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Thread: Fed Data Dependence: The NeverEnding Story - Bubba Horwitz

  1. #1

    Default Fed Data Dependence: The NeverEnding Story - Bubba Horwitz

    The latest Fed minutes continue to dominate markets, with gold paring initial losses. However, the yellow metal is struggling to take off as the Fed continues to be ‘data dependent’ and has left a possible 2016 rate hike on the table. According to long-time strategist Todd ‘Bubba’ Horowitz, the FOMC may have had ulterior motives with the committee’s latest minutes. ‘What I really think they’re doing, they’re trying to slow down the stock market a little bit. They’re afraid of the bubble they’re creating,’ he told Kitco News Thursday. However, he continued, investors aren’t buying it. “The market thinks the Fed is full of it.” Although he expects continued accommodative policy by the Fed, Bubba said he doesn’t see gold prices taking off just yet. ‘I think gold’s going to kind of vacillate here, you got a pretty good ceiling at about $1,380-1,400 and a floor at $1,340.’


  2. #2

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    That is exactly what the Fed did in 1929....hiked rates to slow a stock market bubble exactly when the economy did not need tightening. The end result kicked off the great depression which was written about extensively in A Monetary History and further supported by various research by Bernanke. So I suspect this "ulterior motive of the Fed" does not really exist as described by Horowitz. This is the exact reason why the Fed is data driven in the first place!! No way the Fed hikes rates to stop a stock market bubble if the data says the economy isn't ready for it.
    Last edited by Ryanferr; 08-18-2016 at 03:57 PM.
    The answers are in the data

  3. #3

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    Quote Originally Posted by Ryanferr View Post
    That is exactly what the Fed did in 1929....hiked rates to slow a stock market bubble exactly when the economy did not need tightening. The end result kicked off the great depression which was written about extensively in A Monetary History and further supported by various research by Bernanke. So I suspect this "ulterior motive of the Fed" does not really exist as described by Horowitz. This is the exact reason why the Fed is data driven in the first place!! No way the Fed hikes rates to stop a stock market bubble if the data says the economy isn't ready for it.
    in principle markets are NEVER ripe for ratehikes, whatever the economic situation might be. IMO the sooner they get to 5 or 6 pct the better, otherwise money will soon fall to dust.

    Golditiki2+++

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