Gold turns quietly to the upside on less-than-aggressive Powell policy stance
Better Markets says the US is now dealing with ‘historically high persistent inflation’

(USAGOLD – 2/8/2023) – Gold turned quietly to the upside in early trading following the Fed chair’s less-than-aggressive positioning before the Washington Economic Club yesterday. It is up $2 at $1877. Silver is up 21¢ at $22.43. Many suspected Powell would come out guns blazing following last Friday’s big jobs numbers. Instead, we got a promise of more of the same – more restrained rate increases only over a more extended period. The markets, according to press reports, are reading the speech as dovish.

Stating that the US is now dealing with “historically high persistent inflation,” Better Markets’ Dennis Kelleher and Phillip Basel see the Fed and financial markets as living with a banquet of consequences the result of Fed policies past and present – “an unprecedented array of multiple, simultaneous, and consequential economic, financial, and geopolitical shocks that are causing significant volatility and stress in financial markets while straining consumers and businesses in the real economy. In this environment, the margin for error is vanishingly small.” [For the full report, please see “Federal Reserve Policies and Systemic Instability: Decoupling Asset Pricing from Underlying Risks,” Kelleher and Basel, January 17, 2023.]