Gold trades cautiously lower ahead of crucial Fed policy meeting
Fed balance sheet surges almost $300 billion in week one of bailout program
(USAGOLD –3/21/2023) – Gold is trading cautiously lower ahead of crucial FOMC deliberations amidst what many investors see as the early stages of a full-blown banking crisis. It is down $11 at $1970. Silver is down 8¢ at $22.55. Fed chairman Powell is likely to face stiff questioning at his press conference on Wednesday on the inflationary implications of a rescue plan JP Morgan predicts will add $2 trillion to the Fed’s balance sheet.
“Federal Reserve Total Assets surged $297 billion last week to $8.639 TN, in one week reversing four months – and over half – of recent QT (quantitative tightening). A $10 TN balance sheet by year end would not be surprising,” says Credit Bubble Bulletin’s Doug Noland in his regular Saturday update. “I appreciate that officials last weekend believed they needed to ensure all SVB and Signature depositors to stem a potential systemic bank run. Just as the Bernanke Fed had justification for opening the floodgate for unprecedented money printing… Where does it all end? For one thing, the Fed’s balance sheet will be getting much larger. I’ll assume global central bank balance sheets will also inflate.”
Federal Reserve total assets (balance sheet)
(millions of dollars as of 3/17/2023)
Source: United States Federal Reserve • • • Click to enlarge
