Key Points
We cant say for sure whether the Federal Reserve should maintain or cut its current target for short-term interest ratesand neither can the Fed, or anyone else..
Which is why the recent run-up in the prices of gold and other commodities is worth watching..
But its hard to miss that golds surge followed Fed Chairman Jerome Powells reiteration that he expects to cut short-term interest rates at some point this year.".
The Fed believes that the risk of recession grows the longer restrictive monetary conditions are in place and as slowing inflation causes real, inflation-adjusted interest rates to rise..
The point is that the Fed and its fellow central banks are running an unprecedented experiment as they unwind 15 years of ultralow interest rates and previously unfathomable bond buying..
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