Kevin Warsh, the nominee for Chair of the U.S. Federal Reserve, called for a “radical system change” within the American central bank, including a new framework for controlling inflation and a reshaping of how the Fed communicates monetary policy to the public.

During his confirmation hearing before the Senate Banking Committee, Warsh held the central bank responsible for the inflationary wave that followed the COVID-19 pandemic, which continues to impact American households.

Warsh stated that the “fatal political errors over the last four or five years” continue to have lingering effects, noting that the Fed requires a “systemic change in the management of monetary policy,” including a “new and different framework for inflation.”

He added that the Fed's method of communicating with markets and the public “exacerbated the problem,” hinting at potential adjustments to the mechanism of quarterly economic forecasts and interest rate paths.

A tense hearing

The session quickly turned tense as Warsh avoided giving a direct answer to a question regarding whether President Donald Trump lost the 2020 election—a point Democratic Senator Elizabeth Warren considered a benchmark for testing his independence.

He also stated that he would proceed with his plan to sell assets valued at over $100 million without providing precise details regarding their nature or to whom they would be sold, noting that the proceeds would be invested in “traditional and simple” assets.

When asked about Trump’s pressure to cut interest rates, Warsh said that “Presidents tend to prefer lower rates,” adding that Trump “expresses this very publicly.”

Fed independence and inflation

Warsh emphasized that the independence of monetary policy is “essential,” but noted that he does not see politicians expressing their views on interest rates as a direct threat to that independence.

In his speech to the committee, he said that Congress tasked the Fed with achieving price stability “without justification or hesitation,” adding that “inflation is a choice, and the Fed must take responsibility,” and that “low inflation is the primary shield for the economy.”

He also called for interest rate cuts in the future, based on the premise that artificial intelligence and technological developments could boost productivity, even though other monetary officials believe this impact does not justify an immediate rate cut.

Political disagreement and timing uncertainty

These developments come amid ongoing tension between Trump and the current Fed Chair, Jerome Powell, whose contract officially ends on May 15, though the possibility of him remaining exists if a replacement’s appointment is delayed.

The timing of the Senate vote remains unclear amid sharp political division. Republican Senator Thom Tillis pledged to delay the vote until the Justice Department’s investigation into Powell is completed.

An unprecedented institutional crisis also looms, as the absence of a confirmed successor could lead to Powell’s continuation or the appointment of temporary leadership, within a complex Federal Reserve system that includes a central board, regional banks, tens of thousands of employees, and broad mandates ranging from monetary policy to banking supervision.

This situation represents one of the most sensitive phases in the history of the U.S. central bank, with growing debate over its independence and its dual role in the economy and politics.

Copper prices moved within a narrow range on Tuesday as investors awaited potential outcomes regarding peace talks between the United States and Iran, while also following the Federal Reserve Chair confirmation hearing that could provide significant indicators regarding the path of interest rates.

Benchmark three-month copper on the London Metal Exchange (LME) rose 0.1% to $13,288 per metric ton, after ending the previous session down 0.5%.

The United States had expressed confidence in the possibility of holding talks with Iran, while a senior Iranian official indicated that Tehran is considering participation; however, significant obstacles remain as the ceasefire deadline approaches.

Brokerage Sucden Financial stated that the lack of a clear market direction reflects investors waiting for clearer signals from macro-economic and geopolitical developments.

At the same time, the dollar index rose by 0.1%, making dollar-denominated metals more expensive for holders of other currencies, which typically pressures demand.

Investors are also focusing on the Senate hearing for Federal Reserve Chair nominee Kevin Warsh, which may test his independence from the White House amid repeated criticisms directed by the current administration at Fed Chair Jerome Powell for his delay in cutting interest rates.

China and supply pressure the market

In China, refined copper production rose to a monthly record high in March, indicating a lack of production cuts despite smelters' pledges last year to reduce output by 10% to counter declining treatment charges.

Mixed movements for other metals

In other metal markets:

* Aluminum rose 0.3% to $3,568 per ton amid continued concerns regarding supplies from the Gulf region.

* Zinc jumped 1.1% to $3,447.50, supported by hedging operations from investors closing short positions.

* Lead increased 0.4% to $1,981.

* Tin rose 0.7% to $51,040.

* Nickel climbed 0.2% to $18,290.

Broker Marex noted that net long positions on zinc reached their highest levels since the second quarter of 2024.

In a notable development, nickel contract trading on the Shanghai Futures Exchange will be opened to foreign investors for the first time starting from the evening trading session in China, a move that may enhance market liquidity.

Bitcoin rose above the $76,000 level during Tuesday's trading in Asia, continuing its recent gains driven by improved market risk appetite amid hopes for progress in talks between the United States and Iran.

The world's largest cryptocurrency recorded a 1.6% increase to reach $76,045, as investors moved toward high-risk assets.

Anticipation of U.S.-Iran talks supports sentiment

Markets benefited from expectations of diplomatic movement between Washington and Tehran in Islamabad before the upcoming ceasefire deadline, boosting the appetite for speculative assets like digital currencies.

These gains were an extension of last week's momentum, which saw U.S. stocks climb supported by receding geopolitical fears and rising technology shares.

However, analysts at IG noted that the market remains characterized by volatility, as rallies are followed by swift corrections, reflecting the difficulty of maintaining an upward trend at key resistance levels.

Bitcoin also received support from continued institutional investment flows, alongside activity from large investors (whales) who continue to buy on dips, helping to limit downward movement.

Kevin Warsh’s session under the microscope

Investors are also focusing on the Senate confirmation hearing for Kevin Warsh's appointment as Chair of the U.S. Federal Reserve.

The hearing is expected to provide significant signals regarding monetary policy directions, particularly interest rates, which are a decisive factor in determining digital currency market trends.

Warsh had previously emphasized the necessity of central bank independence while stressing the importance of its commitment to core monetary policy mandates without expanding into other issues.

Altcoins see limited increases

In the cryptocurrency market, alternative coins recorded slight gains:

* Ethereum rose 0.7% to $2,313.

* Ripple climbed 1.5% to $1.44.

Despite this improvement, trading remains within a limited range amid continued caution and anticipation of geopolitical developments and monetary policy decisions.

Oil prices declined on Tuesday, retreating from the previous session's gains as expectations grew that peace talks between the United States and Iran might be held this week, potentially paving the way for the return of more supplies from the Middle East, one of the world's most critical oil production hubs.

Brent crude contracts fell by 69 cents to $94.79 per barrel, while U.S. West Texas Intermediate (WTI) for May delivery dropped by $1.12, or 1.3%, to $88.49. The more active June contract also declined slightly to $90.27.

Prices had jumped sharply on Monday, with Brent rising 5.6% and WTI surging nearly 6.9% after Iran re-closed the Strait of Hormuz and the United States seized an Iranian cargo ship as part of its naval blockade.

Investors are currently focused on whether the potential talks this week will lead to an extension of the existing ceasefire or a final agreement, despite ongoing fears of disruptions to oil flows.

Tamas Varga, an analyst at PVM Oil Associates, stated that the market is leaning toward the belief that an extension between Washington and Tehran might be reached before the truce expires, adding that upcoming talks between Israel and Lebanon could also support this trend.

However, uncertainty remains as an Iranian official stated that no decision has yet been made regarding participation in the talks, while Iranian Foreign Minister Abbas Araghchi emphasized that "continued violations of the ceasefire" by the United States are hindering the negotiation process.

Continued concerns over global supplies

Shipping traffic through the Strait of Hormuz, where approximately one-fifth of global oil supplies typically pass, remains limited, heightening supply concerns. In this context, the EU Energy Commissioner warned that summer will be difficult for Europe due to fuel shortages, even in the best-case scenarios.

Citi warned that if disruptions continue for an additional month, losses could reach approximately 1.3 billion barrels, with the potential for prices to rise toward $110 per barrel during the second quarter.

Additional factors weighing on the market

At the same time, firefighters are still battling a blaze at the Russian port of Tuapse on the Black Sea, more than 24 hours after a Ukrainian drone attack. The port is a major hub for oil product exports and houses a primary Rosneft refinery.

In another development, Russia is expected to halt Kazakh oil exports to Germany via the "Druzhba" pipeline starting May 1, which could increase pressure on European supplies.

The market is also awaiting the weekly inventory report from the U.S. Energy Information Administration (EIA). Latest data showed a decrease in U.S. crude oil, gasoline, and distillate inventories due to lower imports and higher exports.

Analysts believe that the continued rise in U.S. oil and product exports may reflect tightening supply in Asia and Europe, potentially providing new support for prices in the coming period.