Fed Risks A Repeat of the 1970s

Wondering what's driving down prices of gold and silver?

It looks like the Federal Reserve will be meeting shortly to raise interest rates again as inflation (i.e., Bidenflation) continues to roar on.

According to The Market Oracle (U.K.):

Gold and silver markets drifted lower again this week as investors braced for additional Fed rate hikes to come.

On Wednesday, the Federal Reserve released the minutes from its latest policy meeting. Policymakers agreed on the need for additional increases in interest rates. They settled on just a 0.25% bump up at their last meeting. But some dissenters called for a larger 0.5% hike.

Since the Fed’s last move, incoming economic data is emboldening the hawks. A superficially strong U.S. jobs report combined with stubbornly high inflation readings suggest central bankers have more work to do.

Following the Fed's policy meeting earlier this month, Chairman Jay Powell declared that disinflation was taking hold. But since then, inflation indicators have shown the opposite -- that prices levels in the economy continue to come in high and continue to exceed most forecasts.

Federal Reserve Bank of St. Louis President James Bullard is casting doubt on Powell's call for disinflation to take hold. Bullard says monetary policy is not yet sufficiently restrictive. And in recent remarks, he warned that if the Fed is too soft on inflation, we risk a repeat of the 1970s.

High interest rates is one thing nobody is nostalgic for when it comes to the 1970s. 

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