Something has to be done at the Fed. On Tuesday, Kansas City President Ester George said, “There has been NO substantial shift in the outlook that would justify pausing further gradual rate hikes.”
Gold and silver sells off on her comments.
Wednesday New York Fed President William Dudley said, “The tightening of financial conditions that have taken place since the FED began raising short–term interest rates in mid-December is a matter of considerable concern to the FED.” He also indicated that a weakening of the Global economy accompanied by further appreciation in an already strong dollar could have “significant consequences” for the U. S. economy.
Gold and silver rallied off his comments, the dollar index sells off.
What is reported in their comments have a direct effect on all the markets, from equities to oil, to the dollar and commodities. How could two people that sat at the same table and collectively agreed on what direction the FED will take at that meeting come out a month later and BE ALLOWED TO EXPRESS TWO COMPLETELY OPPOSITE VIEWS ON THE FED POLICY GOING FORWARD?
We need and demand orderly markets in order to attract investment. These crazy comments bring uncertainties to all markets and chase folks from investing in them.
It’s time for the Fed Chair to stand up to these folks and tell them to keep their comments to themselves and let the FED minutes collectively speak for them.
By the way, since Dudley’s comments the dollar has weakened substantially creating a strong rally the gold price.
Author Name: Walter Pehowich
Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.