Tag Archive: federal reserve

Does the Fed Have Any Credibility Left?

The Federal Reserve has demonstrated that it is incapable of weaning the stock market off Fed-stimulus. This begs the question of whether the central bank has any credibility left as an inflation fighter and independent institution. The central bank began “treating” the market years ago. The Federal Reserve began with an initial round of QE, and when that didn’t work, it proceeded to provide additional injections in the form of QE2 and later QE3. Even that wasn’t enough, and the Fed was also forced to... Continue Reading

Will The Fed Provide More Clarity?

The Federal Reserve is set to complete its latest policy meeting on Wednesday afternoon. Although no action is expected from the central bank at this meeting, the markets are expecting the bank to reiterate its previous stance. The next action from the Fed is very likely to occur in September, with another possible hike later in the year. Some have recently, however, called into question the need for another two hikes this year. Recent data suggest that the U.S. economy is humming along nicely, and... Continue Reading

Keep Buying

Gold has been on the defensive in recent trade, and prices are approaching the $1200 per ounce level. Recent hawkish commentary from the Federal Reserve, as well as from the central banks of Canada, Europe and even Japan have kept animal spirits going as investors anticipate the end of the easy money era. Although some investors may consider this to be cause for celebration, it is also important to consider just how long it has taken to get to this point. After all, the U.S.... Continue Reading

If Not Now Then Later

As investors look to get back into the swing of things following the Labor Day Holiday and many last minute vacations, their focus remains the same as it has for several weeks, if not months. When will the Fed raise rates again? That is the question that many market participants are still asking. As we wrote previously, last week’s jobs data was essentially a dud, and recent manufacturing data was also not so great. The services sector also showed a surprising and significant slowdown, further... Continue Reading

GDP Outlook Slashed

Investors have been cautious this week ahead of Wednesday’s latest FOMC meeting announcement. With no major surprises, the central bank elected to hold rates steady-at least for now-and eluded to the possibility of another rate hike in September. Kind of like kicking the can down the road… The Fed discussed improving conditions in the labor market and stated “Near-term risks to the economic outlook have diminished.” In other words, markets have recovered from the post Brexit freak out-for now anyway. The Fed has left the... Continue Reading

A Black Hole of Debt

In the German language, the word for debt – ‘schuld’ – means the same thing as guilt. Someone who has a tremendous amount of guilt would seek forgiveness. So the term many economists are now using – forgiveness – in regards the world’s growing debt problem would seem appropriate. But this term does not encapsulate the crises that would result if a large portion of debt was erased by policy makers. Until recently, the term ‘debt forgiveness’ in regards to government and corporate debt was... Continue Reading

What's Next From Central Banks?

Although the Federal Reserve has recently abandoned its policy of zero interest rates and has put an end to (at least for now) its quantitative easing program, the era of QE and ultralow interest rates around the globe may be far from over. This past week, the Fed announced it would hold interest rates at current levels although a hike or two still remains on the table for June and possibly December. In a surprising move, the Bank of Japan elected this week to do... Continue Reading

WHY IS THE FED RELUCTANT TO RAISE RATES?

The Fed appears to have a problem on its hands, and markets are watching. The gold market, like many other asset classes, has been paying close attention to the ebb and flow of hawkish and dovish rhetoric from the central bank. Investors seem to be taking a “wait and see” attitude at this point, neither willing to truly commit but also not willing to stand idly by. Stocks have been going up for years now, while interest rates have remained artificially low. The gold market... Continue Reading

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Former Fed Chairman Alan Greenspan on Gold

Where will gold be in five years? “HIGHER.” How much Higher? “MEASURABLY!” Former Fed Chairman Alan Greenspan spoke Wednesday to the Council on Foreign Relations. He said QE ultimately fell short of its goals referring to the end of the bond-buying program, which aimed to lower unemployment and spur stronger economic growth. Mr. Greenspan’s comments to the Council came as Fed officials were meeting in Washington, D.C., and expected to announce within hours the end of bond purchases. Mr. Greenspan said the bond-buying program was... Continue Reading

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