Tag Archives: Federal Reserve

Those watching the gold price and price of silver will have noticed the sharp uptick following the Federal Reserve’s announcement, yesterday. This was despite the Fed doing exactly what everyone expected them to do. For now, the Federal Reserve is sticking to its relatively well-telegraphed plan but how long will it be until they need to move the goalposts in order to do so? . Gold and Silver prices rose sharply on the Fed’s statement on Wednesday. The change of...

Overview: With the market nearly ruling out a 50 bp hike by the Federal Reserve on February 1, the interest rate adjustment appears to have largely run its course. This may be helping to ease the selling pressure on the greenback. The general tone today is one of consolidation. There is a modest risk-off bias today. Although Japanese stocks advanced, China, Hong Kong, and South Korean equities slipped lower. Europe’s Stoxx 600 is snapping a four-day advance, and US...

Overview: The continued easing of US price pressures has strengthened the market's conviction that the Federal Reserve will further slow the pace of rate hikes and that the terminal rate will be near 5.0%. The decline in US rates has removed a key support for the US dollar, which has fallen against all the G10 currencies this week. The Dollar Index has now retraced half of what it gained since bottoming on January 6, 2021. Meanwhile, there are positive developments...

Anyone who has decided to buy gold, or follows the gold price will be aware of how powerful the US Federal Reserve is. This year the Federal Reserve will turn 110 years old, only in recent years is dollar hegemony appearing to falter. Below we look at the central bank’s origins and three lessons we can learn from the history of the world’s most powerful bank, in order to help our investment decisions in 2023.  Is the FED’s institutional history about to repeat...

Overview: After sharp losses yesterday, the US dollar has stabilized today arguably ahead of Fed Chair Powell’s speech at the Riksbank symposium. Yesterday’s Fed speakers stuck to the hawkish rhetoric, and this seemed to help reverse the equity market gains, though the greenback remained soft. If Powell does not push back against the easing of financial conditions, it could very well fan risk-taking appetites and lead to a further easing of financial conditions. Asia...

Overview: Don't fight the Fed went the manta as the market took the US two-year yield back up to 4.50% in the aftermath of the FOMC minutes last week, the highest in over a month. The minutes warned of a premature easing of financial conditions. And then bam, softer than expected hourly earnings and a weak service PMI and bonds and stocks rallied, and the dollar was sold. This is a key part of the backdrop for this week, for which several Fed officials will speak,...

What’s your outlook for this year? I’ve heard that question repeatedly over the last month and if you’re reading this hoping I’ll let you have a peak at my crystal ball, you’re going to be disappointed. Because I don’t have a crystal ball and neither, I hasten to add, does anyone else in this business. So, no, I don’t know what’s going to happen this year. I do know what the consensus view is, what the majority expects to happen, and that may be more useful. Because...

The most important economic report in the week ahead is the US December Consumer Price Index on January 12. To be sure, the Federal Reserve targets an alternative measure, the deflator of personal consumption expenditures. However, in this cycle, when households, businesses, investors, and policymakers are particularly sensitive to inflation, CPI, which is reported a couple of weeks before the PCE deflator, has stolen the thunder. In explaining the surprise...

Overview:  Yesterday's greenback gains have been mostly reversed today. New efforts by China in its property market and anticipation of more stimulus helped rekindle the animal spirits today. Asia and Europe shrugged off yesterday's losses on Wall Street and the rally in bonds continued. The 8-12 bp decline in European benchmark 10-year yields comes even though the final composite PMI was better than expected fanning hopes of a short and shallow economic downturn....

Interview with Jeff Deist, President Mises Institute, Auburn, USA Division, friction and polarization have been on the rise in the West for at least a decade, but the escalation we saw during the “covid years” was especially worrying. Over the last year, this “worry” has become a truly pressing concern, even a real emergency one might argue, as inflationary pressures and an actual war were added to the mix of political and social tensions. Going into 2023, there are...