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The S&P 500 opened 9.13 points higher, or 0.13%, at 6973.92 on Tuesday, February 10; the Nasdaq Composite opened 22.64 points higher, or 0.10%, at 23261.31; and the Dow Jones Industrial Average opened 247.25 points higher, or 0.49%, at 50383.12.February 10th - On February 10th local time, the European Parliament approved the political agreement reached with the European Council on amendments to the European Climate Law, which includes a new, binding EU climate target for 2040. Under the new target, the EU must reduce greenhouse gas emissions by 90% from 1990 levels by 2040, with the aim of achieving climate neutrality by 2050. The amendment still needs approval from the European Council and will then come into effect 20 days after its publication in the Official Journal of the European Union.On February 10th, the Israel Defense Forces (IDF) announced the formation of a new combat division—the 38th Division—the first mobile combat division established by the IDF in decades. This division will be formed by integrating units from the ground forces basic training system, including officer and infantry schools. The IDF stated that it is currently forming a communications battalion and a logistics regiment for the new division. The IDF anticipates that the 38th Division will achieve ground combat capability by 2027. Since the 1970s, the IDF has not established a new mobile division capable of operating deep into enemy territory, only creating new border defense divisions and reorganizing some existing mobile divisions.European Central Bank: Foreign exchange reserves increased by 600 million euros, reaching a total of 332.8 billion euros.On February 10th, China Literature Limited (00772.HK) announced in Hong Kong that it expects to record a loss attributable to equity holders of the Company in fiscal year 2025 of approximately RMB750 million to RMB850 million, compared to a loss attributable to equity holders of the Company in fiscal year 2025 of RMB209 million, primarily due to the goodwill impairment arising from the acquisition of New Classics Media in 2018. The goodwill impairment expense is non-cash in nature and therefore is not expected to affect the Groups cash flow, nor is it included in the Groups non-IFRS financial measurements.

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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