• Tag Archives Janet Yellen
  • Gold Price Jumps in Dollars as ‘Low-Rate Yellen’ Gets Trump’s Backing

    Gold price gains continued for Dollar investors on Thursday but held flat for other traders as the US currency touched its lowest Euro value since January 2015 following yesterday’s “no change” decision from the Federal Reserve.
    “The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data,” said the Fed’s July statement, seemingly delaying a move to start reducingits $4.6 trillion holdings of QE-bought Treasury and mortgage-backed bonds.
    Asian stock markets rose – as did most commodities and major government bond prices – but European equities then slipped as the Dollar bounced from its new 30-month lows versus the 19-nation single currency.
    Gold priced in Dollars today set its highest London benchmarking since 14 June at $1262 per ounce.
    But priced in Euros, gold fixed at only a 3-session high. The UK gold price in Pounds per ounce reached only a 2-session high.
    Thursday morning’s Dollar price stood 2.0% above the 2017 average to date.

    This post was published at FinancialSense on 07/27/2017.


  • Is The Fed Poised To Ignite A Violent Dollar Rally?

    As ther world waits with bated breath for Janet Yellen’s statement this afternoon – whiche is uniformly expected to be a nothing-burger, some are wondering if the recent flip-floppery by Yellen, Draghi (and even Kuroda with his ‘actual’ tapering while lowering inflation expectations) does not leave today open to another modst shift back in The Fed’s ‘hawkishness’. As Bloomberg’s macro strategist warns, this sets the market up for a surprise and as he warns: “Dollar risks are starting to seem skewed all one way: toward an immediate rally.”
    There’s extremely bearish positioning, that’s failed to adapt to changing circumstances, into event risk that’s structured to surprise in the opposite direction. That’s an explosive mix.
    When something seems so obvious, your immediate instinct should be to ask, “what’s the catch?” My problem is that this time, I just can’t see one.

    This post was published at Zero Hedge on Jul 26, 2017.


  • Markets On Hold Ahead Of FOMC Meeting Conclusion This P.M.

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer in subdued trading overnight, as the marketplace awaits today’s FOMC meeting conclusion. U. S. stock indexes are slightly higher just ahead of the New York day session.
    Gold prices are moderately lower today on more profit-taking from the shorter-term futures traders, after recent price gains.
    Traders and investors are awaiting the conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) that began Tuesday morning and ends early this afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the U. K.’s second-quarter GDP came in at up 0.3% on the quarter and up 1.7%, year-on-year. Those numbers were right in line with market expectations.

    This post was published at Wall Street Examiner on July 26, 2017.


  • World Stock Markets Mixed, Quiet; FOMC Meeting In Spotlight

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    Global equity markets were steady to narrowly mixed in quieter overnight dealings. U. S. stock indexes are pointed toward firmer openings when the New York day session begins. The U. S. indexes are at or near record highs with no early chart clues to suggest they are topping out.
    Gold prices are moderately lower in pre-U. S. session trading, on some normal profit taking from recent gains that saw prices hit a four-week high on Monday.
    Focus of the world marketplace is on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the closely watched German Ifo business sentiment index rose to a record 116.0 in July, from 115.2 in June. A July reading of 114.9 was forecast.

    This post was published at Wall Street Examiner on July 25, 2017.


  • New Age Mandate — Doug Noland

    There is no doubt that central bank liquidity backstops have promoted speculation, securities leveraging and derivatives market excess/distortions. I also believe they have been instrumental in bolstering passive/index investing at the expense of active managers. Who needs a manager when being attentive to risk only hurts relative performance? And the greater the risk associated with these Bubbles – in leveraged speculation, derivatives and passive trend-following – the more central bankers are compelled to stick with ultra-loose policies and liquidity backstops.
    After all, who will be on the other side of the trade when all this unwinds? Who will buy when The Crowd moves to hedge/short bursting Bubbles? This is a huge problem. Central bankers have become trapped in policies that promote risk-taking and leveraging at this precarious late-stage of an historic Global Bubble. These days, central bankers cannot tolerate a ‘tightening of financial conditions,’ and they will have a difficult time convincing speculative markets otherwise.
    I’m reminded of the Rick Santelli central banker refrain, ‘What are you afraid of?’ Yellen and Draghi seemingly remain deeply concerned by latent market fragilities. How else can one explain their dovishness in the face of record securities prices and global economic resilience. A headline caught my attention Thursday: ‘Bonds: ECB Gives ‘Green Light’ to Summer Carry Trades, BofA says.’ It’s been another huge mistake to goose the markets this summer with major challenges unfolding this fall – waning central bank stimulus, Credit tightening in China and who knows what in Washington and with global geopolitics.

    This post was published at Credit Bubble Bulletin


  • Countries Are Ramping Up On Gold Purchases As The Dollar Takes A Dive – Episode 1340a

    The following video was published by X22Report on Jul 24, 2017
    Existing home sales slump, this is the weakest summer since 2011, this is not a good sign. Caterpillar sales increase because of the purchases from China and the Asian sector, this is fading already. Obama’s economy was one of the weakest economies we have seen since 1971. IMF forecast for US growth has been revised lower, it also revised global growth. Visa and other credit card issuers are pushing a cashless society to increase profits through transaction fees. Turkey and many other countries are purchasing a huge amount of gold. Janet Yellen confirms that the US dollar is collapsing.


  • Why the Gold Price Could Continue Beyond Today’s 4-Week High

    This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
    Over the last week, the gold price has bounced back above the $1,200 threshold. With the metal currently trading at $1,251, it’s set to post a weekly gain of 1.7%. The price of gold’s rally this week to its highest level since June 23 came mostly on the back of comments from Mario Draghi, president of the European Central Bank (ECB). Draghi said during the bank’s policy meeting on Thursday that the ECB had not yet formalized plans to roll back monetary policy stimulus.
    The Bank of Japan (BoJ) also said its inflation expectations were not meeting targets, with the current 1.1% inflation rate below the previous forecast of 1.4%. The BoJ noted that a dovish monetary policy would persist for some time.
    And that echoed what U. S. Federal Reserve Chair Janet Yellen said in her Congressional testimony last week, when she admitted the global inflation slowdown could call for an ‘adjustment’ to the Fed’s policy.

    This post was published at Wall Street Examiner by Peter Krauth ‘ July 21, 2017.


  • ‘A Stock Market Crash is Coming!’

    Conventional ‘Wisdom:’ Markets move up and down, but the stock market always comes back. The DOW is frothy and needs a correction, but the stock markets are healthy and big gains lie ahead.
    Pessimistic version: Jim Rogers said, ‘the next crash will ‘the biggest in my lifetime.” [Coming soon …]
    Question: Given the craziness in politics, the Middle-East, Central Banking, and global debt levels … do you own enough gold bullion?
    Conventional thinking: ‘Trump will save the markets, reduce taxes, and boost stock prices even higher.’ [Don’t plan on it.]
    ‘Gold pays no interest and has gone down for six years.’ [True but irrelevant.]
    ‘The Yellen Fed can’t let market bubbles pop so they will create more QE, more bond monetization, ‘printing,’ and Fed support. In short, the ‘Yellen Put’ is alive and will protect investors.’ [Maybe not…]
    ‘The market got hurt in 1987, 2000, and 2008. It rallied back each time and went higher. This time will be no different. Stocks may correct but they are a good long term investment.’ Read ‘The Bull Case: S&P is heading to 3,000.’ [How big a loss before the rally?]

    This post was published at GoldStockBull on July 20th, 2017.


  • Gradually… And Then Suddenly

    What do socialism and modern monetary policy have in common? Magical thinking. For both, it’s true on the giddy years up, and it’s true on the sad years down.
    If you’ve been reading my notes immediately before and after the June Fed meeting (‘Tell My Horse’ and ‘Post-Fed Follow-up’), you know that I think we now have a sea change in what the Fed is focused on and what their default course of action is going to be. Rather than looking for reasons to ease up on monetary policy and be more accommodative, the Fed and the ECB (and even the BOJ in their own weird way) are now looking for reasons to tighten up on monetary policy and be more restrictive. As Jamie Dimon said the other day, the tide that’s been coming in for eight years is now starting to go out. Caveat emptor.
    The question, then, isn’t whether the barge of monetary policy has turned around and embarked on a tightening course – it has – the question is how fast that barge is going to move AND whether or not the market pays more attention to the actual barge movements than what the barge captain says. I promise you that the barge captains of both the Fed and the ECB believe they can tighten and taper without killing the market so long as they jawbone this constantly. This is the Common Knowledge Game in action, this is the Missionary Effect, this is Communication Policy … this is everything that I’ve been writing about in Epsilon Theory over the past four years! And as we saw with the market’s euphoric reaction to Yellen’s prepared remarks for her Humphrey-Hawkins testimony last Wednesday, which were presented as oh-so dovish when they really weren’t, this jawboning strategy could absolutely work. It WILL absolutely work unless and until we get undeniably ‘hot’ inflation numbers – particularly wage inflation numbers – from the real world.
    So what’s up with that? How can we have wage inflation running at a fairly puny 2.5% (Chart 1 below) when the unemployment rate is a crazy low 4.3% (Chart 2 below) and other indicators, like the NFIB’s survey of ‘Small Business Job Openings Hard to Fill’ (Chart 3 below) are similarly screaming for higher wages?

    This post was published at Zero Hedge on Jul 19, 2017.


  • The Fed Has Hit the ‘Pause’ Button

    ‘Last week the Fed raised the white flag on further rate hikes. There won’t be any for the foreseeable future.
    No rate hikes are coming at the July, September or November Fed FOMC meetings. The earliest rate hike might be at the December 13, 2017 FOMC meeting, but even that has a less than 50% probability as of today. I’ll update those probabilities using my proprietary models in the weeks and months ahead.
    The white flag of surrender came in two public comments by two of the only four FOMC members whose opinions really count. The four voting members of the FOMC worth listening to are Janet Yellen, Stan Fischer, Bill Dudley and Lael Brainard.
    Yellen and Brainard made public remarks last week. Yellen’s testimony before Congress received the usual saturation coverage. Brainard’s remarks to an academic conference at Columbia University received far less coverage, but were perhaps far more important in terms of the impact of Fed policy on markets including gold.
    These comments by the two FOMC members should be put in the context of my model forecast for Fed behavior. I expect the Fed to raise rates 0.25% at FOMC meetings every March, June, September and December from now until mid-2019 until the Fed’s policy rate reaches a ‘normalized’ level of 3.25%.

    This post was published at Wall Street Examiner on July 18, 2017.


  • Hedge Funds Are Losing Faith in Precious Metals

    Gold is out of favor with money managers and it’s not the only precious metal facing investor exodus.
    Hedge funds and other large speculators are hitting the exit as they brace for monetary tightening in the U.S. and Western Europe. Money managers are not waiting around for signs that the Federal Reserve may change its rate trajectory, as they turn bearish on precious metals. These charts show the trend in sentiment.
    In the week ended July 11, the net-long position in gold fell to the lowest in 17 months, before the metal posted its first weekly gain in six weeks. The changes came just before government data showed consumer prices were little changed, fueling speculation the Fed may take longer to meet its goal, especially after Chair Janet Yellen said earlier in the week she sees uncertainty over inflation.
    Silver is also losing its luster in the eyes of hedge funds. The position in gold’s cheaper cousin swung to a net-short from a net-long and is the most bearish since August 2015. Investors concerned by the prospect of higher interest rates exited in droves — just as the metal capped its biggest weekly advance in six months on dovish U.S. economic data.
    Money managers pushed their net-short position in platinum — used to curb vehicle emissions — to a record before data showed European car sales slowed in June as Brexit-related concerns weighed on a peaking vehicle market.

    This post was published at bloomberg


  • Gold Prices Rise 3rd Day as US Debt Ceiling ‘Blocks Fed Rate Hikes’, Dollar Falls

    Gold prices rose sharply for the third session running in London on Tuesday, gaining as world stock markets fell, commodities rose, and interest rates on major government bonds retreated to new lows for July.
    Silver stalled at $16.14, unchanged from Monday’s jump, while platinum gave back $10 per ounce from yesterday’s spike to 1-month highs at $934.50 per ounce.
    Peaking above $1238, gold priced in US Dollars recovered almost the last of this month’s earlier 3% loss, driven by “technical follow-up buying” after breaking above the “important” 200-day moving average according to a commodities note from German bank Commerzbank.
    “The weak US Dollar is also playing its part – it has depreciated to a 14-month low against the Euro.”
    Looking at US interest rates, “[Last week’s] unexpectedly dovish tone from Fed Chair [Janet Yellen] and weaker than expected CPI [inflation] data raised questions on the Fed’s ability to stay its course,” says a note from Canadian brokerage T. D. Securities.

    This post was published at FinancialSense on 07/18/2017.


  • Ron Paul: You Can’t Run a World Like This (Video)

    Last month, Federal Reserve chair Janet Yellen made a bold prediction, saying an economic meltdown like the one we saw in 2008 will not likely happen again ‘in our lifetime,’ because banks are ‘very much stronger.’
    Ron Paul begs to differ.
    In fact, during an interview on World Alternative Media, the former congressman said Yellen’s comments should probably make us more than a little nervous because, ‘central bankers are always wrong on their predictions – especially before a bust.’
    What she says shouldn’t reassure anybody.


    This post was published at Schiffgold on JULY 18, 2017.


  • How to Profit When the $217 Trillion Global Debt Bubble Bursts

    While in London recently at an exchange with British Academy President Lord Nicholas Stern, Federal Reserve Chair Janet Yellen really let the cat out of the bag.
    She told Stern that banks are now ‘very much stronger,’ with another financial crisis like the one in 2008 unlikely to happen anytime soon, and not likely ‘in our lifetime.’
    According to Yellen, the Fed has ‘learned’ from the Great Recession of 2008 and is now more watchful over underlying risks in the financial system. She’s comfortable saying, ‘I think the system is much safer and much sounder.’
    Well, isn’t that reassuring…
    Really, it’s just more of the hubris that got us into the last financial crisis – the one that dragged the global economy to the edge of a precipice and vaporized trillions in wealth. I’m sure you remember it well, even if Yellen seems a little foggy on the details.
    On the one hand, central banks periodically warn us against overpriced assets, interest rates at or near extreme lows, and excessive borrowing.

    This post was published at Wall Street Examiner on July 18, 2017.


  • Yellen on Inflation — Doug Noland

    It’s fair to say that the whole issue of ‘inflation’ confounds the Fed these days. Despite antiquated analytical frameworks and econometric models, the Federal Reserve is showing zero inclination to rethink its approach. At the minimum, objective policy analysis would recognize today’s nebulous link between monetary stimulus and consumer price inflation. Rational thinking would downgrade CPI as a policy guidepost, especially relative to indicators of broader price and financial stability. Still, consumer prices rising slightly below 2% have somehow become central to the argument for maintaining aggressive monetary accommodation.
    The nature of economic output has fundamentally changed – from mass-produced high tech hardware, to limitless software and digitalized content, to endless pharmaceuticals and wellness to energy alternatives to, even, the proliferation of organic foods – just to get started. There is today essentially unlimited capacity to supply many of the things we now use in everyday life (sopping up purchasing power like a sponge). Much of this supply is sourced overseas, which further diminishes the traditional relationship between domestic monetary conditions and consumer price inflation.
    These dynamics have unfolded over years and are well recognized in the marketplace. To be sure, ongoing tepid consumer price inflation seems to be the one view that markets hold with strong conviction. So when Yellen suggested that below target inflation would alter the trajectory of Fed ‘normalization,’ the markets immediately took notice. When she again referred to the ‘neutral rate’ and implied that the Fed was currently near neutral, this further signaled a Fed that has developed its own notion of what these days constitutes ‘normal.’ Throw in that the FOMC plans to pause rate increases while gauging market reaction to its (cautious) balance sheet operations, and it has become apparent to the markets that the Fed won’t be pushing rates much higher any time soon.

    This post was published at Credit Bubble Bulletin


  • Are Silver Prices Going Higher After Last Week’s 3.3% Rebound?

    Silver prices are proving resilient once again, despite closing last week with a sell-off after silver’s latest ‘flash crash.’ Silver prices still managed to post a 3.3% weekly gain from the $15.37 close on Friday, July 7, to $15.88 on Friday, July 14.
    Aided by more dovish-than-expected statements from Federal Reserve Chair Janet Yellen and a drop in the U. S. Dollar Index (DXY) from 96 to 95.13 last week, silver seems to have bottomed out. The 3.3% rise last week came after the silver price fell on July 7 to its lowest level since April 8, 2016.
    That recent bout of weakness for the price of silver also caused a spike in the gold/silver ratio. So far this month, the ratio is up 3.8%, from about 74.72 to 77.58. This means it now takes 77.58 ounces of silver to purchase one ounce of gold – an indication that the silver price is very cheap right now. Cheap silver typically entices investors to buy in, which would lead the silver price higher this year.
    This supports my view that those holding their silver positions will be rewarded with double-digit returns in the coming months. That’s why I’m going to share my 2017 silver price prediction with you today.

    This post was published at Wall Street Examiner on July 17, 2017.


  • SWOT Analysis: A Closer Look at Novo Resources

    Strengths
    The best performing precious metal for the week was silver, climbing up 2.35 percent with the changing sentiment toward precious metals. Gold notched its first weekly gain in a number of weeks on weaker-than-expected inflation and retail sales data. Federal Reserve Chair Janet Yellen took a decidedly dovish stance this week, signaling the Fed was in no hurry to tighten monetary policy with monthly consumer prices growth falling short of the Fed’s target 2 percent. The gold market responded positively, with gold futures jumping sharply above $1,220 after her testimony.

    This post was published at GoldSeek on Monday, 17 July 2017.


  • Bank Of America Explains What Federer’s Victory Means For Fed Monetary Policy

    On Sunday, Roger Federer did what many in recent years said was impossible, when he won his record, 8th Wimbledon title, defeating Croatia’s Cilic in straight sets.
    Away from the court, the victory may be an ominous sign for EM bears. As Bloomberg’s Marc Cudmore said earlier this week, when he explained why he more focused on this Fed rather than the one run by Janet Yellen, “The Fed” has won seven of the past 14 championships. In every year he’s been victorious, both the MSCI EM Currency Index and the MSCI EM Equity Index have gained. By contrast, in five of the seven years he hasn’t finished triumphant, both those indexes have dropped.

    This post was published at Zero Hedge on Jul 16, 2017.


  • Goldman Is Troubled By The Fed’s Growing Warnings About High Asset Prices

    With both the S&P, and global stock markets, closing last week at new all time highs, it is safe to say that any and all warnings about “froth“, and perhaps a bubble in the market, as Deutsche Bank characterized it last week have been ignored. And yet, as Goldman’s economist team writes over the weekend, the recent rise in warnings about “risk levels” and asset prices by Fed officials is concerning: “Fed officials have expressed greater concern about asset prices and financial stability risk recently, a change from their more relaxed view last fall. In particular, the minutes to the June FOMC meeting highlighted concern about high equity valuations and low volatility and drew a connection between potential overheating in the real economy and financial markets.”
    To underscore this point, here is a recap of recent Fed warnings about asset prices, which have increased significantly since the presidential election:
    Janet Yellen, July 12, 2017
    So in looking at asset prices and valuations, we try not to opine on whether they are correct or not correct. But as you asked what the potential spillovers or impacts on financial stability could be of asset price revaluations – my assessment of that is that as assets prices have moved up, we have not seen a substantial increase in borrowing based on those asset price movements. We have a financial system and banking system that is well capitalized and strong and I believe it is resilient.

    This post was published at Zero Hedge on Jul 16, 2017.


  • Global Stocks Soared $1.5 Trillion This Week – Now 102% Of World GDP

    Thanks, it seems, to a few short words from Janet Yellen, the world’s stock markets added over $1.5 trillion to wealthy people’s net worth this week, sending global market cap to record highs.
    The value of global equity markets reached a record high $76.28 trillion yesterday, up a shocking 18.6% since President Trump was elected. This is the same surge in global stocks that was seen as the market front-ran QE2 and QE3.
    This was the biggest spike in global equity markets since 2016.

    This post was published at Zero Hedge on Jul 15, 2017.