Shares of the iShares Silver Trust dropped 3.0% to $64.19 on Wednesday, extending a punishing week that has erased 8.8% from the ETF's value since April 22. The selloff landed as the FOMC split 8-4 to hold rates at 3.5%–3.75%, with four dissents — the most since October 1992 — underscoring deep internal disagreement about where policy goes next for a Fed that is also changing leaders.
• Rising Yields Make Silver a Tougher Sell
The 10-year Treasury yield climbed to around 4.35%, a one-month high, as Middle East tensions and rising oil prices rekindled fears of an inflationary spiral. Silver pays no interest or dividends, so when safe government bonds offer higher returns, investors shift money out of metals and into Treasuries. The Strait of Hormuz closure sent crude surging, which fed inflation expectations, pushed yields to the 4.3–4.4% range, and strengthened the dollar — all headwinds for silver.
• The Fed's "Wait and See" Stance Kills Hope for Cheaper Money
The decision marked the third consecutive meeting where the committee stood pat, as tariffs and soaring energy prices complicate policy with inflation well above the 2% target.
March CPI rose +0.9% month-over-month and +3.3% year-over-year, the highest since May 2024. For SLV holders, no rate cuts mean the "opportunity cost" of holding silver — what you give up by not earning interest elsewhere — stays high. Forecasts now largely discard the possibility of rate cuts this year.
• A Leadership Vacuum Adds Uncertainty
Markets are watching whether Powell will stay on as a governor; meanwhile, the Senate Banking Committee advanced Kevin Warsh's nomination, setting up the Fed's first leadership change since 2018.
In a CNBC survey, just 50% of respondents believe Warsh will conduct monetary policy mostly or very independently. A less independent Fed chair could mean more political pressure to cut rates — bullish for silver long-term — but the transition fog discourages big bets now.
• Silver's Supply Squeeze Hasn't Saved It — Yet
The Silver Institute projects a sixth consecutive annual market deficit in 2026 at approximately 67 million ounces.
China's silver imports hit an eight-year high, driven by data centers, EV production, and AI infrastructure. Despite tight supply, the rate-and-dollar headwinds are winning. SLV's 52-week range spans from $29.04 to $109.83 , meaning the ETF sits roughly 41% below its peak — deep enough to attract bargain hunters if the macro picture shifts, but dangerous if yields keep climbing.