If confirmed, Trump’s Fed-chair nominee would face several treacherous balancing acts.

By Samuel Indyk and Rae Wee LONDON, Feb 2 (Reuters) - The dollar held on to gains on Monday as investors weighed what a Federal Reserve under Kevin Warsh might look like, while falling precious metals and oil prices kept commodity-linked currencies in check.

Warsh has repeatedly and loudly blasted his old colleagues over the years for letting the bank’s assets balloon, prompting speculation in markets that he could move quickly to have them drawn down

The U.S. dollar strengthened, signaling the market's approval of Warsh's credibility and perceived autonomy, but safe-haven assets gold and silver plummeted.

Key Takeaways Kevin Warsh’s record shows a former crisis-era Fed hawk who now appears more open to rate cuts, creating uncertainty about how he would balance inflation risks with President Trump’s push for lower interest rates.

"Should Warsh find himself in the minority, he would have to decide whether he would tolerate being outvoted."

Kevin Warsh’s long-held desire to slash the Federal Reserve’s balance sheet is likely to clash with Donald Trump’s relentless calls for the central bank to depress long-term borrowing costs, big fund managers have said.

Warsh has recently advocated for lower rates, but a smaller Fed balance sheet.