Gold Declines as Market Weighs Federal Reserve Rate Path

Just in | Fed's Williams: Central Bank Independence Enhances Economic Performance NYFED'S WILLIAMS Q&A/CBE: SEEMS LIKE 'UNUSUAL TIMES;' SEEING PRETTY STABLE INFL EXPECTATIONS; HOPE TO SEE GEOPOLITICAL STABILIZATION IN A MONTH OR TWO #Williams #FederalReserve #economy FED'S WILLIAMS: NOT YET OBSERVING SIGNIFICANT SECOND-ROUND IMPACT ON INFLATION; CONSIDERABLE UNCERTAINTY SURROUNDING THE ENERGY PRICE OUTLOOK; THE JOB MARKET HAS BEEN SHOWING SIGNS OF STABILIZING — NEITHER "HOT" NOR SLOWING SHARPLY

When President Xi very elegantly referred to the United States as perhaps being a declining nation, he was referring to the tremendous damage we suffered during the four years of Sleepy Joe Biden and the Biden Administration, and on that score, he was 100% correct. Our Country suffered immeasurably with open borders, high taxes, transgender for everybody, men in women’s sports, DEI, horrible trade deals, rampant crime, and so much more! President Xi was not referring to the incredible rise that the United States has displayed to the world during the 16 spectacular months of the Trump Administration, which includes all-time high stock markets and 401K’s, military victory and thriving relationship in Venezuela, the military decimation of Iran (to be continued!) — Strongest military on earth by far, economic powerhouse again, with a record 18 trillion dollars being invested into the United States by others, best U.S. job market in history, with more people working in the United States right now than ever before, ending country destroying DEI, and so many other things that it would be impossible to readily list. In fact, President Xi congratulated me on so many tremendous successes in such a short period of time. Two years ago, we were, in fact, a Nation in decline. On that, I fully agree with President Xi! But now, the United States is the hottest Nation anywhere in the world, and hopefully our relationship with China will be stronger and better than ever before!

Thank you for the opportunity to speak to you today. There has been a lot of discussion of late about reducing the size of the balance sheet of the Federal Reserve to reduce our "footprint" in the financial system. I think it is important to frame the discussion, first by being clear about the nature of the problem to be solved and then weighing the tradeoffs of any remedies. I think shrinking the balance sheet is the wrong objective, and many of the proposals to meet this objective would undermine bank resilience, impede money market functioning, and, ultimately, threaten financial stability. Some would actually increase the Fed's footprint in financial markets. That's because the Fed's footprint in the financial system consists not only of the duration, composition, and size of our balance sheet (which are distinct issues), but also our roles in promoting the safety and soundness of banks, running the backbone of the payment system, and supporting financial stability. It doesn't make sense to talk about "the Fed's footprint" without taking into account these key functions and the way they interact. Some of the prominent proposals to reduce the Fed's balance sheet would have perverse effects that would actually increase the Fed's footprint in the financial system. For example, some proposals would increase the frequency of Fed lending and transactions in markets, both to implement monetary policy on an ongoing basis and, in extremis, to engage in interventions to preserve financial stability. FED GOV BARR/NYU MARKETEERS: ALL PROPOSALS TO CHANGE BALANCE SHEET POLICY INVOLVE ''SIGNIFICANT TRADEOFFS;' SHRINKING IT 'THE WRONG GOAL' #Barr #FederalReserve #economy FED GOV BARR/NYU MARKETEERS: REDUCING RESILIENCE OF BANKING SYSTEM 'THE WRONG MEANS' TO CHANGE BALANCE SHEET POLICY #Barr #FederalReserve #economy