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April 2nd - According to Toshitaka Sekine, former chief economist of the Bank of Japan, the war with Iran is increasing the risk of inflation, providing strong evidence that the Bank of Japan could raise interest rates as early as this month. In an interview on Wednesday, Sekine stated, "If the intention is to assess the situation, I think action in April is feasible. By the end of April, we will at least know whether the subsequent impact of the Middle East situation is just a flash in the pan." Although experts are still debating whether the geopolitical shock to resource-poor Japan is inflationary or deflationary, Sekines comments suggest that the Bank of Japan may have a stronger conviction about the necessity of raising interest rates when it formulates its policy on April 28th. Sekine, who has served at the Bank of Japan for over 30 years, speculates that central bank officials may share his views, as the minutes of the March policy meeting clearly showed that committee members were increasingly concerned about inflation risks.April 2 - According to the Japan Meteorological Agency, a 4.8-magnitude earthquake struck off the coast of Miyagi Prefecture, Japan, at approximately 9:52 a.m. local time on April 2. The maximum intensity of the tremor was 3, and the focal depth was 50 kilometers.According to Al Jazeera: In his speech, U.S. President Trump said that war with Iran is an investment in the future of American children.On Thursday, April 2, the Hang Seng Index opened down 39.54 points, or 0.16%, at 25,254.49; the Hang Seng Tech Index opened down 23.5 points, or 0.49%, at 4,732.95; the H-share Index opened down 27.46 points, or 0.32%, at 8,477.35; and the Red Chip Index opened down 5.22 points, or 0.12%, at 4,171.17.Hong Kong stocks opened lower, with the Hang Seng Index down 0.16% and the Tech Index down 0.49%. New Oriental (09901.HK) fell about 2%, and Alibaba (09988.HK) fell about 1%.

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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