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On June 29th, Kiwibank Chief Economist Jarrod Kerr stated that despite the renewed conflict in the Middle East over the weekend, the New Zealand market generally believes a peace agreement is highly likely. With oil prices falling to pre-war levels, demand appears poised for a rebound. He added that while the New Zealand economy has been hit, it has not completely collapsed. The oil crisis has slowed the pace of economic recovery, enough to damage demand, but it has not completely derailed economic activity. Kerr pointed out that the Reserve Bank of New Zealand has strong reasons to maintain interest rates at its July policy meeting.June 29th, Futures News: With the impact of geopolitical conflicts waning and crude oil gradually returning to a normal supply and demand balance, oil prices have continued to decline. Fuel oil cost transmission has dampened market confidence, leading to cautious and low-level procurement, and a growing bearish sentiment in the market. From a supply and demand perspective, concentrated maintenance shutdowns at local refineries have reshaped the short-term supply and demand pattern for fuel oil. After mixed price movements, most products are in oversupply, offering little support for price increases. While refinery deep processing has seen some recovery, it remains unprofitable, negatively impacting downstream processing activity. Based on these multiple factors, fuel oil trading is expected to be more likely to decline this week, with prices remaining in a downward trend.The Hang Seng Index rose more than 1% in early trading, with Baidu (09888.HK) leading the gains among constituent stocks, rising over 6%. The Hang Seng Tech Index is currently up 2.88%.On June 29th, the highest 7-day annualized yield of Tencent Wealth Managements "Current Account +" was 1.4260%, and the lowest was 0.7270%. The highest 7-day annualized yield of WeChat Pays "Lingqian Tong" was 1.0280%, and the lowest was 1.0050%. The highest 7-day annualized yield of Alipays "Yuebao" was 1.0350%, and the lowest was 1.0050%.The Hang Seng Tech Index rose rapidly to 2% in early trading, with Horizon Robotics (09660.HK) leading the gains among its constituent stocks.

The Devil Is In The Details: Gold Analysis - Federal Reserve Minutes

Larissa Barlow

Apr 07, 2022 10:33

Analyses of Federal Reserve Minutes 

While both the FOMC statement and Chairman Powell's press conference provide market participants with information about the FOMC's updated and revised monetary policy, it is the release of the minutes that provides investors with significantly greater clarity and understanding. The devil, as they say, is in the details.

 

The Federal Reserve issued the official minutes from its March FOMC meeting today, providing insight into the central bank's current plans to begin unwinding its balance sheet assets. Beginning in March 2020, the Federal Reserve will add around $4.6 trillion to its balance sheet by purchasing $120 billion monthly in mortgage-backed securities ($40 billion) and US Treasury securities ($80 billion), bringing their total to just over $9 trillion.

 

According to Federal Reserve Governor Lael Brainard, the Fed intends to employ a mix of interest rate rises and a quick run-off of the balance sheet to bring US monetary policy closer to neutral later this year.

 

However, the minutes released today imply that the Federal Reserve will unwind around $3 trillion over the next three years, reducing its $9 trillion balance sheet to $6 trillion. While the Fed appears to be indicating a quick runoff of its balance sheet, the reality is that the Federal Reserve's balance sheet will be nearly $2 trillion larger than it was prior to the epidemic.

 

"Participants continued their discussion on plans to reduce the size of the Federal Reserve's balance sheet in a manner consistent with the methodology outlined in the Committee's Principles for Reducing the Size of the Federal Reserve's Balance Sheet, announced following its January meeting."

 

Additionally, the minutes stated, "While no decision was made regarding the Committee's plan to reduce the Federal Reserve's balance sheet at this meeting, participants agreed that significant progress had been made on the plan and that the Committee was well positioned to begin the process of reducing the balance sheet's size as soon as after the conclusion of its upcoming May meeting."


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