Commodity Trade Mantra

Posts Tagged ‘Fed Policy’

A Stock Market Correction Has Only Been Postponed, Not Avoided

Markets are relieved that the Fed won’t hike rates in March. But, the markets are never satisfied. Getting stock market expectations aligned with the intended FOMC policy path will not be pretty. Expect higher volatility and stock market drawdowns in April and May as markets reprice. A further stock market correction has been postponed, but not avoided.

Steve Forbes on the Presidential Race, Fed Recklessness and Gold

In terms of gold, unless you’re a jeweler, I see it as an insurance policy. It doesn’t build new factories or things like that. What it is, is insurance that if things really go wrong you’ve got something that will balance your portfolio. Not that you’re going to make quick money on it, but it’s like an insurance policy. You hope it doesn’t have to be used, but if it does you’ve got it.

Will Yellen Shock All: Goldman Says "Fed Should Think About Easing"

The punchline comes from Goldman’s Financial Conditions Index which is now screaming for QE4 or NIRP. After predicting of a roaring economy,Goldman admits the Fed can’t hike even 25 bps. Pay attention to what Goldman says the Fed will do, for “risk management” purposes – because as shown many times in the past, Goldman runs the Fed.

Did The Fed Intentionally Spark A Commodity Sell-off?

A theory: The Fed realized that QE wasn’t working, and never worked, thus another path was needed. But what alternative did they have, since rates were already ZERO? So maybe they changed course and took a strong dollar policy vs. a weak one to intentionally weaken the commodity sector and thus boost consumer spending.

Why QE4 Is Inevitable - What could turn Sentiment more Positive?

According to Deutsche, and soon according to virtually all sellside strategists who are slowly but surely grasping the significance of what we have been warning for month on end, QE4 is inevitable. The only problem is that when the Fed pivots from “imminent rate hike” to QE4, it will loose the last shred of credibility it had left. The Fed is now completely trapped.

Interest Rates and the Future of Gold

In my view, the U.S. economy remains anemic, additionally suffering from a strong dollar & proponents of the rosy scenario are likely to be disappointed. A reassessment of economic prospects & reassessment of Fed policy in the months ahead could be just the turn of events that will support a springtime recovery in the price of gold.

Same Currency War, New Battle Phase

What is a currency war? They happen when there’s not enough growth in the world to go around for all the debt obligations. In other words, when growth is too low relative to debt burdens. They do this basically by cutting interest rates or intervening in markets. It is as an effort to cheapen the currency, get inflation & to display growth.

Four Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End

The remarkable run up of asset prices in the last few years is beginning to run out of steam. Once interest rates begin to rise — and rise they must, whether as a result of Fed policy or not — the end of the asset price inflation will be at hand. The result will be another financial crisis and accompanying recession.

6 Major Flaws in the Fed’s Economic Model

Janet Yellen’s greatest deficiency is that she does not use practical rules. Instead she uses esoteric economic models that do not correspond to reality. This approach is highlighted in two Yellen speeches. In June 2012 she described her “optimal control” model and in April 2013 she described her model of “communications policy.”

How The Fed Is Driving The Next Bust

As should be evident after 6 years of frantic money pumping that old secret sauce doesn’t work any more because the American economy has reached a condition of peak debt. The Fed yet plans to keep money market rates at zero for 7 years running through 2015 on many misbegotten notions.

Yellen knocks Gold. Will Putin drive it back up again?

In her first post FOMC meeting statement Janet Yellen, succeeded in creating uncertainty in both the general equities market and in precious metals prices. Gold and silver prices took a sharp dip downwards but the Russia/Ukraine situation remains tense and could yet drive precious metals up again.

Goldman's 5 Key Questions For Janet Yellen

Fed Chair Janet Yellen is likely to stick to the script in her inaugural monetary policy testimony but Goldman looks for additional color on: 1) Recent patch of softer data 2) Fed’s thinking on EM weakness 3) Hurdle for stopping taper 4) Amount of slack in labor market 5) Future of forward guidance

Paul Singer

If the economy does not light up, the impact of another year of full-bore QE is impossible to predict. Five years and $4 trillion have created economic and moral distortions but very little sustainable value. Maybe the sixth year will produce the “riot point.” Nobody knows, including the Fed.

A Fed Policy Change That Will Increase the Gold Price

With all of the good news, the Fed may indeed be thinking they can pull out the 25bp lifeline and the banks will be just fine – When the Fed announces it won’t pay any more interest on excess reserves, and banks start lending in earnest again, the price of gold will be very interesting to watch.

The Fed Needs To Stop Playing Taper Ping Pong

Since April, the Fed had scared markets by suggesting that tapering might begin by Sept, but in Sept it acknowledged that the tapering scare had tightened financial conditions and so hinted that they might not taper until winter 2014 – In reality the Fed’s position was virtually unchanged.

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