Inflation concerns reshape expectations for central bank policy Global investors are adjusting their outlook for interest rates as inflation proves more persistent than expected and bond yields continue to rise. Earlier expectations of rapid rate cuts have been replaced by a more cautious approach, with markets now considering how long central banks may need to maintain restrictive monetary policies. Inflation remains a key concern...
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Federal Reserve Signals Restraint on Policy Easing The Federal Reserve has indicated a cautious approach to cutting interest rates, prompting a negative reaction across global financial markets. Investors had previously anticipated a clearer path towards policy easing, but central bank officials stressed the need for further confirmation that inflation is under control. This measured tone reflects ongoing concerns about persistent...
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The year 2024 ends with the Fed keeping monetary policy in restrictive territory. Despite three rate cuts in 2024, with a 25-basis-point reduction in November and a more aggressive 50-basis-point reduction in September, sending the Fed fund rates to 4.25% to 4.5%, which is still above the neutral rate of 3.1% and therefore restrictive. Why is the Fed keeping rates in restrictive territory? There is still persistent inflation in...
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Monetary policy is spent and further easing could put the financial system into the red danger zone. Gold’s spot price, monetary policy’s voting machine is signaling to the market that monetary policy is spent. So the great gold rally is underway. Negative interest rate policy (NIRP), is a backfiring gun. Moreover, endless quantitative easing QE is the market’s bubble-blowing clown that is already passé. The law of...
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