If you thought the Fed was supposed to be the adult in the room, think again. While the task of party chaperone is never easy, it gets infinitely harder when dealing with toddler-like equity markets, who demand extra coddling while threatening bad behavior.
Increased optimism on Monday resulting from a reported U.S.-China trade truce following the G-20 conference followed by a stronger-than-expected employment report on Friday moved U.S. stock markets higher, strengthened the U.S. dollar and increased the 10-year U.S. Treasury rate.
Increased optimism on Monday resulting from a reported U.S.-China trade truce following the G-20 conference followed by a stronger-than-expected employment report on Friday moved U.S. stock markets higher, strengthened the U.S. dollar and increased the 10-year U.S. Treasury rate.
Comments from U.S Federal Reserve Bank officials, including Fed Chairman Jerome Powell, lowered expectations of of two rate cuts this year, pushing U.S stock markets slightly lower while leaving the U.S. dollar practically unchanged.
A common refrain among gold investors over the past several years has been, gold may be rallying, just not in your currency. This statement has been particularly true for U.S. investors, where periods of dollar strength exacerbated the sideways trading nature of gold since 2013.
Despite ECB statements indicating more stimulus would be needed and greatly increased tensions between the U.S. and Iran precipitated by Iran’s shooting down of a U.S. drone on Thursday, the U.S. dollar sharply weakened following U.S. Federal Reserve Bank Chairman Jerome Powell’s comments – at the end of the 2-day FOMC meeting – that the Fed would act as needed to sustain economic growth.