“It will be appropriate to cut rates at such time as inflation is coming down really significantly, and again, we’re talking about a couple years out,” Powell said. “Not a single person on the committee wrote down a rate cut this year, nor do I think it is at all likely to be appropriate. If you think about it, inflation has not really moved down. We’re going to have to keep at it.”

Markets continue their state of flux as experts point in wildly different directions about what all this means for various assets. Crypto is being threatened by governments. Real estate is still looking feeble. The stock market is bipolar. Through it all, precious metals seem to be the only legitimate safe haven, according to many analysts.

Doug Carey, CFA, president and owner of WealthTrace, listed three bullet points about why he’s so bullish on the shiny stuff:

• Inflation: Gold is widely seen as a good hedge against inflation. Carey points out that a rate pause “might signal concerns about economic growth or inflation. This could lead investors to purchase more gold as a hedge against potential inflationary pressures, pushing the gold price up.”
• The strength of the dollar: Gold tends to have an inverse relationship with the dollar. When the dollar is weak — as it is during times of high inflation — gold prices tend to rise. While rates are currently paused between 5% and 5.25%, they’re still well above the Fed’s target of 2%, suggesting gold prices are likely to remain high for some time.
• Opportunity cost: “Higher interest rates increase the opportunity cost of holding non-yielding assets such as gold. If interest rates rise, investors may prefer to invest in interest-bearing assets such as bonds or savings accounts,” Carey says. With a rate pause, however, “gold becomes more attractive, potentially boosting its price as demand increases.”

The latest dot plot revealed that the Fed sees rates climbing by at least 50 basis points this year, but Powell added that these projections are unreliable.

“We write down at these meetings what we think the appropriate terminal rate will be at the end of this year,” he noted. “It’s based on our own individual assessments of what the most likely path of the economy is. It can, in reality, wind up being lower or higher. There’s really no way to know.”

Buy the Dip?

Jonathan Rose, co-founder of Genesis Gold Group, says the real “smart money” is not in trying to time everything out but to play the long game.

“Look, it would behoove me to say everyone needs to grab up precious metals in anticipation of them skyrocketing soon, but that’s not how we look at the investment,” he said. “Do I think we’re in the dip and metals are poised to rise? Yes. But we’re in this for the long haul which means we don’t make decisions based on daily price fluctuations. As I always say, you don’t wait to buy gold. You buy gold and wait.”

Rose, whose company is one of the only unabashedly faith-driven precious metals groups operating in America, has advised precious metals clients for over two decades.

“Especially as it pertains to retirement accounts, people should make their decisions based on the current and future state of the economy as a whole,” Rose continued. “The question shouldn’t be where gold and silver will be tomorrow, next month, or next year. The question should be what the state of affairs will be when Americans need disbursements from their life’s savings. This is why we love self-directed IRAs backed by physical precious metals.”

Skipping the Scams

News like what we’re seeing today can compel investors to act quickly. This has prompted a boom in email campaigns and social media sponsored posts from gold companies. But as Ira Bershatsky, managing member of Advisor Metals, pointed out following the Fed announcement, buyers should beware of scams.

“I got three emails within minutes of Powell making his statements from gold companies offering ‘free’ silver in exchange for buying their precious metals,” Bershatsky said. “One would think that Americans are too savvy to fall for the idea that they get something for ‘free’ if they buy hundreds of thousands of dollars in products, but I keep getting the emails so I guess the scam works.”

Advisor Metals specializes in bullion, offering both discreet deliveries directly to customers through cash purchases as well as rollover and transfer IRA accounts. He does not offer “free” silver.

“I want people to buy from my company just like anyone else would, but I’m not going to insult anyone’s intelligence by trying to convince them they didn’t overpay dramatically in order to qualify for their ‘free’ silver,” Bershatsky continued. “It makes more sense to me to just be honest and work with clients respectfully.”

The Smart Money

There has never been a time in modern history when most economists were completely bearish on gold and silver. It usually comes down to a question of what percentage investors should dedicate to precious metals.

“I think gold is worth investing in always as a part of a very well-diversified portfolio as I believe in the power of evidence-based investing,” said Dana Menard, CFP, founder and lead financial planner at Twin Cities Wealth Strategies.

Investment advice is almost always tainted by the incentives of the advisor. With the Biden-Harris regime pushing so hard for ESG investments in retirement accounts, the most common conclusion Americans are coming to is that they need to take more control over the direction of their portfolios. And as such, many are turning to precious metals as a safe haven during these tumultuous times.

Several top policymakers have publicly spoken in favor of returning to the hawkish policy of the previous year at the next meeting in June, reported Fox Business.

However, the central bank has come under increasing fire for raising recession risks by aggressively boosting interest rates, which has caused worries on Wall Street regarding a deep recession.

Many top CEOs and economists have criticized the Fed’s decision making in recent weeks and for not acting early enough when price pressures were still building.

The Fed raised the borrowing rate for the tenth consecutive time to 5 to 5.25 percent in May, the highest since 2007. Still, inflation unexpectedly jumped 0.4 percent to 4.9 percent in April after months of declines.

The U.S. inflation rate is more than twice the Fed’s 2 percent target but well below the peak of 9.1 percent in June 2022. The labor market also remains tight, with unemployment falling to 3.4 percent last month, the lowest rate since 1969.

After prematurely stating that inflation was getting under control earlier this year, Fed policymakers have warned that inflation was still too high for a pause in the central bank’s tightening campaign, despite pleas from some economists to take a wait-and-see approach.

Despite the recent declines in inflation, some central bank officials say that another hike is increasingly likely.

“I think we’re going to have to grind higher with the policy rate in order to put enough downward pressure on inflation and to return inflation to target in a timely manner,” St. Louis Federal Reserve President James Bullard said in a Monday speech delivered to the American Gas Association in Florida.

“I’m thinking two more moves this year—exactly where those would be this year I don’t know—but I’ve often advocated sooner rather than later.”

Dallas Fed President Lorie Logan agreed that inflation was “much too high” and not cooling quickly enough to justify a pause in interest rate hikes at the Fed monetary policy meeting in June.

“After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress,” she said in remarks prepared for delivery to the Texas Bankers Association in San Antonio.

“The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet.”

Minneapolis Fed President on the Fence

Minneapolis Fed President Neel Kashkari, a member of the Federal Open Market Committee, told CNBC on May 23 that although he is open to pausing interest rates at the next policy meeting, he is still open to a rate hike.

He stated that would not take future rate hikes off the table, even if officials choose to pause the increases next month.

“I think right now it’s a close call, either way, versus raising another time in June or skipping,” he said during the interview with CNBC.

“What’s important to me is not signaling that we’re done,” he said, adding, “if we were to skip in June, that does not mean we’re done with our tightening cycle; it means to me we’re getting more information. Do we then start raising again in July, potentially?”

“The cost of not getting inflation down to 2 percent is much higher to Main Street than the cost of getting it down to 2 percent,” Kashkari continued.

“So I would rather err on being a little bit more hawkish rather than regretting it and having been too dovish.”

However, he said he was sensitive to the delayed impact of the Fed’s rapid rate increases and a potential credit crunch due to the ongoing banking crisis, which began in March.

These latest comments from top Fed officials have raised the probability of an 11th rate hike in June, even though investors have bet on the Fed taking a break from raising rates for that month. However, the probability that the Fed will raise rates in June rose to 26.8 percent yesterday, up from 17.4 percent the previous week, according to data from CME Group’s FedWatch.

Powell Faces Critics

Meanwhile, Fed Chairman Jerome Powell told the Perspectives on Monetary Policy panel at the Thomas Laubach Research Conference on May 19 that the Fed funds rate may not need “to rise as much” to achieve its inflation goals but agreed that prices were still too high.

After the last meeting in early May, Powell said that the Fed may decide not to raise rates so to better study the effects of the rapid increases.

“A decision on a pause was not made today,” said Powell, reiterated that the Fed’s future policy decisions would “be driven by incoming data, meeting to meeting.”

Powell said that the tightening of credit standards after the recent bank failures could weigh on economic growth, hiring, and inflation but that the Fed’s financial stability tools can calm any volatility in the banking system.

Powell said that “overall the banks and the banking system are strong and resilient,” but acknowledged that the disruption to the financial sector from the series of bank runs could impact the central bank’s policy decisions. The chairman has been repeatedly attacked for misjudging the rise in inflation as “transitory” in 2021.

He was then forced to go on the aggressive interest rate hike spree within months of such a stance, as consumer prices rose at the fastest pace since the early 1980s.

Musk Weighs In

“My concern with the way that the Federal Reserve is making decisions is that they are just operating with too much latency,” Twitter CEO Elon Musk and a major critic of Powell, told CNBC on May 23.

“Basically, the data is somewhat stale, so the Fed was slow to raise interest rates. And now I think they’re going to be slow to lower them.”

Musk called the Fed’s rate hikes a ‘brake pedal’ on the economy that is making things too expensive for those using credit, which will have “downstream effects” on the economy.

Mohamed El-Erian, chief economic adviser at Allianz, told Bloomberg on May 23 that “we are still in the hospital because there are problems with the banking model of certain banks.”

El-Erian is concerned over the situation faced by regional American banks and is opposed to pushing ahead with another strong rate hike too quickly, which will hit businesses tied to the commercial real estate industry.

“The key issue now is to allow the patients that are in the hospital to come out. If there’s another [Fed] policy mistake, the patient goes back into the ICU,” he added.

Article cross-posted from our premium news partners at The Epoch Times.

The rate hike brings the Fed’s target rate within a range of 5% and 5.25%, with the Fed continuing its series of rate increases. Most economists anticipated a quarter point interest rate hike in an effort to bring inflation down, but many expect this will be the last rate increase in the series.

As of Wednesday morning, markets were predicting almost 100% odds that the Fed would hike rates by a quarter-point, according to CNBC. With the latest rate increase, the Fed funds rate is now at its highest level since 2007, prior to the 2008 financial crisis.

“What’s most important is how they convey the potential for a pause going forward,” Collin Martin, fixed income strategist at Charles Schwab, told CNBC. “How do they do that while also probably leaving the door open a little bit? That will be a balancing act between suggesting a pause is in the cards but still is dependent on incoming data should inflation turn higher going forward.”

There is a conflict in goals at the Fed because reducing inflation through interest rate hikes contributes to banking sector turmoil, Peter St. Onge, research fellow in economics at the Heritage Foundation previously told the Daily Caller News Foundation.

“Higher rates put more stress on banks,” he said. But lower rates enable inflation to persist and can signal distress.

“I think the general expectation is that the Fed will raise their interest rate target range by 0.25 percent but that they will signal a pause in rate hikes thereafter,” Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Committee on Banking, Housing and Urban Affairs, told the DCNF.

“Following the recent failures of Signature Bank and Silicon Valley Bank (SVB), many speculated that the Fed might cut rates,” he added. “Instead, they chose to continue their rate increases.”

The U.S. economy slowed more than expected to 1.1% in the first quarter of 2023, according to the Bureau of Economic Analysis (BEA). Low GDP, high inflation and rising interest rates added to concerns about the possibility of an upcoming recession, according to The Wall Street Journal.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Thus, raising interest rates by 0.75% isn’t going to halt inflation. Prices of food, fuel and consumer goods are going to continue to rise dramatically in the months ahead.

The rate raise, however, will cause sharp drops in the housing market, since housing is strongly dependent on mortgage loans which are highly sensitive to interest rates. Because home loans are often 30-year loans, even a small increase in loan rates can result in dramatic increases in monthly payments, pricing many people out of the homes they could afford just six months ago. The net effect will be falling home sales and decreasing values of real estate, combined with large increases in mortgage defaults.

Foreclosure starts are now up 440% year over year

According to DSnews.com’s reporting on the Black Knight Mortgage Monitor Report, us foreclosure “starts” (i.e. new foreclosures) have risen 440% from last year (June 2022 vs June 2021). July numbers aren’t yet reported, but it is near certain they will also show large increases in foreclosures.

Retail auto sales are down slightly, although much of that may be attributable to lack of supply rather than reduced demand. However, as interest rates rise, people are increasingly priced out of the automobiles they wish to purchase. As the UK Daily Mail reports, a shocking number of Americans are now paying $1,000 a month on a car loan payment:

• The percentage of people taking out new car loans and paying $1,000 in monthly payments has almost doubled from 7% to 12.7% over the last 12 months
• Average monthly payments on new car loans are at a record high of $686
• Used car market sees average monthly payments at $554, up 12% year-on-year
• Pandemic supply-chain problems are partly to blame with the shortage of new cars leading to price hikes on the forecourt
• Monthly interest payments also shot up after the Federal Reserve raised rates

Gold and silver will likely drop a bit more as people unload assets to meet margin calls in the stock market, but in the long run, precious metals look poised to skyrocket as the dollar’s real world value plunges and inflation spirals out of control.

The Fed will likely soon stop raising rates and will start lowering them, indicating a total surrender to inflation and the eventual collapse of the fiat currency

It seems likely that this will be the last rate raise of 2022, or potentially the second to last. The Fed is already indicating they plan to start lowering rates in 2023, and many financial analysts believe the Fed will almost certainly accelerate that action to late 2022 as the economic carnage in the real estate industry becomes too messy to ignore.

Ultimately, the Fed will capitulate and abandon any real goal of tackling inflation. They will keep printing money and lowering interest rates while inflation spirals out of control, leading to an end game scenario where food and fuel prices lead to nationwide riots while the dollar collapses in real world value.

On top of this, China, Russia, India and other BRICS nations are rolling out a new global reserve currency that will make the petro dollar obsolete, immediately making global dollar dominance a thing of the past. This will cause dollars to come flooding back to America as other nations dump the hyperinflated dollar and embrace the commodities-backed, gold-backed, energy-backed BRICS reserve currency. Before long, America will be a collapsed Third World nation with mass homelessness, starvation, destitution and lawlessness, with a collapsing fiat currency, a corrupt illegitimate government regime and a captured corporate media that now sees its only job as covering up the crimes of the regime in power… the same regime that holds political prisoners in jail without due process, runs depopulation vaccine propaganda campaigns and purges the military of Christians and patriots so they can unleash the military against We the People in a domestic genocidal war. (That’s what is coming if we don’t change course…)

This is when you will thank God for the preparedness activities that you pursued in advance.

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