Let’s get this straight from the top: The Fed did nothing yesterday, again.

But it was the kind of “nothing” that says everything.

For the fifth straight meeting, Jay Powell and his merry band of monetary technocrats held the federal funds rate in the 4.25% to 4.50% range. On the surface, this was just a continuation of the status quo. But under the hood, the gears are grinding, and a few bolts flew off the machine.

Two board governors—Michelle Bowman and Christopher Waller—broke ranks and voted for a cut. It was the first time since 1993 that more than one Fed governor dissented in the same meeting. That’s not just rare. That’s historic.

And while the FOMC statement oozed dovishness—highlighting “moderating growth” and suggesting an easing bias—Powell’s press conference yanked the rug out from under any soft-landing narrative. He poured cold water on the idea of a September cut by calling current policy “modestly restrictive” and warning against moving too soon.

Markets—never ones to handle nuance with grace—flinched. Hard.

Dollar Up, Miners Down—Again

If you’re a precious metals investor, yesterday felt like getting mugged in broad daylight.

The U.S. dollar surged to a two-month high, thanks to Powell’s “not so fast” comments. Treasury yields jumped, especially on the short end. That’s the kind of environment where gold and silver prices get carpet-bombed… and the miners take the shrapnel.

Here’s what happened to the portfolio yesterday:

If this looks like a massacre, that’s because it was. These are the kinds of moves you’d expect after a hawkish surprise, not a “no change” decision.

But markets don’t trade the facts. They trade the narrative. And the narrative shifted from “rate cuts soon” to “Jay’s playing chicken with inflation.”

To be clear, I’m holding steady, as I think Powell will have to cut rates in September, and we’re stuck with inflation, especially when the OBBB spending kicks in.

Why the Miners Got Clobbered

The sell-off wasn’t about company fundamentals. It was about real rates and the dollar.

• A higher dollar crushes gold and silver prices. These metals are dollar-denominated, so a rising greenback makes them more expensive for non-dollar buyers.
• Higher yields increase the opportunity cost of holding non-yielding assets like gold and silver. Why own shiny rocks when you can get 5% in a money market fund?
• And Powell’s refusal to commit to a September cut means the “carry trade” remains intact for longer. That’s bad news for commodities and even worse for leveraged miners.

Yesterday’s message? The Fed may talk dovish, but Jay Powell still owns the mic—and he’s not ready to sing “Kumbaya” just yet.

Bowman and Waller: Potential Powell Replacements?

Both dissents were notable for their authors.

Michelle Bowman has been a reliable hawk for years. Her shift toward dovishness hints at deep concern about the real economy—or at least the political pressure Trump’s been applying.

Christopher Waller’s dissent was less surprising. He’s been openly skeptical of keeping rates elevated, and he’s seen as a potential Powell replacement. But having both of them on the record—during the same meeting—is a signal that the internal debate is heating up fast.

Whether that tips the scale toward a September cut remains to be seen.

The Big Picture

The Fed now faces three threats simultaneously:

1. Sticky Inflation: Trump’s new tariffs, combined with full employment, risk reigniting consumer price pressures.
2. Political Pressure: Trump wants cuts—fast. He needs the economy juiced before the 2026 midterms.
3. Internal Fracture: The Fed hasn’t had this much open disagreement since before the dot-com bubble.

Meanwhile, the market is reacting with its usual emotional maturity: buying dollars, dumping metals, and punishing the miners as if they had personally offended Jerome Powell.

Wrap Up

The next FOMC meeting in September could be Powell’s most difficult yet.

If inflation stays tame and growth slows, he’ll face pressure from inside and outside the Fed to cut.

If inflation spikes again, he risks being labeled the Arthur Burns of our time—too soft, too soon.

Either way, gold and silver investors should buckle up.

The real volatility hasn’t even started.