Gold gained and the dollar fell on expectations that the Fed Reserve would halt further rate hikes in 2019. But has the Fed lost its ability to control interest rates and get the economy back on track?
Has the Fed Lost Control of Interest Rates?
Patrick Brunson: 00:00
So gold rose on Monday due to a weaker dollar on expectations that the Federal Reserve might apply the brakes on it's monetary tightening cycle here in 2019. The dollar is weakening and it's aiding gold into its next bull market. A lot of this is stemming from Jerome Powell's comments on Friday about the future of interest rate hikes and his dovish views have become a bullish factor for gold as well. Now, the big question here is this, why is the Fed all of a sudden starting to reverse their stance on interest rate hikes? They've been very aggressive up to this point about normalization and giving things back to the way things should be. So are they just posturing to calm the current market volatility that we've been watching over the course of the last month or so? Are they taking into consideration all of the criticism they've received for raising rates when the rest of Wall Street and the Trump administration wanted them to keep them low?
Patrick Brunson: 00:54
Why did they raise rates to begin with just to turn around in 2019 and slow them back down again? After all, the raising of interest rates is the path back to normalization within our country and its economy. So here's the bottom line. The Federal Reserve is an entity that handles monetary policy here in the U.S. and does not take any orders or direction from any other entity to include the United States government. The president cannot step in and tell the Fed chairman what to do with monetary policy and what to do with interest rates. In recent years however, this has become a topic of extreme skepticism and many people believe that the Fed is in fact taking directives from big name individuals within Wall Street and Capitol Hill. After all, the position of Fed chair is a directed position by the president, not an electoral position. The reason all of this is so important to understand is because by knowing this info, it allows the average consumer like you and me to know what's happening with our currency and basically within our financial system, there's a lot of speculation that the Fed has raised rates simply because they know that the country is heading for another recession and their main tool for helping us get out of the recession is to raise rates itself. But how can they do that if rates are still at an artificial lows or near zero from the last financial crisis?
Patrick Brunson: 02:22
We have to take these things into consideration when making financial decisions and moves within our own portfolios. We're seeing a lot of these things take place. That paints a very clear picture that most financial entities like the Fed and Major Wall Street and commercial banks are all preparing for a major downturn in the financial system as well as our currency, our dollar. So if you'd like to start preparing as well and get more information about this, you can click on the link below or call the number on your screen to get your copy of U.S. Money Reserve's latest report, ‘25 reasons to own gold‘. Now it has a lot of information regarding topics just like this that can really break things down very easily and help the consumer understand the basics the mainstream media is not covering. Call The number now to get your copy, and as always, thank you for watching U.S. Money Reserves Market Insights.