_{ECONOMIC NEWS}

Senior Federal Reserve Official Signals Possibility of Extended Period of High Interest Rates

Federal Reserve Vice Chair Philip Jefferson indicated that the central bank's key interest rate might need to remain elevated for an extended period to address persistent inflation. In a recent speech, Jefferson highlighted an expectation for inflation to decrease this year but notably did not mention the previously anticipated rate cuts. Instead, he suggested that maintaining the current rate level could be necessary if inflation remains higher than expected. This marks a shift from his February speech, where he hinted at possible rate cuts if inflation continued to slow. The change in tone aligns with recent data showing strong economic activity and consumer spending, which may keep inflation pressures alive. Jefferson's comments suggest that the Fed might revise its earlier forecast of implementing three quarter-point rate cuts this year, with the next update on the Fed's preferred inflation gauge due soon. Read More.

_{FINANCIAL FOCUS}

Central Banks Purchasing Peak Gold Prices

Despite the prevailing investment wisdom of "buy low, sell high," central banks, particularly those led by China, are actively purchasing gold at its near-historic highs. Over the last 17 months, the People’s Bank of China has consistently added to its gold reserves, often underreporting its actual buying volumes. This aggressive accumulation is part of a broader strategy to de-dollarize and protect against global financial instability. Russia and smaller nations like Zimbabwe are also increasing their gold reserves and introducing new financial systems, such as the gold-backed currency in Zimbabwe, to lessen their dependence on the US dollar.

The trend of buying gold is fueled further by expectations of rate cuts by Western central banks amidst ongoing geopolitical conflicts, which has helped sustain high gold prices. Additionally, factors like uncontained inflation and the anticipated continued devaluation of the dollar suggest that gold prices may climb even higher.

Prominent financial commentators suggest that this is a strategic move by countries anticipating the decline of the dollar and the potential rise of new economic powers. They argue that in the long term, as fiat currencies tend to devalue to zero, the relative cost of gold today is less relevant if the future sees the dollar or other fiat currencies collapse entirely. This perspective views gold not just as a safe haven in times of economic uncertainty, but as a crucial hedge against the potential terminal decline of fiat money systems. Read Now.