A 75 basis-point rate hike wasn’t even on the table a month ago. It appears that the central bankers over at the Fed were crawling around under the table because they found a 75-basis point rate hike.
The Fed went big at the June FOMC meeting in response to hotter-than-expected May CPI data just a week earlier. Jerome Powell admitted that Fed members were “surprised” but another big spike in prices.
So, what’s the plan here? Well, by all indications, there isn’t one.
Outflows of gold from Comex vaults have accelerated. Meanwhile, there is some shuffling of inventories of silver.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
The Federal Reserve just gave us the biggest interest rate hike since 1994. A month ago, we were told a 75 basis-point hike wasn’t on the table. It almost seems like the central bankers are winging it. Or as Friday Gold Wrap podcast host Mike Maharrey puts it, it’s like they’re playing darts while wearing blindfolds. In this episode, Mike breaks down the rhetoric coming out of this Fed meeting and speculates on what might be next.
Retail sales unexpectedly dropped in May, casting doubt on Federal Reserve Chairman Jerome Powell’s “the American consumer is healthy” narrative.
The Federal Reserve took a more aggressive swing at red-hot inflation at its June FOMC meeting, raising interest rates by 3/4%. It was the biggest hike since 1994. The question is will this be the last swing at inflation?
The Federal Reserve doesn’t have a very good track record. It was wrong about transitory inflation. It was wrong about peak inflation. And it’s almost certainly wrong in thinking the economy is strong enough to withstand tighter monetary policy to fight inflation.
But President Joe Biden trusts the Fed. The cornerstone of his inflation-fighting plan is to recognize the central bank “has the primary responsibility to control inflation.” He took a shot at President Trump for “demeaning” the Fed. On the other hand, Biden said he will respect the Fed and its independence.
Producer prices continue to rise at a near-record pace, further undercutting the notion that we’ve reached “peak inflation.”
There is a meme floating around social media that seems to prove greedy corporations – specifically oil companies – are the root cause of inflation.
How does this meme stack up to reality?
Short answer — it doesn’t.
Consumer sentiment plunged to record lows in June. The plummeting consumer sentiment numbers surprised mainstream analysts but they shouldn’t have given Americans are taking a pay cut month after month thanks to red-hot inflation.
After running a budget surplus in April thanks to an influx of tax-day tax receipts, the federal government reverted back to running a deficit in May.
The budget deficit was $66.22 billion last month, according to the monthly Treasury statement. That raises the current fiscal year deficit to $426.2 billion with four months left to go.
