheet and changing the approach to inflation forecasting, though details remain sparse.

Fed Chair’s Limited Voting Power

03:47pm

Analysts note that even as chair, Warsh would only have one vote on the Federal Open Market Committee and would need to persuade other members to support significant rate cuts. His tenure would extend beyond the President’s, ensuring some independence.

Deutsche Bank: Warsh Must Persuade Colleagues

03:18pm

Deutsche Bank economists say Warsh would need to convince the FOMC that rate cuts are warranted, which is unlikely unless the labor market weakens or inflation eases significantly. They suggest that productivity gains from AI and deregulation could provide a rationale for lower rates.

Carney Endorses Warsh

03:03pm

Mark Carney, former Bank of England Governor and current Canadian Prime Minister, praised Trump’s choice of Warsh as “fantastic” for leading the world’s most influential central bank at a critical time.

Wall Street Opens Lower

02:46pm

US stocks opened in negative territory after new inflation data and Trump’s Fed nomination. The S&P 500 fell 0.25% to 6,951, the Dow Jones lost 0.3% to 48,938, and the Nasdaq Composite slipped 0.4% to 23,594.

Fed Governor Calls for More Easing

02:41pm

Federal Reserve Governor Christopher Waller dissented from the decision to hold rates steady, arguing that more monetary easing is needed due to a weakening labor market and inflation near target levels. He expressed concern about planned layoffs in 2026 and advocated for lowering rates to support employment.

Dollar Rises on Inflation Data and Fed News

02:13pm

The dollar strengthened after new inflation figures and Trump’s announcement of Warsh as his Fed nominee. The dollar index climbed 0.4% to 96.65 in morning trading in New York.

US Wholesale Inflation Surges

02:05pm

US wholesale inflation rose more than expected, with the Producer Price Index up 0.5% in December and 3% for the year, according to the Bureau of Labor Statistics. The data was delayed due to the government shutdown.

Markets Welcome Moderate Fed Pick

01:53pm

Wealth managers say investors are relieved by Trump’s selection of Warsh, a moderate, for Fed chair. This move reduces uncertainty and is expected to calm market volatility, though Warsh’s actions will be closely scrutinized for signs of Fed independence.

Warsh Considered a Credible Nominee

01:40pm

Investment firms describe Warsh as a credible candidate with a strong track record in crisis management and independent thinking on monetary policy. He is expected to support lower rates but is unlikely to make major changes to the Fed’s operating framework.

Senator Opposes Warsh Nomination Amid Powell Probe

01:30pm

Senator Thom Tillis has pledged to oppose Warsh’s confirmation until the investigation into current Fed chair Jerome Powell is resolved. The probe centers on Powell’s testimony regarding costly Fed building renovations.

US Borrowing Costs Ease

01:16pm

US borrowing costs fell after Warsh’s nomination. The yield on 10-year Treasury bonds rose slightly to 4.25%, but remained below earlier highs. Two-year Treasury yields, a key short-term benchmark, dropped to 3.54%.

Dollar Holds Steady After Fed Announcement

12:44pm

The dollar remained firm against major currencies following Trump’s nomination of Warsh. The pound slipped 0.2% against the dollar, and the euro was down 0.3%.

Warsh Seen as a Safe Bet

12:30pm

Economists consider Warsh a relatively safe choice for Fed chair, citing his history of advocating for higher rates and a smaller Fed balance sheet. Some warn that his optimism about AI-driven productivity gains could lead to underestimating inflation risks.

Profile: Kevin Warsh

12:15pm

Kevin Warsh, 55, became the youngest Fed governor in 2006 at age 35. He opposed some of the Fed’s low-rate policies during the financial crisis and has often warned about inflation. Warsh is currently a fellow at the Hoover Institution and teaches at Stanford. He is also related by marriage to Ronald Lauder, a major Trump supporter.

Wall Street Reacts to Fed News

12:07pm

US stock indexes trimmed some losses in premarket trading after Trump’s nomination of Warsh. The Dow Jones was down 0.3%, the S&P 500 fell 0.4%, and the Nasdaq 100 dropped 0.5%.

Trump Names Warsh as Fed Chair

11:57am

Donald Trump officially nominated Kevin Warsh as the next Federal Reserve chair, expressing confidence that Warsh will be remembered as one of the best in the role.

Silver Retreats from Record Highs

11:41am

Silver prices fell as much as 16% from Thursday’s record high of $121.65, as traders reacted to the prospect of Warsh leading the Fed. Gold also declined more than 5% in early trading.

Gold Drops Sharply Ahead of Fed Announcement

11:24am

Gold plunged up to 8%, falling below $5,000 an ounce after reaching nearly $5,600 the previous day. The sell-off came as Trump prepared to announce his Fed chair pick, with Warsh expected to be chosen.

Dollar Rises on Fed Speculation

11:10am

The dollar strengthened as markets anticipated Trump’s Fed chair announcement. The dollar index rose 0.4% to 96.57, reversing earlier losses as Warsh emerged as the likely nominee.

Morning Market Overview

10:58am

Good morning. The dollar rebounded after Trump signaled his intention to nominate Kevin Warsh as the next Fed chair. Here are the key stories to start your day:

• Regulators question ‘shadow banks’ over hidden losses – The Financial Conduct Authority has increased scrutiny on non-bank lenders.
• UK sees record solar installations driven by net zero policies – 262,000 new installations in 2025, up 37% year-on-year.
• Fewer benefit claimants move into work – Only one in fourteen transitioned to employment monthly in 2025.
• EU baggage rules could raise airfares by 25% – easyJet warns new regulations will increase costs and disrupt flights.
• Asda underpaid 53,000 employees due to IT error – The supermarket is reviewing its payroll systems after discovering mistakes in holiday and sick pay calculations.

Market Recap

The FTSE 100 and European stocks advanced after Trump indicated his preferred choice for Fed chair, with Kevin Warsh widely expected to be nominated. Warsh is seen as favoring lower interest rates, but is considered less radical than other potential candidates and more cautious about aggressive monetary stimulus.

In morning trading, the FTSE 100 rose 0.2% and Paris’s Cac 40 gained 0.4%. Asian markets were mixed, with declines in Hong Kong, Shanghai, Tokyo, Sydney, Singapore, Taipei, and Bangkok, while Seoul, Manila, and Wellington saw gains. Wall Street closed mixed on Thursday, with the Nasdaq Composite down 0.7% to 23,685, the S&P 500 off 0.1% to 6,969, and the Dow Jones up 0.1% to 49,072.