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INEOS says the EU’s first full-scale carbon storage project will be operational.Germanys August PPI month-on-month rate and the UKs August seasonally adjusted retail sales month-on-month rate will be released in ten minutes.European Central Bank Vice President Vujicic: High inflation in the fall will drag down the economy.The main palladium futures contract rose 2.00% intraday, currently trading at 310.20 yuan/gram.On September 18th, European Central Bank Vice President Aleksandar Vujic stated that market bets on further interest rate hikes by the ECB are primarily driven by rising energy prices, but policymakers will consider broader economic indicators when deciding on their next move. He said, "The pricing of the interest rate path is mainly driven by rising energy prices. I want to emphasize that we do not look solely at energy prices when making monetary policy decisions, but rather at a wider range of data and standards. Focusing solely on energy prices is not advisable, no matter how important they may be. If inflation remains high throughout the autumn and affects household income and consumption behavior, it will also have a dampening effect on GDP. We will observe the situation over the next few months and adjust policy accordingly." Global bond yields have risen to their highest levels since before the financial crisis due to rising inflation and interest rate expectations, as well as the huge borrowing needs of governments and technology companies. Vujic said these trends do not pose a threat to financial stability because eurozone banks are well-capitalized and have ample liquidity.

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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