Bloomberg: These days, the Fed is obviously back in financial repression mode, and if it isn’t quite prepared to take nominal rates below zero it seems absolutely committed to keeping real rates there. While it is often tempting to overthink things, sometimes the basis of clear trends really is that simple. We’ve already seen it in equities and credit, and now clearly it is the dollar’s turn.
Precious metals highlight the difference between the current environment and 2017. While the usual caveats apply to looking at naive overlays, you have to respect the message being sent by bullion -- itself a response to the level (now and into the future) of real interest rates. This really shouldn’t come as a huge surprise-- the Fed was hiking in 2017 and they are trying to figure new ways to ease today.
Precious metals highlight the difference between the current environment and 2017. While the usual caveats apply to looking at naive overlays, you have to respect the message being sent by bullion -- itself a response to the level (now and into the future) of real interest rates. This really shouldn’t come as a huge surprise-- the Fed was hiking in 2017 and they are trying to figure new ways to ease today.