Inflation pressure is easing in some corner markets, which is causing some to question if it has reached its peak. However, experts say the jury is still out. Price pressures could be transitory, but there are still worries that inflation could be making a more permanent comeback after staying muted for decades. On Wednesday afternoon, the Fed is set to make a statement regarding inflation after a two-day policy meeting. Officials are expected to indicate that they are at least thinking about how to move away from the super-supportive policies they put in place during the pandemic, which have flooded the U.S. economy with cash. Eventually, the Fed is going to have to decide if inflation is “transitory,” as it has so stoutly insisted, or if steps should be taken to reign it in. However, they could also just try to muddle on through. You can read more about our thoughts on that, here.
CNN Business/Julia Horowitz
Has inflation peaked? The jury is still out
Signs of rising inflation around the world are keeping investors on edge. But in some corners of markets, pressure is easing, raising hopes that Peak Fear may have passed and central banks will be confident enough to sit tight.
What’s happening: The price of lumber, fed by a construction boom, has dropped 40% from the all-time high it reached in early May, while copper prices have fallen back 11%. Corn prices are 14% lower.
Long-term bets on commodities just overtook bullish bets on bitcoin as the most crowded trade in markets, according to Bank of America’s latest survey of global fund managers. That could be a sign that the commodities surge, which is causing prices to rise, may have run its course.
Broader economic data closely monitored by policymakers is telling a different story, however.
US producer prices jumped a record amount last month, increasing 6.6% between May 2020 and May 2021, according to figures released Tuesday. In the United Kingdom, consumer prices leaped 2.1% in the year to May, the Office for National Statistics said Wednesday, with clothing, dining out and fuel getting more expensive.
This jump above the Bank of England’s 2% inflation target wasn’t expected until later this year, according to its May monetary policy report.
You can read the full story, here.
Kitco News/Todd ‘Bubba’ Horwitz
What will today’s FED decision mean for gold and silver
Today appears to be the day that markets have been waiting for, the FED announces their decision on interest rates. Trading this week has been a nightmare with the overwhelming indecision of what the FED will do.
There are many questions to be answered. Will the FED talk about tapering? Will the FED finally admit to inflation? Will the FED maintain its standard of ignorance and pretend that everything is okay?
The answers are clear; we expect no change and the same policies to continue. Gold and Silver have been struggling for the past few weeks, with Gold testing the bottom end of the recent range. All this is based on inflation and the FED decision.
We remain long understanding that although trading has been tough, the trend for both is higher. We know that our signals can change, and we could have to reverse but expect the uptrend to continue.
This is where you must make the decision: are you trading or investing. If trading, your time horizon is much shorter and you can be on either side of metals. Investing is building and accumulating. The two should never be mixed.
Patience, discipline, and money management always win the day.
Read the full story, here.
Yahoo Finance/Brian Sozzi
Bitcoin is still a bubble despite price crash: BofA survey
Fund managers aren’t sold that bitcoin (BTC-USD) is a screaming buy after the cryptocurrency’s rout.
Eighty-one percent of fund managers polled in a new Bank of America survey say bitcoin is still a bubble despite the steep price pullback. Investors view bitcoin as the second most crowded traded (investors love bitcoin perhaps too much) behind being long commodities.
A total of 224 fund managers with $667 billion in assets under management participated in the survey.
To be sure, bitcoin prices have had a rough go of it lately as investors seemingly fixate on every bearish tweet from crypto influencer Tesla CEO Elon Musk.
Bitcoin prices plunged roughly 37% in May, and are down 38% from their mid-April peak of $64,829.
Continue reading, here.