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April 1st - U.S. stocks closed higher on Tuesday. The Dow Jones Industrial Average rose 2.48%, the S&P 500 gained 2.9%, and the Nasdaq Composite climbed 3.8%. Nvidia (NVDA.O) surged over 5%, Pinduoduo (PDD.O) climbed 3.8%, Intel (INTC.O) rose 7%, and Tesla (TSLA.O) gained over 4%. The Nasdaq China Golden Dragon Index closed up 2.7%, with NIO (NIO.N) rising 9% and Baidu (BIDU.O) gaining over 4%.On April 1st, oil prices fell as Iran and the United States expressed their willingness to seek a solution to the conflict that has disrupted global energy transport, partially eliminating a long-standing price risk premium in the market. According to a statement from the Iranian presidents office cited by Euronews, the Iranian president stated that Iran is willing to end the war if its demands are met. This comes after the Wall Street Journal reported that Trump told aides he was willing to end the war without reopening the Strait of Hormuz. However, traders remain concerned that the impending solution will not eliminate the numerous disruptions already existing in the global energy system. Shaya Hosseinzadeh, chief investment officer at OnyxPoint Global Management, stated, "Even if this conflict were resolved tomorrow, it would take weeks or even months to restore oil supplies. And price signals do not fully reflect the reality."April 1 – The White House stated on Tuesday that the U.S. military is prepared to thwart any attack by Iran in response to threats made by Irans Islamic Revolutionary Guard Corps (IRGC) against U.S. businesses in the Middle East. "The U.S. military has always been and is prepared to deter any attack from Iran, as evidenced by the 90% decrease in the regimes ballistic missile and drone strikes," a White House official said. The IRGC reportedly announced earlier on Tuesday that it would begin operations targeting U.S. businesses in the region starting April 1 in retaliation for attacks against Iran.Hang Seng Index futures closed up 1.76% at 25,191 points in overnight trading, a premium of 403 points.Federal Reserve Governor Barr and Federal Reserve Governor Bowman will speak in ten minutes.

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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