NAB Morning Call Gold goes cold as Fed takes a Warsh
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Feb 1, 2026 Ray Atchal, NAB markets economist who covers FX, macro and monetary policy, breaks down market whiplash after Kevin Warsh's Fed nomination. He talks about the sharp gold and silver sell‑off, the dollar and AUD swings, implications for Fed balance‑sheet policy and rate‑cut timing. Ray also surveys China PMI weakness, sticky Japan inflation, and a packed central‑bank week.
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Gold Rally Was Broader Fiat Fear
- Precious metals ran up on broad fears of fiat debasement, not solely Fed independence.
- Kevin Walsh's nomination provided a catalyst for speculative sellers to exit gold and silver ETFs.
Balance Sheet Limits May Define Walsh
- Walsh is vocally opposed to using the Fed's balance sheet beyond traditional monetary policy.
- That stance could trigger debate at the Fed over balance-sheet shrinkage while long yields rise on expectations of less Fed support.
Curve Steepening, Front End Calm
- Markets priced a steeper long end of the curve while front‑end rates eased slightly after Walsh's nomination.
- The market still expects the Fed to keep rates on hold for an extended period despite Walsh's hawkish reputation.