Fed Up Friday: July 16-22
As the saying goes: “Keep your friends close, and your enemies closer.” Here’s a quick look what the Fed’s been up to this week.
Philly Fed Shows Drop in Manufacturing
This week the Federal Reserve Bank of Philadelphia released the results of its Manufacturing Business Outlook Survey. The Survey of regional manufacturers showed general activity falling from 4.7 to -2.9 for July. According to Market Watch, this is the “ninth month of declining activity of the past 11 months and the slowest pace in six months” for the region. These numbers represent what Peter’s said about the economy in the past: “The Actual picture [the Fed paints] is an economic recovery that is over, if it ever happened.”
Fed Officials Tell WSJ Rate Hike Likely this Year
Some centrist Fed officials told the Wall Street Journal a rate hike is likely this year if the economic outlook continues to look positive. Timelines were thrown out, with a possible hike as soon as the September meeting. But that’s eight weeks away, and there are two job reports and other economic data to consider. A slim majority of surveyed economists are betting on a December hike instead.
Steve Forbes Criticizes Fed’s Manipulation of Interest Rates
In an interview at Freedom Fest 2016, media mogul Steve Forbes explained how the Fed is price controlling the credit markets. “Manipulating or controlling interest rates is a form of price controls. We know price controls deform markets. Interest is the price borrowers pay to lenders. It’s the price of borrowing money. Like rent control, [it’s] the price you pay for borrowing the apartment. By manipulating the interest rates, the Fed has deformed the credit markets where money goes to bonds, not to small and new businesses.”
Rand Paul’s “Audit the Fed” Bill Only Short Seven Votes
Senator Rand Paul has revived the attempt to audit the Fed’s books. Last January, Paul’s stand-alone vote in the Senate failed due to party line voting. This time around the Kentucky senator is hopeful he’ll be able to make up the 7 votes he’s short. Passage would mean the Government Accountability Office (GAO) would have unprecedented access to the Fed’s policy and financial transactions history.
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