In this report, I cover the early market action from London on Thursday, October 31st, 2019. I look briefly at the precious metals, the stock market, the dollar, the bond market and the price of WTI and Brent crude oil.
Today I go over the Fed's decision yesterday to cut rates and I also look at what Fed chairman Jay Powell said during his press conference after the FOMC meeting. Even though Powell said the economy is in "a good place" and the labour market is strong the FOMC decided to cut rates for the third time this year.
The main take for me from the Fed's current monetary stance is that they have manoeuvers the U.S. Treasury yield curve into a point where the whole yield curve, with the exception of the 30-year yield, is providing a negative real rate of return when you take into account the Fed's favourite measure of inflation the core PCE which is at 2.2%.
My conclusion is that the Fed is giving the markets and speculators what they want even though the stock market is at all-time highs and the economy is supposedly in "a good place". I personally am not joining this party which is quickly turning into a rave.
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