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Posts Tagged ‘Federal Open Market Committee’

Gold Prices Decline as Fed Bluffs on Right Direction of the U.S. Economy

Minutes of the Fed’s April meeting released last week showed Fed officials believed the U.S. economy could be ready for another interest rate increase in June. Will the Fed actually follow through? Sometimes, the speculation alone accomplishes the purposes that Fed has in mind. For instance, the gold price against the dollar immediately suffered from rate-hike speculation.

Gold Price Correlation With Federal Funds Rates Since 1971

Everyone assumes higher interest rates will devastate zero-yielding gold, leaving it far less attractive. This premise led investors to avoid gold like the plague, and speculators to short sell it at wild record extremes. But provocatively, history proves gold price thrives in Fed-rate-hike cycles. Higher rates are actually bullish for gold.

Federal Reserve Fairytales: 15 Reasons Fed Policies Belong in Fantasyland

If you add all this up – all the forward guidance, all the dates, all the targets, the currency wars, operation twist, all the flavors of QE, 15 separate fed policies in 5 years, that tells you, you don’t know what you’re doing. You’re making it up as you go along. So people should have no confidence in the Fed. That’s for starters.

Gold Prices Higher On Slowing Global Economy and Geopolitical Tensions

Gold prices jumped last week when World Bank released its report regarding the global economy, slashing its global GDP forecast on weaker outlooks in the US & elsewhere. Gold prices have now hit their highest in nearly three weeks as escalating turmoil in Iraq and Ukraine resulted in fresh safe-haven buying.

There is No Tradeoff Between Inflation and Unemployment

Increasing money supply spurs economic growth & that will cause inflation. But if monetary expansion slows, economic growth may stall & unemployment will rise. The Fed will never be able to trade higher price inflation for lower unemployment. Nor can it sacrifice higher unemployment for lower price inflation.

What they say on Wall Street - Don’t Fight the Fed

Simply Google what they say on Wall Street – “Don’t fight the Fed,” and you’ll get 468 million results. Does the Fed Really Create the Boom-Bust Cycle? When the Fed is printing, get your money in stocks. When they take away the punchbowl, turn out the lights and sell your stocks—the party’s over.

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.

Why the Fed Won’t Start Taper in the December FOMC Meeting

Factors mentioned here suggest another non-taper in December. If we’re right, the spotlight on January’s FOMC meeting – which already features Ben Bernanke’s exit, Janet Yellen’s new role and a new set of voters – will be even brighter.

US Federal Reserve

Federal Reserve Chairman Bernanke Says Unemployment a “Grave Concern”: Federal Reserve Chairman Ben Bernanke said he would not rule out further bond purchases […]

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