A Close Look at the Fed, the Dollar and Interest Rates.
In this report I cover the early market activity from London on Thursday, May 24th, 2018. I look briefly at the precious metals, the stock market, the dollar and interest rates. I note how gold and silver have held up fairly well despite a fairly strong dollar and how the gold/silver ratio still looks set to go lower.
I also look back at the recent history of the Federal Reserve's Federal Open Market Committee or the FOMC and how this committee's monetary policy has been set since the beginning of the 21st century and where we are now in terms of policy.
I note that despite six rate hikes since December 2015 from the FOMC the dollar as measured by the dollar index is now at a lower level than it was then. I also note that with the Fed Funds target rate presently at 1.5% we are at the same rate that we were just after the bankruptcy of Lehman Brothers in September of 2008.
My conclusion is that to call the Fed hawkish or tough on rates is an oxymoron and that their current monetary policy is still very far from being one of tight credit and money.
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Thank you, you are spot on.
I am wondering the following.
If the US economy is not really doing as good as the always adjusted down stats as indicated by the retail sector melt down and house bubble showing signs of bursting as interest rate goes up. Reports also show US household saving down and debt up. All sign of recession. There should be less demand for oil and oil price should come down. We are seeing Chinese importing US oil and oil price keep going up. Is it all Middle East tension production cut / sanctions etc driving the price?
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Off course sir, you are right I mean it. Because monetary policy is still very tight for credit and money
I would say it (monetary policy) is still very loose compared to historical standards.
If you look historically, then your words are right. Thanks @maneco64