Today one of the greats in the business said he believes the Fed is finished raising rates and he remains bullish on gold and silver.
High Likelihood Fed Done With Rate Hikes
December 20 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: I’m trying to figure out whether Jay Powell is trying to Volkerize the Fed or he actually believes the economic data warranted a rate hike and will continue to in 2019. As for the former, I would define that as trying to wean the economy and markets from the addiction of many years of excessively cheap money and away from this seemingly endless regime of negative real interest rates and the legacy of QE…
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Or, he really believes that the US economy is just fine, with a few vulnerabilities here and there but nothing to worry too much about it just yet.
The Real Error
Either way, let’s get something straight here in this discussion of whether the Fed is making a policy error or not with what they did yesterday and what they hope to do in 2019 with both rates and the balance sheet. The real policy error was keeping rates at zero for 7 years, waiting an eternity in reversing it and quintupling the size of its balance sheet. After that, the Fed entered a no win situation in reversing it no matter when it came and regardless of the pace.
If I were to guess what the Fed will do in March, as they will certainly do nothing in January, I’d say they do nothing and I think there is a high likelihood they are done with the rate hikes.
Gold At 5 Month High
One last thing after yesterday in light of a Fed that wants to keep on tightening, if the data confirms (blah, blah, blah), the US dollar all of a sudden is trading poorly. It’s at a one month low. Is it worries that further tightening will lead to slower growth? Is it concerns with rising US debts and budget deficits? Is it a trade deficit that keeps getting bigger? In turn, gold is trading at a 5 month high. I remain very positive on gold and silver, especially now with the Fed just about done with its rate hike cycle I believe, putting aside the balance sheet shrinkage.
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***KWN has also released the audio interview with Gerald Celente where he discusses his top 10 trends for 2019 CLICK HERE OR ON THE IMAGE BELOW.