Pace Of Consumer Price Increases Set To Accelerate – Ep. 204
The Peter Schiff Show Podcast
Peter Schiff
4.6 • 5.9K Ratings
🗓️ 19 October 2016
⏱️ 47 minutes
🧾️ Download transcript
Summary
* The official probability of a December rate hike continues to diminish over the last several days
* The markets had the rate hike at about a 70% probability; now we're down to about 60%
* Personally, I think the odds are closer to zero, and over time, as we get closer and closer to that December meeting, the odds will steadily move down
* Just like the Atlanta Fed keeps moving down its estimates for Q3 GDP; most recently down to 1.9%
* I expect the Atlanta Fed to move lower again this week on more weak economic data
* As the potential for a rate hike diminishes, gold's appeal improving, gold prices now back above $1260 today
* We've had a couple of back to back strong days in the gold sector
* Maybe the catalyst for the recent correction in the price of gold was the renewed expectation of a November and now December rate hike
* As those expectations are realistically dialed back, you'll see more money moving into the metals
* The dollar, though, continues to trade firm
* It's not moving higher, but it's not really surrendering much of its gains
* Maybe some of this has to do with weakness particularly in the pound
* Why is the pound so weak?
* The Bank of England was very forthright, they wasted no time in warning voters not to vote for Brexit as it would be a disaster for the British economy
* Well, sure enough, the people voted for Brexit, and so now, it is a self-fulfilling prophecy
* The central bankers in Britain had convinced themselves that the economy would require stimulus, and therefore announced an increase in their QE program
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Transcript
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| 0:00.0 | The Peter Ship Show. |
| 0:09.7 | Well the probability or the official probability rather of a December rate high continues to |
| 0:15.0 | diminish over the last several days. |
| 0:17.6 | We had been about 70% probability, at least that's what the markets were assessing. |
| 0:22.4 | The odds now were down to about 60%. |
| 0:25.2 | Of course personally I think the odds are much closer to zero and I think that over time |
| 0:30.9 | as we get closer and closer to that December meeting the odds will steadily move down. |
| 0:37.8 | Just like the Atlanta Fed keeps moving down its estimates for Q3 GDP most recently now |
| 0:43.6 | down to 1.9%. |
| 0:45.6 | I think we get another estimate or an update later this week. |
| 0:49.6 | I would again expect the Atlanta Fed to move lower again. |
| 0:53.2 | We've got more weak economic data out thus far this week that I will get to. |
| 0:59.3 | But as the potential for a rate hike is diminishing the appeal of gold is improving. |
| 1:06.8 | Gold prices now back above 1260 I think 1262 and change today. |
| 1:12.9 | We've had a couple of back-to-back strong days in the gold sector. |
| 1:17.6 | Maybe this most recent correction of this upward trend which was basically the catalyst |
| 1:23.4 | for it was the renewed expectation of a November and now December rate hike. |
| 1:28.6 | I think as those expectations are realistically dialed back you're going to see more money |
| 1:33.4 | moving into the metals. |
| 1:35.9 | The dollar though continues to trade firm. |
| 1:39.6 | It's not really moving any higher but it's not really surrendering much of its gains. |
| 1:45.7 | Maybe some of this has to do with some of the weakness. |
... |
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