Bloomberg/John Authers/11-2-2022
‘The Fed has an established mechanism for guiding on where it thinks the peak rate is heading, in the ‘dot plot’ that comes out four times per year. The November meeting was dot-less. To make such direct guidance about the likely future course of rates without a dot plot to back it up was very unusual, and signaled Powell’s determination to expunge any market belief in an imminent easing of rates.”
USAGOLD note: The Fed, as we have said in the past, does not need to pivot to be dovish. It just needs to make sure the lending rate stays below the inflation rate. Raising rates, in and of itself, is not hawkish. That, however, is not the market’s definition of dovish these days. At the same time, we see signs that the interpretation of Fed policy might be shifting on that score with the surge in precious metals prices over the past five days perhaps serving as early evidence.
