It’s A FOMC Day!

  • the dollar rebounds on Tuesday…
  • Gold & Silver are subjected to short paper trading again… UGH!

Good Day… And a Wonderful Wednesday to you! Well, I did what I promised I would do yesterday, I went outside and sat in the sun and read my book and soaked up the Vitamin D… And felt so good afterwards, that we went out for dinner last night! Of course, I picked pretty bland food as to not rile up my stomach… The tabloids are all over the refs for their calls in the Chiefs /Bills game on Saturday, C’MON get a grip! NFL games have had bad and questionable calls for as long as the game has been played. I yell at the TV when I see them, but what good does that do?  Dionne Warwick greets me this morning with a song that I could listen to every morning…. Walk On By…. 

Well, the dollar began the day yesterday, down 1 index point in the BBDXY, but recovered during the day, and ended up gaining 1 index point in the BBDXY… Gold started the week down $14, and ended the day down $29, as the calmness in the markets has seemed to melt away… Gold closed yesterday at $2,740, and Silver ran into the same short paper trading ,and ended the day down 47-cents to close at $30.26. 

The price of Oil lost another buck and ended the day trading with a $73 handle…. And the 10-year Treasury didn’t see any buying, like it did on Friday, and ended the day trading with a 4.55% yield. 

In the overnight markets… Well this is what pushed the dollar higher overnight, this from Bloomberg.com: “The dollar strengthened against every major currency after comments from President Donald Trump and his Treasury Secretary stoked concern that a brief respite from tariff talk was well and truly over.

The moves followed a Financial Times report that Scott Bessent, the new head of the Treasury Department, is backing gradual universal tariffs on US imports starting at 2.5%. Trump added to the sense of foreboding with comments that he was considering tariffs on everything from steel and copper to semiconductor chips. He later told reporters that he wants tariffs “much bigger” than 2.5%.”

Chuck Again…  See this is so familiar to the Smoot / Hawley tariffs that preceded the Great Depression… At first the tariffs were supposed to be on agricultural, but after the dolts in Congress got done with them they included all kinds of goods & Services that caused retaliation from th countries around the world, and the next thing you know… The whole globe is having a depression… 

Bessent wants a universal tariff of 2.5%, but Trump wants something that bites, and my guess is he’ll get it…  And then the fun begins…. NOT!

Ok, onto other things… Like I told you previously, a lot of people don’t believe the global tariffs are bad… These are people who either aren’t very old, or failed at history in school… That’s why they are rewarding the dollar when the talk of global tariffs is talked about.  

Gold starts the day today up $6, and Silver is down 10-cents…  Well, today’s FOMC meeting will go a long way toward giving the metals a new direction, and emphasis, etc. It won’t be the end-all, but will be important cog in the machine… 

The price of Oil remained trading with a $73 handle overnight… And the 10-year Treasury bond’s yield ratcheted up again to 4.57% to start our day today… This is really cat and mouse game between the bond boys and the Fed Heads… The Fed Heads want to put a cap on the yield so that it doesn’t get too high, and bond boys want to show that they have control of the bond market, and their wish to is to get the 10-year’s yield to 5%..  the bond boys don’t believe that inflation was defeated nor that it will be defeated with the knuckleheads in the FOMC, and that’s why they want the yield higher… So, the bond boys get the yield of the 10-year going in their direction (UP) and then the Fed Heads step in and do some major buying to bring the yield back down, and once the Fed Heads are finished with their current buying, the bond boys step right back to the plate and begin banging out singles to all fields…. In other words, ratcheting up the yield once again… 

The FOMC meeting this week, actually tomorrow, is a key meeting… Most observers believe that the Fed Heads will keep rates unchanged… But there is always a chance that the Fed Heads will choose to inflate with more conviction, and cut rates…  The Bank of Canada will also meet tomorrow, and I do believe that they will cut rates again, because they chose to be dolts… And that’s what dolts do! 

And then the European Central Bank will meet on Thursday this week. They too have proven to be dolts, and most likely they will cut rates again….   Gold for us is priced in dollars…. But for each country, Gold is priced in that country’s currency.  So, expect the price of Gold to rise VS loonies, and euros this week… 

Speaking of the euro, it’s visit above the 1.05 figure, was brief yesterday… With the dollar rallying yesterday and overnight, oh, I never did get around to telling how much the dollar rallied overnight above did I? Well, the dollar fought back against the currencies overnight by 3 index points (Sunday night) 

The U.S. Data Cupboard yesterday showed that Durable Goods remained negative @ -.1%, as they were unchanged in December…. The Case /Shiller Home Price Index fell in November by -.3%, after posting a 3.3% gain in Rocktober… 

Today’s Data Cupboard has the FOMC Meeting and some data on inventories…. With the FOMC Meeting the main entree…. And that’s it… The FOMC is the Big Kahuna, and nothing can compete with it on FOMC day..

To recap… The dollar rallied yesterday and overnight, was there PPT interference out there once again? Chuck talks about tariffs, and Central Banks meetings this morning, so something to keep you thinking… And he talks about the cat and mouse game the FOMC and bond boys are playing right now with the 10-year Treasury bond…. 

For What It’s Worth…. Americans are falling behind on their debt… I found this article on X (formerly Twitter) and it’s about how car loans are so delinquent…. And it can be found here: The Kobeissi Letter on X: “BREAKING: US subprime auto loan 60+ day delinquency rates jumped to 6.2% in December, the highest among any December on record. Serious delinquency rates have more than doubled over the last 3 years. The surge accelerated once the Fed began raising rates in March 2022. Now, https://t.co/k94AF9xEJ5” / X

Or, here’s your snippet: “US subprime auto loan 60+ day delinquency rates jumped to 6.2% in December, the highest among any December on record.

Serious delinquency rates have more than doubled over the last 3 years.

The surge accelerated once the Fed began raising rates in March 2022.

Now, delinquency rates have exceeded previous peaks recorded in 1997, the aftermath of the 2008 Financial Crisis, and the 2020 pandemic.

According to Experian, subprime financing accounts for 16.9% of all auto loans as of Q3 2024.

Americans are falling behind on their debt.

Chuck Again….OK car loans are of the same magnitude to the economy as Mortgages…. But still cars are how people get to work, to the grocery store, to church, etc. And when their car is taken away because they are so in arrears in payments, how’s is that going to work for Americans?  And Subprime financing? Geez I thought we put that term to bed in 2009… Never to be awakened again…  I guess the folks that created subprime financing in auto loans should really be proud of themselves, eh?  No, I say we string ’em up!  Just kidding… I don’t want to hurt anyone… 

Market Prices 1/28/2025: American Style: A$ .6241, kiwi .5651, C$ .6936, euro 1.0420, sterlig 1.2425, Swiss $1.1037, European Style: rand 18.7012, krone 11.3060, SEK 11.0168, forint 391.66, zloty 4.0288, koruna 24.0794, RUB 98.48, yen 155.33, sing 1.3516, HKD 7.7910, INR 86.59, China 7.2446, peso 20.67, BRL 5.9122, BBDXY 1,302, Dollar Index 107.97, Oil $73.66, 10-year 4.57%, Silver $30.16, Platinum $943.00, Palladium $963.00, Copper $4.25, and Gold… $2,746.34

That’s it for today… I was so glad to get back in the swing of things yesterday… I was beginning to think back about 10 years ago when I was down here, and so sick from my chemo treatments, that i sat curled up in a big chair and slept most of the days… Those were dark times for me, and I’m glad they are a thing in the past! 10-years ago, I was still employed at EverBank World Markets, and it was before they were bought by tiaa a year or so later… And I was told to retire….  OK, enough of that Chuck!  There will be a Happy Hour on the deck today, and the temperature is supposed to be near 80!  YAHOO!  The Outfield takes us to the finish line today with their good 80’s song: Your Love… (my good friend Rick will like that one!) Geez Louise, I almost signed off without wishing my good friend, Chris Gaffney a Happy Birthday! I hope your day is grand today, Chris! I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler