Precious metals news

Bloomberg just reported that Treasury Secretary Janet Yellen - who was singlehandedly responsible for stoking and restarting the bank crisis on Wednesday which until that day was easing back, with her comments that nobody in charge was even talking about a uniform deposit insurance, let alone working on one - will convene the heads of top US financial regulators Friday morning for a previously unscheduled meeting of the Financial Stability Oversight Council.

So neither the market nor the Fed has really panicked yet. But they both will, in my opinion. On Friday, Deutsche Bank shares are down about 10% and swaps on the firm are spiking. So where do markets go from here?

The Federal Reserve never died. In fact, The Fed is growing its balance sheet again. Why? A slowing economy and weakness in the banking sector (thanks to inflation and the Fed trying to get inflation back to 2%.

Of course, all this 'good' news hit before the current 'credit-tightening' crisis occurred.

Recent trading around this psychologically significant level is bringing out a volume spike in physical markets.

The Federal Reserve’s digital payments system, which it promises will help speed up the way money moves, will debut in July. They will know who you are, and they can shut you down by limiting anything..

Traders quip that one of the few things to rally during bear periods is volatility. Add gold to the list. Its price has leapt about 7 per cent so far in March to one-year highs of just under $2,000 per ounce. With investors dumping stocks and corporate bonds, money has flowed into both government bonds and gold.

“We avoided the debt crisis a couple of times...but now the game is over," economist Nouriel Roubini said in a new interview.

Elon Musk disagreed with the Fed describing the banking system as “sound and resilient,” tweeting, “banks are melting.”

Markets are signaling the Federal Reserve is wrong when it talks about the prospect for further interest-rate hikes, with bond investor Jeffrey Gundlach among the latest to predict cuts instead as the risk of recession grows.

“When you spread out free money for years at a time, you create significant drag, and I just don’t see how we are going to avoid a slowdown as that whole process comes to an end,”... “I think the Fed screwed up by allowing zero interest rates to go on too long, I think we are just beginning to pay the price for that,” Zell points out. “It would be nice to say that it would be great if the Fed got lucky. I’ve been around for 50 years and I’ve never seen the Fed get lucky.”

Two top former US economic policymakers sharply criticized the Federal Reserve’s 2022 stress tests of banks for failing to have probed potential vulnerabilities in the banking system to a sharp rise in interest rates.

Recession indicators a ringing loudly as the Fed maintains a "hawkish" bias despite the markets not listening.

After tumbling in January (thanks to no big Boeing plan order that juiced December's data), analysts expected a modest rebound (+0.2% MoM) in preliminary February data. However, they were wrong as durable goods orders dropped 1.0% MoM. And it's worse because this happened even after January's 4.5% drop was revised even lower to -5.0% MoM.

"As long as people aren't all coming in at the same time and demanding that their deposits back, you're okay, but that's exactly what's been happening," Prof. Stephan Weiler told Fortune. "So the chances of facing those unrealized losses are going up."

Investors are fleeing to cash in the biggest rush since the onset of the pandemic as concerns of an economic slowdown mount, according to Bank of America Corp. strategists who see equity and credit markets slumping in coming months.

A Federal Reserve facility that gives foreign central banks access to dollar funding was tapped for a record $60 billion, in a week of banking stress that has roiled markets.

Despite quick action by regulators and policy makers, there's a rising risk that banking-system stress will spill over into other sectors and the U.S. economy, "unleashing greater financial and economic damage than we anticipated," said Moody's Investors Service, one of the Big Three credit-ratings firms.Simply put, the risk is that officials "will be unable to curtail the current turmoil without longer-lasting and potentially severe repercussions within and beyond the banking sector," Atsi Sheth, Moody's managing director of credit strategy, and others wrote in a note distributed on Thursday.

Banks reduced their borrowings only slightly from two Federal Reserve backstop facilities in the most recent week, a sign that institutions are taking advantage of the central bank’s liquidity in the wake of turmoil.

U.S. Treasury yields fell on Friday as investors considered what the latest banking sector developments and the Fed’s policy path could mean for the economy.