Bloomberg/John Authers/6-15-2022
“But that’s not important compared to the overall guidance, which is that the Fed admits that it has an inflation problem, and is prepared to raise rates to eliminate it, even if that means higher unemployment. And that the market broadly speaking is happy for the central bank to do that. Even though the Fed continues to claim that a soft landing is likely (and it’s still just about possible), we now have clarity that the world has changed.”
USAGOLD note: A deep dive into the Fed’s latest meeting and follow-up press conference … We do not often disagree with Authers, but this time around we come away with a very different impression. Rather than clarity in Wednesday’s events, we saw ambiguity, lack of direction, and uncertainty. We do not see this Fed as a real inflation fighter, but as quite the opposite and trying to make the financial world think otherwise. The world may have changed the result of yesterday’s Fed meeting, but, in our view, not in a profound way.
