All eyes will focus on the Federal Reserve as it wraps up its June meeting. But it’s important to remember the Fed isn’t the only game in town. Moves by the European Central Bank also have a significant impact on the global economy (and the gold market) and it has taken a decidedly dovish turn.
Most analysts expect the Fed to hold interest rates steady in June, but potentially set the stage for a July rate cut. (Although Jim Grant said he thinks the Fed will actually cut this month.)
Back in December, Peter Schiff said the Federal Reserve’s was about to do the last rate hike of the cycle. He went further and said the “Powell Pause” wouldn’t be enough and the next step would be rate cuts and another round of quantitative easing. Fast forward to today and nearly everybody expects that the Fed will cut rates at least once this year.
Jim Grant appeared on CNBC Markets Now on June 17 and shocked the panel when he said he thinks the Fed will actually cut rates during this week’s meeting. Most analysts expect the central bank to hold pat during this meeting and then possibly cut in July.
Whether or not he’s right about the timing, Grant offers a good explanation as to why the Fed will cut and the likely results. He says the central bank is pursuing a dual mandate of arsonist and fireman.
During a recent interview, President Donald Trump lamented the fact that we don’t have a bigger bubble and blamed Federal Reserve Chair Jerome Powell. Trump said that even though Powell was his pick, he “disagrees with him entirely.” He said that if it weren’t for the Fed, we’d have even stronger GDP growth.
Frankly, if we had a different person in the Federal Reserve that wouldn’t have raised interest rates so much, we would have been at least a point and a half higher. I’m not happy with what he’s done.”
As Peter Schiff pointed out in his podcast, this is the exact opposite of Trump’s position when he was campaigning. Now that he’s in the White House, Trump has turned into a Keynesian on steroids.
Last week was a good one for the stock market. Peter Schiff raised an important question in his latest podcast: why?
Answer: it’s all about the Fed.
Everybody is giddy because they think the central bank is going to save the day once again. In this podcast, Peter explains why they are wrong.
In December, Peter Schiff predicted that the Federal Reserve was about to hike rates for the last time and that the next step would be rate cuts. Yesterday, Jerome Powell made comments widely interpreted to signal the rising likelihood of a rate cut. The Fed chair dropped the word “patient” from his vocabulary, saying the central bank would respond as “as appropriate” to the perceived economic impacts of tariffs and other economic data.
Peter appeared on Fox Business Countdown to the Closing Bell with Liz Claman to talk about what’s next up for the Fed and how it will impact the economy.
It looks like the Federal Reserve is about to get back into the bond business and help the US government deal with its massive debt.
The Treasury Department announced yesterday that it will not have to borrow as much money in the third quarter of fiscal 2019 as originally anticipated. But this is not because of a slowdown in government spending. According to a Treasury official cited by Reuters, the reason for the lower borrowing estimate is due to an anticipated increase in Fed Treasury holdings as the central bank ends its balance sheet reduction program.
Just a few weeks ago, the mainstream was worried about economic growth. Now, all of a sudden, the mainstream is bullish about economic growth. It seems like the high from the Fed’s monetary heroin has fully taken hold. And it’s not just in the US.
In this episode of the Friday Gold Wrap, host Mike Maharrey talks about how central bank monetary policy and government economic stimulus is impacting economies. It’s fun being high … until you’re dead. He also covers some interesting developments in the gold market.
Last November, Fed Chair Jerome Powell said interest rates were “just below the broad range of estimates of the level that would be neutral for the economy.” This was the excuse for the central bank’s monetary policy 180 and set the stage for the “Powell Pause.”
Central bankers are perpetually on a quest to find the elusive neutral interest rate, but in fact, it’s an impossible goal, as economist Frank Shostak explained in an article published on the Mises Wire.
Basically, the Fed is chasing unicorns.
How are all of these unprofitable companies staying afloat and even making big splashes with media-hyped IPOs?
Peter Schiff addressed this question, along with the supposed “failure” of capitalism in his most recent podcast.
The “Powell Pause” is not enough. President Donald Trump not only wants interest rates cuts; he wants to put quantitative easing back in play.
During an interview Friday, the president once again complained about the Fed’s 2018 interest rate increases, saying “they really slowed us down.” Trump wants stimulus and called on the Fed to resume Obama era QE.
