freight rates declining,” as examples of easing inflationary pressures that warrant the Fed taking a less aggressive stance on raising rates. He also cited the sharp rise in the U.S. dollar, saying “the dollar is showing how tight the Fed actually is.”...
Here the Fed Chair lost me. If the purpose of holding the MBS is indeed to produce a monetary stimulus, and if the purpose of raising the interest rate paid on reserves is indeed to produce a monetary contraction, why would the Fed want to do both at the same time? And yet Bernanke ...
Nevertheless, any rate hike is seen as a negative for gold. Whenever interest rates tick up slightly, the mainstream is quick to inform us that “rising interest rates increase the opportunity cost of holding gold.” This is why we’re seeing another selloff in gold as everybody gears up ...