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Gold could well move a lot this evening
Fed will tighten credit faster and sees 3 rate hikes in 2022 just released at 19:00 GMT. Oh dear..
Bitcoin went from 47886 to 48983 in 15 mins
Fed tapered as expected, increasing to 30bn. Federal funds rate projections are substantially higher though. 0.9% next year from previous projection of 0.3% and 1.6% in 2023, from 1.0% projected.
Gold and silver seem to be reacting quite well. It seems the market had been pricing in a move that was even more aggressive than this, which would explain all the recent weakness.
Fed expects inflation to HALVE next year. The rationale for that? Who knows.
They've been wrong throughout the crisis on inflation. Very wrong. And they don't seem to be getting any better. Everything should be telling them wage inflation is here and is becoming entrenched. They can't pursue a mandate of full employment, against a backdrop of record vacancies, and not expect wage inflation to become the driving and sustained factor in inflation. To assume that supply chain issues will evaporate next year is a big leap, but to further assume companies won't continue to be forced to raise wages to entice or retain workers from a smaller labour pool is fairly myopic or deliberately disingenuous. As long as there are so many more vacancies than qualified people willing to fill them, wage inflation will burn hot.
As long as the $ remains the dominant world currency that's all the Fed care about which gives me some concerns about bitcoin and how will they squash it. Pog took a dive on the immediate release at 7pm but clawed back from its low atm anyway. Same old same old.. and the show goes on..
Finally gold getting a bid as I thought it would.
I don't think the market is buying what the fed is selling.
They're saying on the one hand they expect inflation to halve next year and conveniently keep falling neatly into their 2% target, but the dot plot says all members expect to raise rates to between 2 and 3% by 2024. Why exactly would they need such aggressive rate rises year on year for the forseeable future if they're so sure inflation will dissipate on its own long before they even have a chance to start raising rates and seeing an effect. It doesn't add up. The dot plot screams an expectation of high inflation, but their stated inflation expectation tries to pretend that inflation is still "transitory".
Metals are going to do well into the new year, at least until March, now that we more or less have a timescale for the end of taper and initial rate rises. I think the market will adjudge that it's too little and too slow, especially if CPI keeps surprising to the upside.
I sense Sprott Money may have got this right. Centamin to go back up to 112p area mid to late first quarter. What was missing from all of the FED talk was climate protection and implementing COP26 measures. The reason being is that they are inflationary. Doing nothing is unproductive GDP and negative growth.
If BoE holds off on rate rises again later, gold ought to head above 1800.
Fed`s crazy policies helping us this morning,.US inflation hit 9% last week and they decide to continue with QE until March next year. The permanent officials believe in policies that will stoke inflation and the guys who meet once a month aren`t prepared to tear up the papers that are put in front of them. That`s life.
Central bank words are becoming a little irrelevant. Stagflation is nearly upon us.
Cey is an absolute bargain.
Who were those big buyers after the close yesterday ?
Morning Steve, aIll check tonight for the same.
No RNSs so maybe a canny investor,as it wa an Ordinry 2 trades not Automatic.
So far they called it right
The Market defies logic.
Hawkish fed yet markets rise and so does Rolf and crypto … I think inflation will defo dip lower next year as believe primary cause has been QE and COVID causing some supply chain issues- as I’ve been saying since April last year - k showed recovery and this remains true now- the markets are not eh economy…
Central banks are still relevant as they control the printing presses.
Agrrrh- without typos…
Hawkish fed yet markets rise and so does gold and crypto … I think inflation will defo dip lower next year as believe primary cause has been QE and COVID causing some supply chain issues- as I’ve been saying since April last year - k showed recovery and this remains true now- the markets are not the economy…
Robbie if you read what I said, Central Bank words.....
There`s nothing hawkish about this Fed. They are still printing. Actions not words is what counts. They say they will stop printing in March next year and interest rates might hit 1 per cent by December. That`s no remedy when inflation is 9 per cent and rising. Expect to see the same in reaction from the BOE today. The RPI hit 7 per cent yesterday.
Quite often it's words and not actions that get a reaction. Point being I did not say Central banks are irrelevant, of course they are not.
Theyf ed cannot reign in inflation as there is no growth the recession would be huge if rates rose to achieve this. Hence my stagflation comment earlier if you understand that.....
I apologise for spelling. Sausage fingers.
It’s hawkish relative to their previous position. Markets respond with their view - which is often different to what is said- we are in uncharted times as this is a recovery from a pretty much stopped and restarted economy - different from previous general cycles. We still have a k shaped recovery.
On the Fed`s current course the economy will remain hot hot and inflation will go much higher. Democrats heeding for a beating next November.
"Watch what they do, not what they say"
Is it top of the market, are tech and other equities massively over valued for no other reason than meme sharing on twitter. Perhaps Elon really is just doing whatever people on twitter say he should do, as protest to regulators and politician's tax proposals