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Christopher Whalen: The Fed Has Lost Control of Interest Rates

VRIC Media Aug 11, 2026

Summary

Credit default swaps on U.S. debt priced in euros lead gold by several months, the guest argues, giving institutional investors a forward benchmark.

Short-term rates will be forced down by Treasury and Fed actions, but long-term yields stay above 5% on deficit fears, the guest predicts.

Mortgage rates near 7.5% could fuel a housing reset around 2028, the guest predicts, as speculative business-purpose loans reach their limits.

Silver offers more attractive exposure than gold because structural industrial demand and supply shortages support the metal, the guest argues.

The dollar's reserve role may shrink toward 40% of global reserves, the guest argues, while its trade-settlement dominance persists without substitute.

Darrell Thomas's takeaways

  • Top takeaway The host frames the discussion around credit default swaps on U.S. debt as a rarely-discussed driver of gold prices and introduces Whalen to the VRIC audience.
  • He shares that he is diversifying into Swiss franc and a bit of Norwegian Krone, prompting Whalen's commentary on the risks of holding non-dollar currencies.

Christopher Whalen's takeaways

  • Top takeaway The guest argues the Fed has effectively lost control of short-term rates, saying markets have already moved and that the Fed and Treasury will combine to force short rates down over the next year.
  • He sees no September rate hike despite hawkish talk, arguing that raising short rates would do little against supply-driven inflation from the war with Iran and destroyed Gulf productive capacity, including diesel up more than 30% since February.
  • He expects the 10-year Treasury to break above 5% and 30-year fixed mortgage rates around 7.5%, while the Fed cannot control the long end of the yield curve.
  • He views both gold and silver as long-term trades, with about 15% of his own portfolio in them, and sees silver as the more attractive commercial play given industrial scarcity.
  • He argues euro-denominated credit default swaps on U.S. debt lead gold by several months and proposes them as a benchmark for institutional allocators who struggle to model gold's lack of yield.