Latest news with #financialMarkets
Wall Street Journal
18-07-2025
- Business
- Wall Street Journal
The Fed Anchors Financial Markets. What Happens If It Loses Its Independence?
President Trump's threat to attempt to fire Federal Reserve Chair Jerome Powell has raised a pressing but potentially unanswerable question: What would the global economy and financial markets look like without an independent U.S. central bank? Shielded from White House interference, the independent Fed has increasingly served as an anchor for U.S. and global markets, stepping in to steady the ship during the 2008-09 financial crisis, the Covid pandemic and other shocks of recent years. Economists credit the central bank's ability to help keep things stable in large part to its power to make moves it deems necessary, regardless of politics.
The Standard
10-07-2025
- Business
- The Standard
Regulators should limit leverage for 'shadow banks' in core markets, FSB says
A drone view of the City of London, Britain's financial powerhouse, at daybreak, as markets awaited a key interest rate decision by the Bank of England, in London, Britain June 19, 2025. REUTERS/Yann Tessier
Reuters
09-07-2025
- Business
- Reuters
Wall Street pushes out end of Fed balance sheet wind-down, minutes show
NEW YORK, July 9 (Reuters) - Financial market participants have pushed out yet again the end date for the effort to shrink the size of the Federal Reserve's large balance sheet, the minutes of the U.S. central bank's June 17-18 policy meeting showed on Wednesday. The drawdown of the Fed's stock of bonds is now expected to stop in February when the balance sheet stands at $6.2 trillion, big banks and money funds told the U.S. central bank ahead of last month's policy meeting, the minutes noted. That represents a small shift from what survey respondents said ahead of the Fed's policy meeting in early May, when they eyed a January end date, and $6.125 trillion in total holdings. The Fed has been shrinking the size of its balance sheet since the summer of 2022 in an effort referred to as quantitative tightening, or QT. The central bank has allowed set amounts of bonds it bought during the COVID-19 pandemic to mature and not be replaced, in an effort that so far has taken the overall stock of cash and bonds it holds from a record $9 trillion to the current level of $6.7 trillion. The Fed more than doubled its bond holdings to stabilize markets and then provide stimulus to the economy beyond what could be delivered by near-zero short-term rates. The QT program has been aimed at removing excess levels of liquidity from the market as part of a broader monetary policy normalization, but there's been ongoing uncertainty when that process could end, and at what level of holdings the Fed would be able to rest at. For some time, market participants have expected the Fed to stop QT this year. But earlier in 2025 the Fed slowed QT in order to reduce the risk of market disruptions while the Treasury Department took action to deal with government financing needs during wrangling over the government's official borrowing limit and its broader budget needs. Much of that uncertainty was resolved last week with the passage of a Trump administration budget bill that lifted the borrowing cap, which will allow the Treasury to sell more debt. Increased debt sales will cut into the reserve levels the Fed has been trying to shrink with QT. The reserves now stand at around $3.3 trillion, a level that's been steady for some time. The minutes released on Wednesday said market participants told the Fed they see reserves dipping to $2.9 trillion due to QT. Respondents also said the Fed's reverse repo facility, which held $227 billion on Wednesday, should move to a "low" level.
Yahoo
09-07-2025
- Business
- Yahoo
Wall Street pushes out end of Fed balance sheet wind-down, minutes show
By Michael S. Derby NEW YORK (Reuters) -Financial market participants have pushed out yet again the end date for the effort to shrink the size of the Federal Reserve's large balance sheet, the minutes of the U.S. central bank's June 17-18 policy meeting showed on Wednesday. The drawdown of the Fed's stock of bonds is now expected to stop in February when the balance sheet stands at $6.2 trillion, big banks and money funds told the U.S. central bank ahead of last month's policy meeting, the minutes noted. That represents a small shift from what survey respondents said ahead of the Fed's policy meeting in early May, when they eyed a January end date, and $6.125 trillion in total holdings. The Fed has been shrinking the size of its balance sheet since the summer of 2022 in an effort referred to as quantitative tightening, or QT. The central bank has allowed set amounts of bonds it bought during the COVID-19 pandemic to mature and not be replaced, in an effort that so far has taken the overall stock of cash and bonds it holds from a record $9 trillion to the current level of $6.7 trillion. The Fed more than doubled its bond holdings to stabilize markets and then provide stimulus to the economy beyond what could be delivered by near-zero short-term rates. The QT program has been aimed at removing excess levels of liquidity from the market as part of a broader monetary policy normalization, but there's been ongoing uncertainty when that process could end, and at what level of holdings the Fed would be able to rest at. For some time, market participants have expected the Fed to stop QT this year. But earlier in 2025 the Fed slowed QT in order to reduce the risk of market disruptions while the Treasury Department took action to deal with government financing needs during wrangling over the government's official borrowing limit and its broader budget needs. Much of that uncertainty was resolved last week with the passage of a Trump administration budget bill that lifted the borrowing cap, which will allow the Treasury to sell more debt. Increased debt sales will cut into the reserve levels the Fed has been trying to shrink with QT. The reserves now stand at around $3.3 trillion, a level that's been steady for some time. The minutes released on Wednesday said market participants told the Fed they see reserves dipping to $2.9 trillion due to QT. Respondents also said the Fed's reverse repo facility, which held $227 billion on Wednesday, should move to a "low" level.
Forbes
09-07-2025
- Business
- Forbes
Why The Case For Gold Bullion Is Strengthening Over ETFs
Max Baecker is the President of American Hartford Gold, a leading precious metals retailer. As geopolitical tensions intensify and economic uncertainty continues to dominate headlines, investors are turning to gold in numbers not seen in years. According to the latest data, total gold demand rose 1% year over year to 1,206 tons, driven by tariff news, uncertainty and stock market volatility. While gold-backed exchange-traded funds (ETFs) have surged in popularity, offering liquidity and low fees, a growing chorus of experts and institutions is pointing toward a renewed case for physical gold. Thus, the core dilemma facing gold investors today is which form to invest in: paper or tangible metal. Paper Gold's Rally Gold ETFs are having a breakout year. In the first quarter of 2025, investors added 226.5 tons of bullion to gold ETFs, the largest quarterly inflow since 2022. This influx helped fuel a rally in gold prices over the three-month period, with gold ultimately hitting an all-time high around $3,500 an ounce on April 22. The reasons for ETF enthusiasm are clear. They offer: • High liquidity: Shares can be traded in real time like stocks. • Lower costs: There is no need for vaults, insurance or dealer premiums. • Accessibility: Fractional ownership means more people can invest. • Transparency: Prices track global markets in real time. • Portfolio integration: ETFs fit neatly into digital-first investment platforms, favored by younger investors. In fact, physically backed gold ETFs saw five straight months of net inflows through April, with $11 billion added that month. The Case For Tangible Gold While ETFs offer speed and scale, physical gold offers something paper cannot: direct ownership. And in today's climate, that's starting to matter more. In contrast to ETFs, which rely on financial intermediaries, physical gold represents a direct, tangible asset held by the investor. Whether in the form of bullion bars or government-minted coins, it's touchable and independent of digital infrastructure. Central banks understand this well. They purchased 244 tons of gold in Q1 2025, continuing a trend of elevated buying over the past three years. These institutions are not choosing ETFs. They're taking physical delivery. The motive? Uncertainty and diversification away from the U.S. dollar. Large sovereign buyers are prioritizing control and security over convenience. That same rationale is now resonating with private investors. Yes, gold ETFs are easier. They're cheaper. They're faster. But when the system is stressed, when headlines turn to sanctions, inflation spikes or liquidity freezes, the question becomes: Do you want paper, or possession? While ETFs may outperform during periods of relative calm, physical gold's appeal lies in its resilience. It can't be hacked. It isn't a promise; it's the asset itself. For investors looking beyond quarterly returns toward security and wealth preservation, physical gold becomes more appealing. Key Considerations For Investing In Physical Gold For first-time buyers seeking to guard against uncertainty, investing in physical gold requires certain considerations. Different types of gold serve different purposes. Government-minted coins, such as the American Gold Eagle or Canadian Maple Leaf, tend to be more recognizable and easier to resell. Bullion bars often come with lower premiums, but they may not offer the same flexibility or ease of resale as coins. Choosing which form of gold to invest in depends on the investor's priorities, such as liquidity, affordability or recognizability. Secure storage is another key factor. Some investors prefer to store gold at home for direct access, but this can increase the risk of theft. Safe deposit boxes at banks and private vaulting services offer enhanced security, along with insurance options that can better protect the investment. Evaluating where and how to store gold should be part of any buying decision. Insurance coverage is essential. Most homeowner insurance policies only cover small amounts of precious metals, if any. Investors should explore dedicated bullion insurance policies or choose storage options that include coverage. This added layer of protection helps provide peace of mind in uncertain times. It is also important to verify the purity and authenticity of the gold being purchased. Reputable dealers will provide products stamped with weight and purity, along with certificates of authenticity. Investors should approach collectible or numismatic coins with care unless they are experienced in that niche, as these products often carry high premiums and fluctuating value. Finally, consider the long-term implications of selling. Some gold products are easier to liquidate than others, and dealer buy-back policies can vary. Investors should also be aware that physical gold is considered a collectible by the IRS, and any gains may be taxed at a rate of up to 28%. Understanding these financial and logistical details can help investors make informed, confident choices as they turn to gold as a hedge against today's growing risks. Conclusion In an era marked by systemic risks and shifting global power dynamics, owning physical gold provides clarity and control that paper assets often lack. As the global financial landscape continues to evolve, physical gold remains a timeless anchor for those focused on lasting value. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
