Tag Archive: monetary policy

A Divided Fed

The Federal Reserve elected to cut interest rates again by 25-basis points at the conclusion of its meeting this week. The committee voted in favor of the cut by a margin of 7-3. The split may have been more than markets anticipated, and the Fed’s commentary was deemed to be not so easy when it comes to monetary policy. 7 of 17 FOMC members expect just one more rate cut this year. The not so dovish meeting sent stocks lower initially before they recovered. The... Continue Reading

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Building a New Base

The gold market has seen a bit of a pullback from recent 6-year highs. The metal dipped under the $1500 level yesterday before bargain hunters stepped in today to propel the market back above this key level. Recent price action suggests that the market may be in the process of building a new base which could potentially act as a new, major level of price support.  A series of higher lows also lends credibility to the notion that a firm uptrend is in place. Recent... Continue Reading

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The Fed’s Towel-Throw Could Spell Trouble for Stocks

At its most recent meeting on monetary policy, the Fed outdid many of even the most dovish expectations. The central bank essentially came out and said – without actually saying it – that trouble for stocks is ahead, and the next recession is approaching. All the Fed’s previous talk about further rate hikes in 2019 and the balance sheet run-off continuing on autopilot were completely wrong. Although the central bank could potentially hike once more in 2020, such a move could be more of a... Continue Reading

Is the Fed Starting to Backtrack?

Rising interest rates have been the topic of considerable debate in recent months. The Fed has been sticking to its plan of gradual rate hikes while the benchmark 10-year note yield is solidly above the 3% level. Higher rates have not gone unnoticed, with everyone from President Donald Trump to Mad Money host Jim Cramer weighing in. Stock investors have also made their opinion clear, with recent declines and increasing volatility being largely blamed on higher rates. So far, the Fed has stuck to its... Continue Reading

A Prime Example

Last week brought with it numerous geopolitical issues and the highly anticipated central bank symposium in Jackson, Hole, Wyoming that is sponsored by the Kansas City Federal Reserve and takes place each year. Central banks have been a key area of focus for investors in recent months, as many are now in the process of attempting to normalize monetary policies and reign in swollen balance sheets. The Fed’s role is so critical, in fact, that even U.S. President Donald Trump has voiced his concerns over... Continue Reading

Not So Fast

The U.S. Dollar has been on a tear in recent months, and is currently trading around a 12 month high. The strength seen in the currency in recent months has almost certainly been a major factor in gold’s recent lack of upside, and further gains in the greenback could keep the pressure on. The significant impact the dollar has had on the gold market is not likely to continue indefinitely, however, and once this trade reverses course the outlook for the metal could be extremely... Continue Reading

It Will Only Get Worse

The recent spike in market volatility seen this past week based on unfolding events in Italy should only serve to underscore the importance of being hedged against increasing volatility and rising yields. Although markets are seeing a sense of calm return the last couple of days, the EU-and global markets-remain vulnerable to geopolitical developments that threaten the status quo. It is also important for investors to understand a critical point: That without global central banks still pumping money into the financial system, things could have... Continue Reading

Now is Time to Get Ahead of the Curve 

The commodity bull market has seemingly begun. Oil prices are now trading at multi-year highs, with Nymex crude trading over $72 per barrel and Brent crude trading around the $80 level. Crude has been on the offensive even as the dollar index has also moved up to multi-month highs. The strength being seen in oil is likely due to several factors, however, recent economic strength and the potential for lower supplies are two of the main drivers. Some analysts have already begun to suggest that... Continue Reading

There’s Few Good Options

Alternative asset classes are more important than ever, and investors have never had so many vehicles with which to diversify their portfolios. This would seem to be especially important in the current environment, where neither stocks nor bonds may offer investors a good value. The stock market has been on the rise for the last decade. Although it is impossible to say exactly when the bull market may finally come to an end, history would seemingly indicate that the current bull could run out of... Continue Reading

Are Markets Headed Back to Earth?

The recent volatility seen in global stock markets has largely dominated headlines in the financial media recently, and many investors are likely wondering why the sudden sharp increase in price swings. Regardless of what the reason may be-whether it is overaggressive betting against volatility, the idea of rising rates, accelerating inflationary pressures or the current state of geopolitics-there may be a simpler, albeit unpopular answer: Stocks and risk assets are seeing a return to valuations more in line with historical norms. That’s right: Stocks have... Continue Reading