Sirwin
Sirwin
FED holds rates for fourth consecutive month.

FED Holds Rates Fourth Consecutive Month (+ Other News)


This week has been a busy one indeed. On Wednesday, the Federal Reserve Bank concluded its first policy setting FOMC meeting of the year. The markets expected neither a rate cut or hike and that's what they got. The FED has decided to remain neutral for the fourth consecutive month, holding the federal funds rate at 5.25% to 5.5%. Previous language suggesting further rate hikes have been removed but no new language was added to suggest any rate cuts were on the way while they stated that inflation was still high. In the previous week, the Bank of Canada, Bank of England and European Central bank have also remained neutral.

Markets had been pricing in a rate cut for March but that idea was quashed after a payrolls beat earlier this week and yesterday's job report showed stellar numbers with 353K new jobs. Closer inspection though, reveals that the BLS (Bureau of Labor and Statistics) revised the number of hours worked per week from 34.3 to 34.1 hours while many of the new jobs were part time or temporary / seasonal. There's more to this 'Jobs' story here.

Yes, the employment landscape is doing quite well. Amazon announced a massive layoff of more than 18,000 workers. UPS is axing 12,000 of its workforce as announced just a couple of days ago, after ratifying their labor contract just last summer in which employees got massive  raises (That didn't last long!). Microsoft let go some 1,800 people in its gaming division and some 8,000 in total in the gaming sector have lost their jobs. Mass Media layoffs continue with the L.A. Times slashing jobs while another, 'The Messenger' news site went abruptly silent.The global banking sector lost about 60,000 jobs in 2023 and the layoffs continue. 

Speaking of banks, the commercial real estate (CRE) collapse is having a profound impact on smaller banks which have more than 25% exposure to CRE and the impact has now sailed across the pond. Japan's Aozora Bank has posted its first net loss in 15 years and its stock lost some 20% value in just one day after the bank announced a loss of 28 Billion Yen ($190.5M) compared to previous estimates of 24 Billion Yen profit. CRE is in such a bad state that Business Insider is stating that the sector is facing $1 Trillion in losses. Imagine how that will impact the banks!

In the U.S.A., the southern border crisis has hit a critical point with truckers, some say numbering about 700,000 have begun amassing along the southern border, called the 'Take Back Our Border' convoy to demand a secure border. Biden's open borders policy is an utter failure which has amounted to an outright invasion. It is believed that about 8 million people have snuck through the porous southern borders since Joe Biden took office, many of whom are terrorists, gang members and enemy inflitrators. With this many trucks headed to the border, we can expect shipping to be seriously disrupted.

Similar events are happening in Belgium, France, Germany and the Netherlands with farmers blocking borders and highways, protesting surcharges on diesel fuel and proposed restrictions related to bogus carbon emissions which is itself tied in to the climate change hysteria. Climate Change used to be called 'the weather'. It hasn't gotten better or worse but is being used against us to impose ever more restrictions. An awful piece by Bloomberg has the headline, 'We need an inoculation against climate deniers'. This is why we're seeing the death of mainstream media happening right before our eyes. They won't allow us to have any debate whatsoever.

Then, there's the prospect of global war. The Israel / Hamas conflict shows no signs of slowing down. The Pentagon just struck Iraq and Syria, pounding at least 85 targets. The biggest shippers are now refusing to sail in the Red Sea, where Houthis from Yemen have been firing missiles, in response to Israel's ongoing genocide in Palestine. I think it's just a matter of time before the Islamic world responds with affirmative action. Honestly, I'm surprised they haven't already. Protests have erupted around the world in a show of support for Palestine, most recently with a blockade of trucking route into the Port of Vancouver.

Borders and trade routes are being blocked by truckers, tractors, protesters and highly militarized groups around the world. Obviously, this will have a detrimental impact on the movement of goods, including food products. This should be taken as a warning to stock up, just in case.

On a lighter note, Oil (WTI) is back down in the low $72 range and Bitcoin is back above $43,000 while gold continues to hold at or near $2,040 in spite of the fact the USD soared a full point yesterday from 103 to 104 after the 'fake' jobs report was released yesterday.

Spot Gold - February 2, 2024

As I've stated a few times now, I believe gold has a new bottom at or near $2,040. In fact, gold closed yesterday for the weekend at $2,039.70! The chart above from Friday afternoon looks massive but is really only a $20 move, a drop in the bucket for gold. Alasdair McLeod of McLeod Finance and regular contributor at KingWorldNews, sent me a personal reply after commenting on one of his posts. See below what he had to say.

Alasdair McLeod Finance  - X Tweet

I further replied by stating, 'Make that $41T. Add another trillion just for interest expenses'. Imagine that! There's no way gold will stay at $2,040. It's gonna go up. WAY UP! Along with silver, Bitcoin and food stuffs! For now, oil is down a bit but with tensions continuing to rise in the middle east, expect prices to eventually rise if things don't cool off over there real soon.

In other news...

Cocoa prices hit 40+ year high!

Iraq once again wants to ditch the dollar in oil trade.

Tesla to vote on moving to Texas.

Peace and love to everyone! 

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SweptOverNiagara
SweptOverNiagara

Name's Joe and I live in Ontario, Canada. I like writing on a wide variety of topics. I enjoy keeping track of markets, investing and commodities and the crypto sector. Also do some coding for web browsers.


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