Fed Rate Cuts: Not Yet But Soon, Depending On Who You Believe

Also: NYSE-listed gold miner breaks out, up 20+%

After hearing Jerome Powell tell us that the Fed would not be cutting  interest rates  but that it was something that would be coming soon – now, we have New York Fed President John Williams this morning on CNBC saying “we’re not really thinking about rate cuts right now.”

A case could be made, I suppose, that Williams is not necessarily contradicting Powell if you emphasize the “right now” and take it to mean not today or sometime in the next 24 hours or so.

That wasn’t the feeling the New York Fed President was communicating, though. If you watch the video or listen to the sound, it’s clear he meant the Fed wasn’t raising rates anytime soon, meaning over the short term, more than likely meaning at least the next 3 months or so. Not what Powell seemed to be signaling.

Now that the 10-Year yield has dropped to below 4%, it will be fascinating to see if it stays there. Bond market participants are happy to see the move but how long can this last given the lack of clarity from Fed leaders. Maybe there’s always a lack of clarity and it’s good for the markets somehow? Keep the investors confused, for now.

The stock market’s leading measures hit new highs, mostly on the strength of rate sensitive sectors such like banks and REITs. It’s odd and clarifying perhaps that the major tech and social media names failed to rally on the news. I’ll be going over this in the weekend Substack post.

Allow me to mention that I’ve been noting the rally in the NYSE-traded gold miner Companias de Buenavista.

Now we can see that it wasn’t all about the possibility of rate cuts leading to inflation – there was more at work:

Nice move, huh? 

Here’s the specific news: Antofagasta Buys 19% of Peru's Compania De Minas Buenaventura - MarketWatch

Here’s my mention of the stock in Forbes on November 27th:

These 3 Gold Stocks Are Outperforming Gold Itself. Fear Hedge. (forbes.com)

And here’s my mention of it…yesterday on Substack:

How about that? 

I’ll have more about the Fed and new charts in this weekend’s Substack post. Stay tuned.

Not investment advice. For educational purposes only.