EVERYTHING PEAKED IN 1980
Both gold and crude oil peaked at all-time highs in 1980. Those highs are still intact when the effects of inflation are accounted for. Below are the charts for both gold and crude oil…
Powell and Yellen
Overheated Economies And Market Predictions
OVERHEATED ECONOMIES AND MARKET PREDICTIONS
Janet Yellen said the following last week…
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat”
Later that same day, she said this…
“It’s not something I’m predicting or recommending. If anybody appreciates the independence of the Fed, I think that person is me, and I note that the Fed can be counted on to do whatever is necessary to achieve their dual mandate objectives.”
Also last week, we heard from the Federal Reserve which released the following statements on Thursday, May 6, 2021…
- Rising asset prices are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.
- “Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.
Before we can understand how to interpret these statements and any possible conflictions, there are four key topics which need to be explained: inflation, the Federal Reserve, interest rates, and the economy.
Powell And Yellen – Team Fed
POWELL AND YELLEN…
Flashback 11/21/2017:
“President Trump nominated Jerome H. Powell as the new Chairman of the Federal Reserve Bank. Don’t look for much to change. And Janet Yellen’s announcement that she will resign from the board upon Mr. Powell’s induction as board chair is pretty much a non-event.” (see New Fed Chairman, Same Old Story)
Currently, comments by Jerome Powell last week regarding inflation and its effects spooked some investors and analysts. Investors in leveraged Treasuries were dealt a severe blow when yields spiked and bond prices fell. Others have claimed that the sky is falling and that inflation is all around us.