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Market news: Apple (AAPL.O) has raised the price of its AppleCare+ service. The monthly plan for Mac and iPad will increase by 50 cents, and the annual plan will increase by $5. This only affects new users.July 16 - The Indian government announced adjustments to windfall profits taxes on petroleum products, effective July 16. Specifically, the windfall profits tax on diesel exports will increase from 8.5 rupees per liter to 15.5 rupees per liter, and the export tax on aviation turbine fuel will increase from 7.5 rupees per liter to 14.5 rupees per liter; while the export tax on gasoline will decrease from 4 rupees per liter to 2.5 rupees per liter.July 16th - The Federal Reserves Beige Book showed that overall U.S. price levels rose moderately. Of the 12 Fed districts, 9 reported moderate price increases, 2 reported stronger increases, and 1 reported a smaller increase, with the overall increase remaining flat or slowing compared to the previous period. The report stated that rising energy, transportation, and raw material costs pushed up business input costs, with some businesses attributing the pressure to the Middle East conflict and tariffs. Consumer prices continued to rise, squeezing the profit margins of some businesses. Market opinions are divided regarding future inflation trends; some expect inflation to remain at current levels, while others believe that declining fuel prices may alleviate the pressure.July 16th - The Federal Reserves Beige Book showed that the U.S. job market maintained overall growth. Of the 12 Fed districts, five saw modest, moderate, or significant job growth, while seven remained largely unchanged, an improvement from the previous period where only one district reported job growth. The report stated that employment increased in several sectors, including manufacturing, construction, and retail, but recruiting skilled workers and technicians remained difficult. Job losses occurred in some districts, but the declines were limited. Regarding wages, most districts saw modest to moderate wage growth, with some increases related to companies competing for skilled labor. Furthermore, a few districts saw companies increasingly utilizing artificial intelligence for recruitment screening or to improve employee productivity.July 16th - The Federal Reserves Beige Book showed that U.S. economic activity grew slightly to moderately in 11 of the 12 Fed districts during the period from the end of May to June, with the overall growth rate roughly the same as the previous period. The report stated that factors such as high oil prices dampened some consumption, with consumers reducing spending on non-essential items and turning to lower-priced goods. Tourism saw some recovery, with World Cup-related travel providing a boost to some regions. Manufacturing maintained moderate growth, with orders increasing in data centers, machinery, and defense. Construction and real estate activity improved slightly, with data center construction being a bright spot. In addition, drilling activity in the energy sector increased, financial conditions were generally stable, and commercial and consumer lending rose moderately. However, agriculture was affected by declining commodity prices, rising costs, and tighter credit. Most respondents expected the economy to continue expanding in the coming months, but significant uncertainty remained regarding the outlook for fuel costs.

The Devil Is In The Details: Gold Analysis - Federal Reserve Minutes

Larissa Barlow

Apr 07, 2022 10:33

Analyses of Federal Reserve Minutes 

While both the FOMC statement and Chairman Powell's press conference provide market participants with information about the FOMC's updated and revised monetary policy, it is the release of the minutes that provides investors with significantly greater clarity and understanding. The devil, as they say, is in the details.

 

The Federal Reserve issued the official minutes from its March FOMC meeting today, providing insight into the central bank's current plans to begin unwinding its balance sheet assets. Beginning in March 2020, the Federal Reserve will add around $4.6 trillion to its balance sheet by purchasing $120 billion monthly in mortgage-backed securities ($40 billion) and US Treasury securities ($80 billion), bringing their total to just over $9 trillion.

 

According to Federal Reserve Governor Lael Brainard, the Fed intends to employ a mix of interest rate rises and a quick run-off of the balance sheet to bring US monetary policy closer to neutral later this year.

 

However, the minutes released today imply that the Federal Reserve will unwind around $3 trillion over the next three years, reducing its $9 trillion balance sheet to $6 trillion. While the Fed appears to be indicating a quick runoff of its balance sheet, the reality is that the Federal Reserve's balance sheet will be nearly $2 trillion larger than it was prior to the epidemic.

 

"Participants continued their discussion on plans to reduce the size of the Federal Reserve's balance sheet in a manner consistent with the methodology outlined in the Committee's Principles for Reducing the Size of the Federal Reserve's Balance Sheet, announced following its January meeting."

 

Additionally, the minutes stated, "While no decision was made regarding the Committee's plan to reduce the Federal Reserve's balance sheet at this meeting, participants agreed that significant progress had been made on the plan and that the Committee was well positioned to begin the process of reducing the balance sheet's size as soon as after the conclusion of its upcoming May meeting."


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