The U.S. Federal Reserve left the central bank’s key interest rate unchanged at 0.25 percent at their mid-November meeting and vowed to leave rates there for the foreseeable future, Fed Chair Jerome Powell said in a press conference on November.
At their September meeting, the officials indicated rates would remain frozen for at least three years.
Powell said, “The pace of improvement has moderated” and the U.S. economic future is “extraordinarily uncertain” with the country “a long way from our goals” and “halfway there on the labor market recovery at best.”
The Fed has been buying government bonds at a pace of about $120 billion a month recently to keep markets liquid and stimulate demand. The Fed will continue buying at that pace “at least,” Powell said.
The two greatest risks to the economy now are the COVID virus’s unchecked spread and the risk of households burning through any savings they were able to accumulate as a result of federal aid, he noted.
“The fiscal policy actions that have been taken have made a critical difference,” said Powell, but “we’ll have a stronger recovery if we can get some more fiscal support.”
For the Fed’s part in boosting the recovery, the central bank is not “out of power or out of ammo,” he said.
TREND FORECAST: The overt, in-your-face statements calling for more cheap money to be continually pumped into the economy, to us, illustrate the severity of the economic climate. Powell claiming the bank is not “out of ammo,” indicates they, along with Washington, will forfeit the value of the dollar to boost equities and the economy.
Indeed, “ammo” equals ongoing money pumping schemes that will devalue the U.S. dollar and prove bullish for safe-haven assets such as gold and silver.
In addition, as winter sets in and the economy further slows, we forecast the Federal Reserve will lower interest rates into negative territory within the next several months, which will further boost gold and silver prices.
