Tag Archives: fed balance sheet

The price of gold dropped $29 and the price of silver dropped $0.27. We’ll get back to where we think the prices are likely to go in a bit. In recent Reports, we’ve looked at the elevated bid-ask spread in gold (though not nearly as elevated as some goldbugs would have you believe) and the elevated gold basis. As an aside, we continue to see articles that get the high gold basis exactly backwards, the way John Maynard Keynes got commodity markets backwards. A high...

The Fed enters the 'acceptance stage' regarding its debt and market dominance monetary regime.The US Federal Reserve (Fed) is further reinforcing its stance on ceasing its balance sheet shrinkage before year end, essentially yielding to the demands of markets, which have been anxious about the potential for market liquidity shrinkage. Officially, the balance sheet question is still rooted primarily in the technical – commercial banks’ high demand for safe, liquid assets – rather than...

Fed signals end of rate hikes and that bank reserve liquidity tightening is near.Dovishness was on full display at the Fed meeting on 30 January. The Fed removed its rate tightening bias, and emphasised its “patience” until the next rate move.Chairman Powell seemed particularly anxious about the global growth backdrop and explained the more dovish stance is just “common sense risk management”.Another key focus was the balance sheet reduction as Powell hinted that a decision about ceasing the...

Hints that Fed balance-sheet reduction could in question.Fed Chairman Jerome Powell made dovish remarks at a conference on Friday to the effect that the Fed would be ‘patient’ about further rate increases after having delivered four rate hikes in 2018.Crucially, Powell mentioned possible tweaks to the Fed’s preset plans for balance sheet shrinkage to calm financial markets concerns, after downplaying the balance sheet aspects at the December post-policy meeting press conference.This...

The incoming economic data hasn’t changed its tone all that much in the last several years. The US economy is growing but more slowly than it once did and we hope it does again. It is frustrating for economic bulls and bears, never fully satisfying either. Probably more important is the frustration of the average American, a dissatisfaction with the status quo that permeates the national debate. The housing bubble...