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On Wednesday, the Fed’s Beige Book report was released. What is the Beige Book? It is a report that the FED publishes eight times per year and is an anecdotal report of economic conditions in the Federal Reserve 12 districts. It is compiled from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources.
This most recent report indicated a slowing economy with small price increases. Slowing economy? Price increases? Jimmy Carter stagflation is back! This could be why the FED lowered interest rates by one half a percentage point at their last Federal Open Market Committee (FOMC) meeting.
The equity indices, gold, and silver were all on their lows of the day when the report was released and within a few minutes each of them rallied off of their lows indicating that the FED could possibly cut interest rates again at their November meeting. The markets like lower interest rates.
On Thursday, the S+P Flash Purchasing Manager’s Index (PMI) for October was released showing a slowing economy and moderating prices. Stocks were mixed on the news and gold and silver rallied and the price rally has continued into this morning.
Buy metals on the dip or on the momentum.
Until next time…
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