We now have QE to infinity and beyond.
On March 23, the Federal Reserve announced it will purchase an “unlimited” amount of US Treasuries and mortgage-backed securities. The Washington Post called the move “unprecedented” and said that it goes “much further than what the central bank did in the 2008-2009 crisis.”
The Federal Reserve cut rates to zero and expanded quantitative easing on Sunday. How did the markets reward this latest monetary stimulus?
In his podcast, Peter said he thinks we’ve passed the point of no return.
It appears we’ve pretty much reached complete panic mode.
The longest bull market in history came to an abrupt end on Wednesday. Wall Street followed up with another massive sell-off on Thursday. The S&P 500 had its worst day since Black Monday in 1987. Even gold was down. Meanwhile, the Fed tried to stem the tide, announcing a new round of quantitative easing. But the tide wasn’t stemmed. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey gives an overview of the week’s events and talks about the elephant in the room.
Peter Schiff recently appeared on SmallCap Power with Mark Bunting to talk about the stock market bubble. He said it’s the same type of bubble as 2008, only bigger.
The source is the same. It’s artificially low interest rates. It’s quantitative easing. The central bank, the Federal Reserve, is responsible for the rise in the stock market.”
Gold took a hit on Tuesday but held a key support level and rebounded as the week went on, even as stocks set new records. Why does gold continue to keep showing strength even with all the headwinds? Is it just coronavirus? Or is something else going on? Host Mike Maharrey talks about it in this week’s Friday Gold Wrap podcast.
The Federal Reserve held its first FOMC meeting of 2020. It was mostly met with yawns as the Fed held rates steady, and despite a somewhat dovish tone, indicated that it probably wouldn’t make any moves on interest rates this year. We’ve grown so used to low interest rates that it barely registers that the Fed is actually engaged in extreme monetary policy. Extreme has become the new normal. In this week’s Friday Gold Wrap podcast, host Mike Maharrey talks about it. He also touches on the Q4 GDP report and some interesting gold supply and demand trends.
The Federal Reserve held its first Federal Open Market Committee meeting this week. As expected, the central bank held interest rates steady but the overall posture of the Fed came off as rather dovish. Quantitative easing will continue into the near future and Fed Chairman Jerome Powell left the door open for future rate cuts.
The Federal Reserve funds rate will stay locked in at 1.5 to 1.75% and the vote was unanimous. Powell said, “We’re comfortable with our current policy stance and we think it’s appropriate.”
A week ago, nearly $100 billion in short-term liquidity was added via the Federal Reserve Bank of New York offering cash in the repo market.
As a reminder, the repo market is the overnight market of repurchase agreements. This is where one sells an asset with an agreement to purchase it back at a slightly higher price the next day. In other words, very short term collateralized lending.
Sometimes it’s a lot easier to sit down at the table than it is to fold your hand and leave.
Nearly four months after it started, the Federal Reserve continues to run overnight repo operations and it’s unclear when the central bank will actually end these “emergency” measures.
The Fed stepped into the repo markets last September to “unplug” the financial system’s “plumbing” with an injection of cash. It was the first such move since the financial crisis a decade ago. The move stabilized the markets, but months later, it doesn’t appear the Fed has a viable exit strategy.