The Fed Just Raised Their Inflation Target: FOMC Analysis
But they are not going to tell you that
While [the Fed] would never admit a (revealed) preference for higher inflation, it is much easier to feign a total commitment to 2% if the data are at least trending in the right direction. As headline rates bounce, the whole [2% inflation target] charade becomes more difficult to sustain
-Dario Perkins of TS Lombard 19th September
Intro:
There was a lot to digest coming out of Powell’s press conference at 2:30 after the rate decision including: Facts, Observations, and Interpretations.
Below we lay out the reasons for the headline statement: The Fed’s actual inflation target has already moved.
How Did Gold Do?
Before -After
FOMC Recap.
Facts:
Observations:
Interpretations: The Fed Just Raised Their Inflation Target
Further Interpretations
Market Reaction: Chart Summary
Bonus: TD Gold CTA report
Bonus, Bonus: Michael Every
How Did Gold Do?
Gold did just fine. All in all, it weathered a stronger dollar (correlation ignored), Higher yields (another ignored), and soft-ish stocks.
Looking at the behavior blind outside of FOMC context: this is how gold acts going into a debt-ceiling fight or any other situation where US Domestic policies are viewed through a lens credit risk. See for yourself.
