Forward expected inflation remains below the Fed’s target 3% rate, implying Bernanke has leeway to keep his foot on the pedal regarding QE. Fears of him taking away the punch bowl anytime soon are overblown.
Source: Bloomberg
From the looks of the Fed balance sheet, which continues to expand, Bernanke is indeed pressing down hard on the pedal.
We know historically gold has significantly higher returns when real interest rates have been negative, which remains the case today.
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