FED holds benchmark rate, May cut remains unlikely
The US Federal reserve holds benchmark rate in 5.25-5.5% target range. Jerome Powell prepared remarks and Q&A answers were more dovish than during the January meeting. FOMC median forecast remains at 75 BPS rate cuts for 2024, but the forecast increased from 3.6% to 3.9% in 2025.
Gold reacted to Powell's dovish tone by jumping to a new record high and breaking the 2200 level.
Source: Bloomberg
SNB could surprise with a rate cut as banks turn against Franc
A handful of banks expect Switzerland’s policymakers will go against forecasts and cut interest rates in their first decision of the year.
Barclays, Citigroup, Julius Baer and others are among the few predicting the Swiss National Bank will deliver a reduction aimed at safeguarding the economy from potential currency strength.
Source: Bloomberg
SNB reveals carbon footprint of its portfolio for first time
The Swiss National Bank disclosed the carbon footprint of its investment portfolio for the first time, responding to critics who have demanded it take a more active stance on climate change.
The SNB said it’s “not authorized to pursue structural policies” and pursuing such actions could make it more difficult for its to fulfill its primary mandate of inflation control.
The SNB’s environmental rules only ban coal miners. That means its holdings include firms involved in fracking, and the oil and gas industries.
Source: Bloomberg
Central banks are hoarding gold like never before...
Source: BofA
Central banks demand matters a lot more than ETF flows for gold
Source: Bob Elliott, Bloomberg, Macrobond, The Daily Shot
Unveiling the Impact of Quantitative Tightening: Intersting Insights from FT
🌟 Delving into recent insights from the Financial Times sheds light on the impact of Quantitative Tightening (QT) and its implications for financial markets. Let's break it down: 📊 QT's Functionality: Recent evidence from a study involving seven central banks, including the Fed's earlier QT efforts from 2017-2019, reveals that QT operates "in the background," subtly supporting central banks' endeavors to tighten financial conditions without significantly disrupting market functioning or liquidity. 💼 Market Reaction: Announcements of QT's commencement have led to slight increases in government bond yields. However, the actual implementation of QT, including outright bond sales, has had minimal disruptive effects on market dynamics and liquidity. 🔄 Passive vs. Active QT: The distinction between passive and active QT strategies is crucial. While passive QT (letting bonds mature) impacts short-end yields, active QT (outright sales) tends to steepen the yield curve, highlighting the nuanced effects of different QT approaches. 🤝 Market Support: The smooth adjustments observed in response to QT can be attributed partly to domestic nonbanks and, to a lesser extent, foreign investors stepping in to purchase securities as central banks reduce their holdings, maintaining market stability amidst changes in monetary policy. 💡 Navigating Future Challenges: What strategies will central banks employ to navigate the looming challenges posed by high government debt issuance and absorbed pandemic-era liquidity, in light of the insights gleaned from recent evidence on quantitative tightening's impact? #QuantitativeTightening #FinancialMarkets #CentralBanks #EconomicInsights
BREAKING >>> SNB Chairman Thomas Jordan to step down at the end of September 2024
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The European Central Bank claims "Bitcoin has failed to become a global decentralised digital currency, instead falling victim to fraud and manipulation (...)"
"The recent approval of an ETF doesn’t change the fact that Bitcoin is costly, slow and inconvenient." Whatever Lagarde and the ecb say, the harsh reality is that the euro has collapsed againt bitcoin as all fiat currencies did. Source: Aries V., Senior Investment Data analyst at Fidelity
