Markets are basically in “hurry up and wait” mode as they anticipate the Federal Reserve FOMC meeting next week. Will the central bank cut rates as anticipated? Or will Powell and company surprise everybody?
In the meantime, there was some interesting economic and market news to digest this week. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the European Central bank meeting and the continuing surge in silver prices. He also looks ahead toward the next week’s Fed meeting.
It looks they’ve run out of patience at the Eccles Building.
The Federal Reserve Open Market Committee wrapped up its June meeting yesterday leaving interest rates unchanged. But the talk coming from the central bankers was decidedly dovish. Patience was not in the Fed’s vocabulary. Instead, Powell and company talked about “uncertainty” and said they would “act as appropriate to sustain the expansion.”
As Peter Schiff said in his podcast, the table is now set for a rate cut in July.
The Federal Reserve Open Market Committee meeting wrapped up yesterday with Fed policy still in neutral.
As expected, the FOMC left interest rates unchanged and seemed to indicate it doesn’t plan to do anything at all in the near-term. Jerome Powell’s comments dampened expectations that the central bank might move to cut rates in the coming months.
The committee is comfortable with current policy stance. Don’t see a strong case for a rate move either way.”
Most took Powell’s comments to be less dovish than expected, but Peter Schiff said he thinks the Fed is a lot more dovish than it admits.
The Federal Open Market Committee released the minutes from its May meeting yesterday. Most analysts characterized the Fed minutes as more “dovish” than expected. The FOMC hinted that it will continue its gradual pace of raising interest rates, with a June increase likely. But it did not give any indication that it might push rates up faster. The minutes also reiterate that the Fed may allow inflation to creep above the much ballyhooed 2% target.
Peter Schiff talked about the FOMC minutes in his latest podcast. He said they were pretty much what he expected, but he thinks the Fed is actually more dovish than the minutes indicate.
The Federal Reserve opens its March Open Market Committee meeting today. Most analysts say there is a 100% chance for a rate hike during this go-round. Overall, there is a decidedly hawkish attitude when it comes to the Fed. The real debate right now revolves around whether the central bank will hike three or four times in 2018.
But Peter Schiff said in his most recent podcast he isn’t certain about all of these rate hikes.
The fact is I’m still not 100% sure the Fed is going to hike on Wednesday. Now, I would argue or agree that it’s more likely than not that the Fed is going to hike because they’ve been hiking interest rates all along. The Fed, so far, has not given any indication that they’re not going to hike because they don’t want to give up the ghost of this vibrant recovery where they need to raise rates because everything is going so well. But that whole narrative, that whole illusion, seems to be fading very quickly.”
So, could we see a more dovish Fed before the week is out?
The December Federal Open Market Committee meeting went pretty much according to scrip.
Analysts widely expected the Fed to raise rates by .25. It did. Analysts also expected the Fed to signal three more hikes in 2018. It did that too.