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January 21st - According to foreign media reports, U.S. Commerce Secretary Howard Lutnick stated on Tuesday that he expects U.S. GDP growth to exceed 5% in the first quarter of 2026, but also pointed out that current U.S. interest rates are too high, suppressing stronger economic growth. Speaking at the World Economic Forum in Davos, Switzerland, Lutnick said, "Our interest rates should be lower so that the economy can truly thrive. I think GDP will grow by more than 5% this quarter, which is very significant for a $3 trillion U.S. economy." He added, "If interest rates were lower, growth could even reach 6%. Whats holding us back right now is our own policies." Its worth noting that Lutnicks growth forecast is his personal opinion and higher than U.S. Treasury Secretary Bessants expectation, who stated in Davos that U.S. real GDP growth in 2026 could be between 4% and 5%.On January 21, UBS CEO Sergio Elmoti stated that investors attempting to sell off US assets amid heightened geopolitical uncertainty would be making a "dangerous bet." Speaking at the World Economic Forum in Davos, Switzerland, Elmoti noted, "Diversifying while staying away from the US is unrealistic. The US is the worlds most powerful economy, and I wouldnt bet on it weakening." On Tuesday, US Treasuries and S&P 500 stocks were sold off simultaneously, as investors digested the latest developments in President Trumps push for Greenland, which has strained relations with NATO allies. Meanwhile, Danish pension fund Akademiker Pension plans to exit the US Treasury market by the end of the month. As the worlds largest wealth management institution, UBS has a deep presence in both the US and European markets, managing nearly $7 trillion in assets.Sources familiar with the matter revealed that Germany has lowered its 2026 GDP growth forecast from 1.3% to 1.0%.ECB Governing Council member Nagel: I never imagined I would one day be discussing the threat to the independence of the Federal Reserve.On January 21, ServiceNow announced a three-year partnership agreement with OpenAI to provide AI agents services to enterprise customers using OpenAIs artificial intelligence models. Under the agreement, ServiceNow will integrate GPT-5.2 into its enterprise workflow platform and develop AI voice technology based on the relevant models. Specific financial terms of the agreement were not disclosed.

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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