With the correction in the gold and silver markets nearing its end, central banks have become very concerned about major volatility in interest rate markets.

March 3 (King World News) – Peter Boockvar:  We’ve gotten some mixed comments from ECB members over the past few days with the Bank of France Governor a few days ago saying the ECB “can and must react against” a rise in yields that he doesn’t feel warranted. Yesterday Executive Board member Fabio Panetta said

“The steepening in the nominal GDP weighted yield curve we have been seeing is unwelcome and must be resisted…If unaddressed, this would lead to a tightening of financing conditions that is inconsistent with our domestic outlook and inimical to our recovery.”

Today Bloomberg is reporting:

“ECB policy makers see no need for drastic action to combat rising bond yields, believing the risk to the economy is manageable with verbal interventions and the flexibility of their bond buying program, according to officials familiar with internal discussions.”

I guess what we’ve seen over the past two days was the ‘verbal’ part. As for enlarging QE:

“A step such as expanding the overall size of their 1.85 Trillion euro emergency bond buying program is currently unnecessary, they said.”

To all the world’s central bankers that are dealing with an environment they are not accustomed to, Mike Tyson had something to say once about everyone having a plan before they get punched in the face…

Billionaire Eric Sprott just bought a 20% stake in a mining company
to find out which one
click here or on the image below

European bonds sold off right after the story hit but are about back to where they were just prior but still lower with yields up. That in turn is resulting in selling in US Treasuries with the 10 yr yield back to 1.44%. The dollar is mixed. 

Fed Governor Lael Brainard, possibly the next Fed Chair in 2022, said yesterday:

“I am paying close attention to market developments. Some of those moves last week and the speed of the moves caught my eye. I would be concerned if I saw disorderly conditions or persistent tightening and financial conditions that could slow progress towards our goal.”

I’ll say this, any success the Fed has in creating more inflation will tighten financial conditions and therein lies the inherent contradiction within Fed orthodoxy that they don’t seem to realize.

Real Estate
The average 30 yr mortgage rate jumped 15 bps on the week to 3.23%, the highest since July coincident with the jump in the 10 yr yield.

Mortgage apps though were little changed but came after declines of note in the three prior weeks. Purchases rose 1.8% w/o/w after dropping by 21% in the three weeks before. Refi’s were up 1% w/o/w after falling by 19% in the three prior weeks. Versus last year, purchases are basically flat, up by 1% while refi’s are up 7.1%. Certainly a big influence on the slowdown in purchases is the lack of supply but pricing combined with a lift in rates likely was too.

To listen to a powerful and timely interview with E.B. Tucker about the fierce trading action in the gold and silver markets CLICK HERE OR ON THE IMAGE BELOW.

Alasdair Macleod discusses why the gold and silver markets are very close to a major bottom CLICK HERE OR ON THE IMAGE BELOW TO LISTEN.

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