Analysis from a macroeconomics expert I’ve been following on Trump nominating Waller as the Fed Chair: Trump’s nomination of Waller as the Fed Chair candidate isn’t just a ‘personnel signal,’ but rather indicates that the U.S. macro policy mix is shifting to ‘rate cuts + balance sheet reduction’ (rate cuts to reduce debt, balance sheet reduction to tighten private credit). Rate cuts don’t necessarily mean easing; to maintain the stability of the USD/U.S. Treasury system under rate cuts, there must be some mechanism to compress private sector balance sheets, transferring risks and burdens from the government to the private sector. In non-U.S. countries, this ‘private sector deleveraging’ key variable can be likened to FX swap points/cross-currency funding costs. But since the USD, as the global reserve currency, has no ‘counterparty,’ the U.S.’s ‘alternative variable’ is oil prices (petrodollar system). Rising oil prices lead to USD inflows, strengthen demand for U.S. Treasuries/the USD system, and have a similar effect to ‘high swap points’: tightening private financial conditions and curbing private leverage. Conclusion chain: Waller’s nomination → Stronger USD → Higher oil prices → Weaker gold/silver; furthermore, the U.S. might be heading toward a man-made stagflation through ‘high oil prices + balance sheet reduction’ (inflation driven by oil prices, growth dragged down by balance sheet reduction). OXY EOG