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POSTED ON June 26, 2022  - POSTED IN Exploring Finance

After a big miss on the Powell/Brainard nominations in November, the price analysis has been fairly accurate. Identifying the initial breakout above $1800, mentioning that $1900 was fragile support, and last month concluding that gold had found a bottom around $1800.

For the past month, gold has been consolidating within a tight range around $1850. The data suggests the next move is most likely up. Lots of indicators have bottomed, which leaves little downside remaining. The market has also priced in an extremely aggressive Fed and held up very well over that time.

POSTED ON May 27, 2022  - POSTED IN Exploring Finance

Despite rising through the month, the Fed balance ended up shrinking slightly by $25 billion in May, even as it slightly increased its Treasury holdings.

This was the first monthly decline in the balance sheet since $220B of “Other” rolled off in July 2020. In that case, “Other” were repurchase agreements with foreign entities to provide liquidity and alleviate stress in the global markets.

POSTED ON April 1, 2022  - POSTED IN Exploring Finance

It appears quantitative easing has pretty much come to an end. At least for now.

Although the Fed was still expanding the balance sheet through mid-month, it only added a net $9B to the balance sheet during March. This was accomplished with moderate purchases of short- and long-term debt, while 5–10-year notes had a $20B runoff. MBS (light green) was surprisingly quiet with a net $2B runoff, but this disguises the typical volatility seen in MBS weekly purchases.

POSTED ON March 10, 2022  - POSTED IN Exploring Finance

The latest seasonally adjusted inflation rate for January was 0.8% month over month. The non-seasonally adjusted annual rate came in at 7.87%. Both of these numbers were slightly above expectations.

Unlike last year, where one component made up the bulk of the move, the past several months have shown increases more evenly spread across the CPI. This shows that inflation continues to become more widespread. And there is no sign it is slowing down.

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