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British Prime Minister Starmer: There is no disagreement between Britain and the United States on the issue of security guarantees for Ukraine.On January 7th, Bert Colijn of ING stated in a report that the European Central Bank (ECB) can wait for more economic data before deciding on its next move. Eurozone inflation fell to its target level of 2.0% in December from 2.1% in November. He pointed out that looking ahead to the next few months, a stronger euro, low energy prices, and slowing wage growth all suggest that price increases will further moderate. However, due to recent increases in business expectations for selling prices, inflation is not expected to fall significantly below 2%. Colijn believes that inflation may face renewed upward pressure later in 2026, as fiscal spending is expected to provide a modest boost to economic growth. He added that the ECB is "fully capable of waiting for more signals about the direction of the economy and inflation before deciding on its next move."January 7th - U.S. mortgage rates fell to their lowest level since September 2024 last week, offering a glimmer of hope for a sluggish housing market at the start of the new year. According to data released Wednesday by the Mortgage Bankers Association (MBA), the contracted rate for a 30-year mortgage fell 7 basis points to 6.25% in the week ending January 2nd. The rate for a 30-year large mortgage used to purchase an expensive home fell to 6.32%, the lowest point since April 2023. These figures are encouraging for a housing market that has struggled with affordability issues in recent years. According to the National Association of Realtors (NARL), pending orders have risen for four consecutive months, indicating a strengthening sales momentum as the new year begins. Despite the decline in borrowing costs, the MBAs seasonally adjusted homebuying index fell 6.2% last week. However, reduced buyer interest and increased volatility around the year-end holidays are normal. Meanwhile, the refinancing measure rose 7.4% after adjustments.British Prime Minister Starmer: The number of troops deployed in Ukraine after the ceasefire will be determined according to our military plans.On January 7th, Russ Mould, Investment Director at AJ Bell, stated that the rise in share prices of UK property developers is driven by market hopes that the countrys construction sector has bottomed out. Although the UK S&P Purchasing Managers Index (PMI) rose slightly to 40.1 in December from 39.4 in the previous month, it remained below analysts expectations. However, among the managers surveyed, nearly 40% predicted an increase in output levels by 2026, while 20% predicted a decline. Mould pointed out that property developers share prices started low last year due to a generally pessimistic market outlook on the UK economy, allowing them to benefit from expectations of a rebound, coupled with the possibility of further interest rate cuts. Driven by this news, Barratt Redrows share price rose by 3%, while Persimmon and Taylor Wimpey rose by 2.6% and 2.3% respectively.

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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