#federal-reserve

#federal-reserve

The US Treasury's gold reserves have surpassed $1 trillion in value - more than 90 times what's stated on the government's balance sheet - as the precious metal breaks new all-time highs. The world's biggest gold stash passed the milestone after prices rose above $3,824.50 an ounce on Monday, in a 45% rally this year. Its official value, however, based on the $42.22-an-ounce price set by Congress in 1973, is fixed at just over $11 billion.

The Commerce Department reported Friday that its personal consumption expenditures (PCE) price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and most since February. Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, the same as in July. The increases were what forecasters had expected.

U.S. Federal Reserve Chairman Jerome Powell gave a speech in Rhode Island yesterday and, afterwards, was asked whether the Fed was keeping an eye on the markets. His reply contained six words that investors didn't want to hear: "Equity prices are fairly highly valued." The S&P 500 lost 0.55% on the day. Markets in the U.K. and Europe are all down this morning. The picture is mixed: Asia largely had a good day and U.S. futures are marginally up, so it's not a tsunami.

In relatively calm Asian trading, the USD/JPY pair is hovering around 147.95 after retreating to 147.60- a decline that was less surprising than it was a reflection of the intersection between two opposing monetary policy paths in the United States and Japan. On the one hand, the U.S. Federal Reserve, led by Jerome Powell, sent clear signals that the slowdown in the labour market has become a higher priority than persistent inflation, which was reflected in a rate cut last week.

Silver hit fresh record highs on Tuesday, as safe-haven demand and bullish industrial fundamentals continued to support prices. The rally follows last week's 25 bps Federal Reserve rate cut, its first of the year, which prompted markets to fully price in nearly two more reductions by year-end. However, yesterday several Fed officials adopted a cautious tone, warning of persistent inflation and narrowing room for further easing, which could limit silver's bullish run.

President Donald Trump could be close to taking over the Federal Reserve. On September 9, a federal district judge blocked Trump's effort to remove Lisa Cook as a Federal Reserve governor; on Thursday, the administration petitioned the Supreme Court to allow the firing to go through. If the high court ends up siding with the administration, then Trump will have a clear path to filling the central bank with loyalists willing to vote the way he directs them to.

(Mark Schiefelbein/Evan Vucci/AP photos) President Donald Trump has asked the Supreme Court for an emergency order to remove Federal Reserve Governor Lisa Cook from the central bank's leadership in his latest bid to fire her. The move was expected after an appeals court rejected Trump's latest attempt to forcibly remove her from office earlier this week. Cook has been steadfast in her efforts to remain in office, maintaining for weeks that Trump can't fire her without cause.

Markets often rally in anticipation of rate cuts but then decline when the actual rate cuts are implemented. J.P. Morgan's trading desk recently warned that despite stocks setting "more than 20 all-time highs this year," the Federal Reserve's next rate cut "threatens to curb investors' zeal" through a potential "sell the news" drop. The S&P 500 is up almost 33% from its lows in April and is up nearly 13% for 2025.