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One of our “Fed favourites”, Lael Brainard, held a speech on Friday. A speech potentially quite gold-positive as well as dollar-negative, economists at Nordea apprise. Gold prices have been on an Elon Musk like Space-X mission, no matter whether measured in USDs, EURs or SEKs.

Key quotes

“The Fed ought to jump onto the easing accelerator via forward guidance, bond purchases and yield-curve control (YCC) a la BoJ.”

“She furthermore argues the case for letting inflation overshoot to compensate for previous undershoots (opportunistic reflation).”

“We would face a much tighter transatlantic spread than in a very long time. This ought to be VERY good news for e.g. gold prices, and quite damaging for the dollar and very good news for populist movements since wealth inequality will continue to surge. 

“We continue to be bullish on Gold, as we wouldn’t bet that we have reached our final destination on central bank creativity.”