Phil Rosen, co-founder of Opening Bell Daily and host for Full Signal, joins J.D. Durkin to discuss how Kevin Warsh’s Fed nomination jolted markets, reversing moves in gold, the dollar, and crypto.
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J.D.: Let's bring in the great Phil Rosen for what I am now officially dubbing Phil Rosen Friday. It's a holiday I just made up and why not? Thanks for being here.
Phil: Thank you for having me, J.D.
J.D.: Phil is a co-founder of Opening Bell Daily, host of Full Signal. What have you seen in these markets? Man what a day today.
Phil: Everything today was about Kevin Warsh, right? He came in and markets are treating it like the end of the debasement trade, at least in the one day trading session. That's what I took from it. Gold was down. Silver was down. The dollar was up. Which is pretty much a reversal of what we've seen for the last year. All the metals have been rallying for 12 months. Gold has having one of its worst years in decades.
And in a single day, that all somehow reversed because of one fed nominee, which is very unusual. I wasn't expecting that big of a reaction, frankly. But he comes in. He's pretty much a hard money guy, so people think that he's going to strengthen the dollar or at least prevent it from falling. Right. And that kind of takes out the need for insurance bet, insurance bets like gold and silver. So that explains the tale of the day today.
J.D.: Yeah. We don't really have that that rush to the safe havens we had at one point today. We had silver down as much as 35%. It tumbled all the way back down to $74 an ounce. It didn't quite finish the day at those levels. It kind of bounced up a little bit from there. What do you follow at the intersection of Kevin Warsh and cryptocurrency? What's on your radar there?
Phil: You know, I've seen this guy talk favorably about crypto in the past. I've seen him talk about Bitcoin. I don't know if he's going to come out and say anything new about it. think he's going to be much more careful about what he says moving forward.
But look, this guy, I think when people question whether he's qualified for this, I think they're mostly questioning Trump's judgment. I think whoever Trump nominated, people would say, this guy is not fit. He's not the right guy. We have something to say about it. But this guy has degrees from pretty much every Ivy League school you can think of. He was in the White House. He was the youngest fed governor ever. So this guy has plenty of chops, right? I'm not worried about that. I think the biggest concern is really, will he be a puppet? I don't think so. probably going to lower rates, but his take on the whole interest rates thing, similar to what Trump has said, it's not because the traditional ways of monetary policy.
He's not going to say we need lower rates because the economy is doing XYZ. It's going to be because AI is driving such a productivity boom that we can actually operate at a higher speed limit as an economy, so we can work with lower rates And I think that's very interesting. It's going to be a big bet. We've never really seen anything like this before, but I'm optimistic.
J.D.: The chairman of the central bank is an incredibly important position. But let's not forget this is still decision by committee. You got 12 members of the FOMC. One person individually does not make monetary policy for a data dependent fed. What else will you be looking forward to? It's not just the fed governors. You got the rotating names like Neel Kashkari. They now have a say at the table. It's not going to be just Kevin Warsh.
Phil: Yeah. J.D. that's a great point. I think people think whoever's the fed chair determines monetary policy. But he's got to convince everybody to vote with him. something Jerome Powell was very good at was getting everyone on the same page.
So most often with Powell everyone would vote the same way. Recently we've seen some dissents, but that's you could say that's a political gambit in the last year. But generally Powell was very effective at getting everyone to vote the same direction. I think Warsh is going to have his work cut out for him, just because he's a Trump appointee and people will know, hey, what are the politics going on here? Should we just, you know, take the other side? Who knows? I think the reasons to be optimistic are more convincing at this point for me though.
J.D.: Unfortunately, we ran out of time. not get to ask you more about big tech earnings, but we do have Alphabet and Amazon crossing the tape after a couple closes next week. That of course will track very, very closely after Apple and some of the other names kicked off their earnings report earlier this week.
The great Phil Rosen for Phil Rosen Friday down here at the Big Board Thanks for being here as always brother.
Phil: Thank you,J.D.