๐ฟ๐๐๐ง ๐๐ค๐ฅ๐๐๐ง๐จ ๐๐ฃ๐ ๐๐ค๐ก๐ก๐ค๐ฌ๐๐ง๐จ, ๐ฌ๐๐ก๐๐ค๐ข๐ ๐๐๐๐ .
Today, we delve into the current U.S. economic strategy and Federal Reserve policies, analyzing key indicators such as growth, inflation, and the labor market.
With the "Three Arrows" plan, the Trump administration aims to strengthen the economy through sustainable growth and controlled bond yields, while the Fed maintains a cautious approach regarding interest rate adjustments.
What are the implications for financial markets and investors?
Let's find out together.
๐.๐. ๐๐๐ค๐ฃ๐ค๐ข๐๐ ๐๐ฉ๐ง๐๐ฉ๐๐๐ฎ ๐๐ฃ๐ ๐๐๐ ๐๐ค๐ก๐๐๐๐๐จ
U.S. Treasury Secretary Scott Bessent has clarified that the Trump administrationโs goal is not to lower the Federal Reserve's interest rates but rather to reduce 10-year Treasury yields through sustainable economic growth and controlled inflation. The plan is based on three main pillars:
โข ๐๐ก๐๐ซ๐๐ฉ๐๐ฃ๐ ๐ฉ๐๐ ๐.๐. ๐ฉ๐ง๐๐ฃ๐ ๐๐ง๐ค๐ฌ๐ฉ๐ ๐ง๐๐ฉ๐ from approximately 2% to 3% through a mix of tax cuts, deregulation, and the reshoring of manufacturing jobs via โstrategic protectionism,โ while also reducing energy costs.
โข ๐๐๐๐ช๐๐๐ฃ๐ ๐ฉ๐๐ ๐.๐. ๐๐ช๐๐๐๐ฉ ๐๐๐๐๐๐๐ฉ from over 6% of GDP this year to 3% by the end of Trumpโs four-year term, leveraging stronger economic growth and cutting unnecessary government spending.
โข ๐๐ค๐ฌ๐๐ง๐๐ฃ๐ ๐๐ฃ๐๐ง๐๐ฎ ๐๐ค๐จ๐ฉ๐จ ๐๐ฃ๐ ๐๐ช๐ง๐๐๐ฃ๐ ๐๐ฃ๐๐ก๐๐ฉ๐๐ค๐ฃ expectations by increasing U.S. oil and gas production by 3 million barrels of oil equivalent per day, facilitated by deregulation and expanded access to drilling sites.
This strategy aims to allow markets to determine bond yields independently, in stark contrast to Janet Yellenโs past approach, which favored direct interventions to stabilize the financial system.
๐๐๐ค๐ฃ๐ค๐ข๐๐ ๐๐ง๐ค๐ฌ๐ฉ๐ ๐๐ฃ๐ ๐ฉ๐๐ ๐๐ฃ๐๐ช๐จ๐ฉ๐ง๐๐๐ก ๐พ๐ฎ๐๐ก๐
The economic cycle is accelerating, driven by a rebound in the manufacturing sector. Rising production orders indicate strong demand. While the services sector shows some weaknesses, it does not pose a significant concern as long as industrial activity remains robust. However, markets remain vulnerable to volatility stemming from Trumpโs trade policies.
๐๐ฃ๐๐ก๐๐ฉ๐๐ค๐ฃ, ๐๐๐๐ค๐ง ๐๐๐ง๐ ๐๐ฉ, ๐๐ฃ๐ ๐๐ฃ๐ฉ๐๐ง๐๐จ๐ฉ ๐๐๐ฉ๐๐จ
The latest January inflation report suggests that the Fed may keep interest rates elevated for longer than previously expected:
โข Monthly CPI: +0.5% (above the forecast of +0.3%)
โข Core CPI (monthly): +0.4% (vs. expected +0.3%)
โข Annual CPI: 3.0% (vs. forecasted 2.9%)
โข Core CPI (annual): 3.3% (vs. expected 3.1%)
Food inflation is gaining momentum, and rising demand for raw materials could intensify as tariffs increase.
Price hikes have affected various sectors, including housing, groceries, and pharmaceuticals. However, a slowdown in the housing market could help curb overall inflation.
The Producer Price Index (PPI) for January shows that production costs rose by 0.4% month-over-month, exceeding expectations of 0.2%. On an annual basis, the increase stands at 3.5%.
New data confirms the strength and resilience of the labor market.
Fed Chair Jerome Powell has reiterated that the economy remains solid and that there is no urgency to cut interest rates.
๐๐ช๐ฉ๐ช๐ง๐ ๐๐ช๐ฉ๐ก๐ค๐ค๐
Persistently high inflation and a strong labor market are prompting investors to reassess their expectations for rate cuts.
Meanwhile, a 0.9% decline in January retail sales suggests that economic growth may slow in the first quarter. The most affected sectors were sporting goods, music, and books (-4.6%), while online purchases dropped by 1.9%.
๐พ๐ค๐ฃ๐๐ก๐ช๐จ๐๐ค๐ฃ
The U.S. economy is in an expansion phase but faces significant challenges due to persistent inflation and the Fedโs monetary policy. Markets are recalibrating interest rate expectations, with a growing focus on cyclical assets and commodities.
Gold and silver are experiencing strong growth, fueled by central bank purchases and economic uncertainty. At the same time, industrial metals such as copper are benefiting from the manufacturing rebound and protectionist policies, creating opportunities in the mining sector.
Thank you for your support!
$GOLD$SILVER$COPPER.FUT$OIL... Show More
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
