Fed Up Friday

In light of the Fed rate hike news finally dropping this week, we can start looking ahead to the rest of the year. It’s a great time to be Fed Up with the election looming and global central banks making moves to preserve their economic health into next year.

Fed Holds Interest Rates “For the Time Being’”

In her press conference Wednesday afternoon, Janet Yellen said the Fed decided to keep rates at their current target but pushed that a hike before the end of the year was likely. The delay suggests Yellen and policy makers are continuing to keep up the illusion of economic health by maintaining an undercurrent of optimism despite the bad data continuing to come in.

“The case for an increase in the federal funds rate has strengthened,” she said, citing a need to “wait for further evidence of continued progress” in the economy. Despite the renewed optimism express by Yellen, most economists are still skeptical of a November hike, given that it’s just before the election.

Fed Up Friday

Bank of Japan Drops Bomb on Markets with Aggressive Easing Strategy

In an unexpected turn Wednesday morning, Japan’s Central Bank dropped a bombshell as they launched their 10-year target to increase inflation with aggressive quantitative easing. The move involves keeping 10-year interest rates extremely close to zero, with their goal being to spark inflation in the coming years. This would effectively “engineer” a more profitable space for banks to plan for in the long term. The announcement sent banks rallying and Japanese and European stocks soaring.

Central Banks around the World Keep Stocking Up on Gold

Nearly 20% of all the gold ever mined in the world is owned by central banks. That’s why when banks start turning back to purchasing more gold annually, it becomes a significant event. The buying trend is reappearing after world banks began selling off after 1970, giving the yellow metal a central role in money management it hasn’t seen in nearly 50 years.

It turns out this could all be evidence of a new “Age of Gold” as the Official Monetary and Financial Institutions Forum (OMFIF) laid out in its research document the “Seven Ages of Gold.

Trump Aid Says Yellen Building “Paper Bull” for Obama

Peter Navarro from Trump’s campaign team spent some of this week defending the Republican candidate’s attacks on the Fed. Earlier in the month, Trump accused the Fed Chair Janet Yellen of leading the nation into a “very false economy,” and Navarro clarified this week.

“What we have is a stock market that is the Obama paper bull,” Navarro said in an interview on Tuesday. “The Federal Reserve, in keeping interest rates low in conjunction with an Obama administration – which doesn’t know how to get the economy going again – has created this false situation. And I think it’s fair to say that the Fed has been playing along with it.”

As we await more details about Trump’s economic plans, we can all agree on one thing: He’s just as Fed Up as we are.

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Peter Schiff

Mr. Schiff began his investment career as a financial consultant with Shearson Lehman Brothers, after having earned a degree in finance and accounting from U.C. Berkeley in 1987. A financial professional for more than twenty years, he joined Euro Pacific in 1996 and served as its President until December 2010, when he became CEO. An expert on money, economic theory, and international investing, he is a highly sought after speaker at conferences and symposia around the world. He served as an economic advisor to the 2008 Ron Paul presidential campaign and ran unsuccessfully for the U.S. Senate in Connecticut in 2010.