Here is a look at interest moves by central banks today, plus the world is waking up to gold and silver.
The Gamble To Keep Interest Rates Low
February 6 (King World News) – Peter Boockvar: There is one thing to harass and jawbone Jay Powell to lower short term rates and another completely different thing trying to tame the long end of the yield curve which of course can only be influenced indirectly (outside of the Fed itself directly getting involved via asset purchases). Treasury Secretary Scott Bessent said on Fox Business yesterday that he and Trump are “focused on the 10 year Treasury. He is not calling for the Fed to lower rates.”
Their goal in keeping long rates low is reliant on calming inflation and mostly via lower energy prices but as we know, something that is tough to control in terms of convincing oil companies to drill more when the price is not necessarily right. Also helping will be lower government spending and cutting its size. If so, Bessent says “we’re going to go into a good interest rate cycle.” On the spending, efficiency side, that is something directly in their purview, let’s hope it succeeds.
England Cuts
Similar to the ECB, the Bank of England’s sole mandate is supposed to be inflation but they are also more focused on slow economic growth and cut their bank rate by 25 bps to 4.50% as expected with two members wanting to cut 50 bps including the usual hawk Katherine Mann which was not expected. The other 7 agreed to cut 25 bps. “In support of returning inflation sustainably to the 2% target, the Committee judges that there has been sufficient progress on disinflation in domestic prices and wages.” They finished up their statement by saying again, “Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.”
With two members wanting a 50 bps cut today, the 2 yr yield is down by 6 bps on the day to 4.09%…
…and the pound is down 1%.
Yen Rally Continues
On the flip side, the yen is rallying again as BoJ member Naoki Tamura gave us his game plan for getting Japanese short term rates to 1% from the current .50%. He said this should take place by the end half of fiscal 2025. “I think the bank needs to raise this rate in a timely and gradual manner, in response to the increase in the likelihood of achieving the price stability target…Now is the time for the Bank to ease off slightly from pressing hard on the accelerator of monetary easing.”
In response too, the JGB 2 yr yield was up for the 7th straight day to .77%, a fresh 16 ½ year high.
The Word Is Waking Up
King World News note: The world is waking up to the fact that all of these fiat currencies are garbage backed by nothing, which is why the price of gold has remained so firm. 2025 will be the year that silver breaks through the all-time high of $50. The high-quality mining and exploration stocks will be the biggest surprise as they aggressively outperform both gold and silver.
Gold Price Set To Surge Another $2,000+
To listen to Nomi Prins’s remarkable predictions for the price of gold, silver, mining stocks, uranium and much more CLICK HERE OR ON THE IMAGE BELOW.
JUST RELEASED! Gold Price Hits All-Time High
To listen to Alasdair Macleod discuss gold and silver breaking out and more surprises CLICK HERE OR ON THE IMAGE BELOW.
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