In a statement released following its two-day FOMC meeting, the Federal Reserve “maintained its massive bond-buying stimulus program at the current level, citing still-high unemployment, a slowdown in the housing market and an economy held back by fiscal policies,” reports the Los Angeles Times. But following the announcement stocks, bonds and gold fell, although Zero Hedge notes that “Gold and silver knee-jerked lower but bounced back somewhat.”
A Reuters article fingers “a slightly less-dovish-than-expected statement” for the drop, quoting a Wells Fargo portfolio strategist as saying that “The Fed was dismissive about how higher mortgage rates are affecting the housing recovery. They also removed the statement about their concerns regarding a deterioration in financial conditions. This sets the stage for an easy start to taper in December.”
The Wall Street Journal reports that “the Fed isn’t taking a December adjustment to the bond-buying program off the table. But that comes with the strong caveat that it depends on whether the economy is living up to its expectations.”
News & Views
Dan Norcini/Barron’s: Tea leaf reading time again; As Fed days go, a snoozer
WSJ/SGT Report/Reuters: Fed balance sheet not seen returning to normal until at least 2019; David Morgan: If Bernanke was a helicopter, Yellen will be the Concorde!; Yellen feared housing bust but did not raise public alarm
Washington’s Blog: Is the dollar really losing its reserve currency status … If so, what will replace it?
Reuters/Bloomberg: Chinese gold prices at a discount on credit crunch fears; Worst cash crunch since June signal of economic rebound
MarketWatch: What will China buy? Beijing goes shopping in the U.S.
Reuters/Gulf News: Gold premiums stay at peak ahead of Indian festivals; UAE gold sellers call on India film stars for Diwali
Bloomberg: Dubai’s DGCX to list spot gold contract as regional demand jumps
The Golden Truth/GATA: The Wall Street Journal published blatant lies about the gold market; Chris Powell: Gold price suppression — why, how, and how long?
BullionVault: Silver use – Changes and outlook
Zero Hedge: Citi warns of “disconcerting disconnects” In U.S. markets; It’s official – U.S. is ‘dirtiest’ dirty shirt in global macro
Bloomberg/Legatum Institute:: U.S. drops out of top 20 in annual economic prosperity index
Reuters/StarTribune: In new U.S. budget talks, Republican proposal has flipped the script; What if the GOP raised taxes and nobody noticed—not even the GOP?