Gold snapped back to around $4,090 per ounce after Federal Reserve Chairman Kevin Warsh told attendees at the ECB Forum in Sintra, Portugal that inflation risks had “come down in recent weeks.” The roughly 2% rebound marks a sharp reversal from the selling pressure that had built up on expectations of aggressive rate hikes under the Fed’s new leadership.
What Warsh actually said
Warsh, who was sworn in as Fed Chair on May 22, 2026, used his Sintra appearance to reaffirm the central bank’s commitment to a 2% inflation target. That number matters because it serves as the Fed’s north star for policy decisions, essentially the benchmark that determines whether rates go up, down, or sideways.
The shift in tone is significant because Warsh has also signaled a reduction in forward guidance, the practice of telegraphing future policy moves to markets well in advance. Less forward guidance means less predictability, meaning traders have to pay closer attention to every word that comes out of the Fed chair’s mouth.
Warsh served as a Fed governor from 2006 to 2011, a period that included the global financial crisis. He succeeded Jerome Powell, inheriting an economic environment where inflation has been running above 4%.
