Fed officials are now floating trial balloons for a rate-hike pause, and the markets are loving it.

This Thursday will bring big news…and likely much more pressure on the Fed to take a break.

October 24, 2022

Dear Fellow Investor,

We’re still in recovery mode from this year’s blockbuster New Orleans Investment Conference.

I’ll have my first take-aways in our November issue of Gold Newsletter, set to be published this Thursday. In the meantime, you can get the impressions of one of our eminent speakers, Dominic Frisby, here.

But here’s why I’m writing you now: There have been some important changes in Fed-speak lately…and there’s more big news coming this Thursday…with it all implying that a major shift in policy is coming sooner than later.

And it all promises to have a huge impact on our investments….

Last Friday seemed to be a momentous day in the ever-shifting world of Fed policy interpretations, with San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans providing new fodder for the tea-leaf readers.

As our friend Peter Boockvar noted this morning, “Now we can see that just maybe a Fed bond put emerged on Friday with the Timiraos article and followed by comments from Evans and Daly amid the sharp selloff in Treasuries. Evans said “Front loading was a good thing. But overshooting is costly too, and there is great uncertainty about how restrictive policy must actually become. So this is going to put a premium on the strategy of getting to a place and a level where policy can plan to rest and evaluate.” Daly said on the prospect of a “step down” from the pace of 75 bps rate hikes, “It should at least be something we’re considering at this point, but the data haven’t been cooperating.”

In response to these hints of a potential pause in the near future, the markets soared across the board. Most importantly for us, gold jumped nearly $30 in price, while silver leaped over 4%.

The metals have calmed down a bit today, with gold off about $6 and silver down about 15¢ as I write, but we can rest assured that any further indications that the Fed may take a break will set them afire.

That may come as soon as this Thursday, with the first estimate of third-quarter GDP. While most will immediately focus on that headline growth number, buried within that report will be the first estimate of the current run-rate for annual interest on the federal debt.

With the last estimate showing a new record high of $648 billion, and that number reflecting just the two Fed rate hikes through the second quarter, I expect the new number to come in at over $750 billion…and perhaps much more.

This should make headlines — and provide more ammunition for those arguing that the Fed has already done enough, and maybe too much.

We’ll know soon. In the meantime, if you’d like to get our November issue of Gold Newsletter, with my first impressions of this year’s amazing New Orleans Investment Conference, CLICK HERE to subscribe now.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference