Core Viewpoint - The market speculation regarding the potential revaluation of the U.S. gold reserves has been reignited as the value of these reserves has surpassed $1 trillion for the first time, following a 45% increase in gold prices this year [1][2]. Group 1: U.S. Gold Reserves and Market Implications - The U.S. Treasury holds gold reserves directly, unlike most countries that store gold in central banks, with the Federal Reserve holding corresponding gold certificates [4]. - A revaluation of the gold reserves at current market prices could inject approximately $990 billion into the Treasury, significantly reducing the need for new debt issuance this year [5][9]. - This revaluation would directly impact the balance sheets of both the U.S. Treasury and the Federal Reserve, increasing the Treasury's assets and liabilities simultaneously [6][7]. Group 2: Economic and Policy Considerations - The process of revaluing gold reserves could resemble unconventional monetary policy tools like quantitative easing, expanding the Federal Reserve's balance sheet without traditional market operations [8][10]. - Historically, the U.S. has refrained from revaluing its gold reserves to avoid volatility in the Treasury and Federal Reserve's balance sheets and to maintain the independence of fiscal and monetary authorities [11]. - Other countries, such as Germany, Italy, and South Africa, have previously revalued their gold reserves, indicating that this action is not without precedent [12]. Group 3: Potential Risks and Market Reactions - Analysts have raised concerns that revaluing gold reserves could stimulate economic activity, trigger inflation risks, and inject excess liquidity into the banking system [13][14]. - The revaluation could also lead to increased prices for gold, Bitcoin, and other assets that may be considered for "remonetization" [15]. - The likelihood of implementation remains low unless Treasury Secretary Yellen provides credible details on how to "monetize the asset side of the U.S. balance sheet," despite rising speculation due to the unconventional approach of the Trump administration [16].

Economic Situation - The local economy is experiencing a significant downturn, with businesses like tea shops seeing a drastic drop in sales and factories operating at reduced capacity [1] - There is a noticeable lack of consumer demand, leading to a halt in production and a rise in unemployment [4][6] Policy Responses - The central bank and finance ministry have opted for Keynesian policies to stimulate demand, emphasizing the need for government intervention to avoid prolonged high unemployment [6] - The central bank has implemented a 50 basis point interest rate cut, which has led to a positive market response, encouraging investments and consumer spending [11] Banking Sector Challenges - There is a concerning trend of increased bank deposits as residents choose to save rather than spend, which could lead to a vicious cycle of reduced consumption and further economic decline [7] - The banking sector is facing operational difficulties due to low loan demand, impacting their ability to generate profits [7] Monetary Tools - The central bank is utilizing various monetary tools, including interest rate cuts and open market operations, to inject liquidity into the economy and stabilize banking operations [12][14] - The reserve requirement ratio is highlighted as a critical tool for managing the money supply, with potential adjustments having significant implications for market liquidity [14] Long-term Strategies - The central bank is cautious about using unconventional tools like quantitative easing, recognizing the potential long-term risks associated with excessive liquidity [17] - It is acknowledged that while monetary policy can address immediate liquidity issues, fiscal policy is essential for directly boosting consumer demand and economic activity [20]

Core Viewpoint - The Bank of England's Chief Economist Huw Pill advocates for a faster reduction of the central bank's large bond balance sheet accumulated under quantitative easing (QE), suggesting that the market is stronger than previously thought and that the central bank has robust tools to support it in case of market stress [1][2][5] Group 1: Market Dynamics - The current "UK bond storm" is primarily due to the loss of the Bank of England as a major buyer, leading to increased volatility and weaker demand for long-dated gilt bonds, particularly the 30-year bonds, which saw yields rise to a new high of 5.7% in early September [2][5] - Pill expressed dissent against the Monetary Policy Committee's (MPC) decision to slow the pace of quantitative tightening (QT) from £100 billion to £70 billion, arguing that market demand is stronger than other officials believe [2][5] Group 2: Quantitative Easing and Financial Impact - The Bank of England still holds nearly £600 billion in UK government bonds, despite ongoing QT efforts, which include actively selling bonds and not reinvesting the principal of maturing bonds [5][6] - Since the Bank of England raised the base rate above 2%, its asset portfolio has incurred losses of approximately £93 billion, erasing most of the £124 billion profit gained since 2009, and is projected to result in taxpayer losses exceeding £100 billion over the project's lifecycle [6][10] Group 3: Policy and Governance - Pill emphasized the need for well-designed government fiscal rules to address the large capital flows resulting from past QE decisions, indicating that the complexities arising from QE are not the central bank's responsibility [6][10] - The UK Treasury has lost 75% of the profits previously gained through QE, highlighting the significant financial implications of the current monetary policy environment [9]

"鲍威尔交出美联储主席职务权杖可以看作是美联储性质发生转变的重要标志，即政治权力开始全 面嵌入美联储的决策架构，华尔街接下来可能会花更多精力去揣摩总统的意图。" 与沃什和哈西特相比，沃勒在美联储的工作时间更长，而且还是由特朗普提名成为美联储理事会成 员的。此前沃勒担任圣路易斯联储执行副主席，业界经验没留空白，更重要的是，围绕贝弗里奇曲线 （反映职位空缺率与失业率之间经验关系的曲线）原理，传统经济学和美联储官员一直认为不存在职位 空缺率显著下降同时失业率未显著增长的时期。换句话说，空缺率的下降，都将伴随失业率大幅增加， 但沃勒认为，劳动力需求降温可能会导致职位空缺下降，而失业率不会像往常一样上升，未来实现"软 着陆"是可能的。再看当下美国，通胀逐步接近2%，失业率持续处于近半个世纪的低点，客观事实印证 了沃勒的"先见之明"，其在美联储内部的影响力因此日益攀升，并被广泛认为是仅次于鲍威尔的美联 储"二号人物"。 物色与选聘美联储新任主席的人事工作正在异常高调且热闹地进行着。除了美国总统特朗普亲自出 面造势，并反复表示已经圈定了候选人范围外，财政部长贝森特也十分卖力地亲手操盘。按照贝森特的 说法，年底前将正式公布美 ...

Core Viewpoint - The Trump administration is pushing the concept of "moderate long-term interest rates" into the core of monetary policy, potentially disrupting decades of investment norms on Wall Street [1][2] Group 1: Policy Implications - The reference to "moderate long-term interest rates" by the Trump-nominated Federal Reserve nominee, Milan, has sparked significant discussion among bond traders, highlighting a previously overlooked "third mandate" of the Federal Reserve [1][2] - This shift indicates the Trump administration's willingness to leverage Federal Reserve regulations to justify intervention in the long-term bond market, which could undermine the Fed's long-standing independence [2][3] Group 2: Market Reactions - Analysts are exploring various potential methods the Trump administration and the Federal Reserve might employ to control long-term interest rates, prompting adjustments in investment strategies [3] - Possible policy options include the Treasury selling more short-term Treasury bills while repurchasing longer-term bonds, or more aggressive measures like quantitative easing (QE) to purchase bonds [3][4] Group 3: Historical Context and Risks - Historical precedents for Federal Reserve intervention in long-term rates include actions taken during World War II and the post-war period, as well as during the global financial crisis and the COVID-19 pandemic [5][6] - Concerns about inflation risks are prevalent, with warnings that attempts to suppress long-term rates could backfire if inflation remains above target levels [6][8] Group 4: Debt and Interest Rate Dynamics - The ambiguity surrounding the term "moderate long-term interest rates" allows for broad interpretations, which could justify various policy actions [7] - The current level of 10-year Treasury yields around 4% is significantly lower than the historical average of 5.8% since the early 1960s, suggesting that unconventional policies may not be necessary [7] - The U.S. national debt has reached $37.4 trillion, with expectations that lower interest rates will help reduce the cost of financing this substantial debt [7][8]

Core Viewpoint - The recent nomination of Stephen Miran to the Federal Reserve has sparked discussions about a potential "third mandate" focusing on "moderate long-term interest rates," which could disrupt existing investment strategies and challenge the Fed's independence [1][2]. Group 1: Federal Reserve's Mandate - The Federal Reserve has traditionally operated under a "dual mandate" of price stability and full employment, a principle reiterated by past and current chairpersons [1]. - Miran's reference to a "third mandate" has raised concerns among market analysts about the implications for monetary policy and long-term interest rates [1][2]. - The concept of a "third mandate" is seen as a potential tool for the Trump administration to influence long-term Treasury yields, thereby undermining the Fed's historical independence [1][2]. Group 2: Market Reactions and Strategies - Analysts are cautious about the implications of a potential policy shift, with some investors already adjusting their strategies to account for possible government intervention in long-term rates [2][3]. - Strategies being discussed include the issuance of more short-term Treasuries and increased long-term Treasury buybacks, as well as the possibility of the Fed restarting quantitative easing (QE) [3][4]. - The expectation of government intervention has increased the risks associated with shorting long-term Treasuries, as any loss of Fed independence could lead to significant market disruptions [4]. Group 3: Historical Context and Comparisons - Historical precedents for government intervention in long-term rates include actions taken during World War II and the 2008 financial crisis, where the Fed employed various strategies to manage long-term yields [6]. - Current discussions around the "third mandate" are viewed as lacking justification, as the economy is not in a state of crisis that would typically warrant such measures [6][7]. - The ambiguity surrounding the definition of "moderate long-term interest rates" raises concerns about its potential use to justify various policy actions [7]. Group 4: Debt and Fiscal Implications - The U.S. national debt has reached $37.4 trillion, with rising government deficits necessitating lower interest rates to manage financing costs [8]. - The current fiscal strategy involves increasing short-term debt issuance while maintaining stable long-term debt levels, reflecting a shift in how the government approaches debt management [8]. - The administration's willingness to accept higher inflation in pursuit of lower long-term rates indicates a strategic pivot in fiscal policy [8].

Economic Outlook - A top European strategist predicts that gold prices will reach $4,000 per ounce and silver prices will hit $50 per ounce within the next 3 to 6 months due to a rapidly weakening U.S. economy, which will compel the Federal Reserve to take aggressive actions [1][2] - The U.S. labor market is showing signs of significant weakness, with a downward revision of 910,000 jobs in annual employment growth data, indicating a slowdown in the economy [2][3] Political Landscape - The political foundation in Europe is also under strain, highlighted by the recent collapse of the French government, which was triggered by a failed confidence vote [3] - The crisis in France is linked to attempts to control rising debt, with the country’s debt increasing by €5,000 per second [3] Inflation and Wealth Transfer - The current political realities suggest that governments may resort to maintaining inflation at 3% to 4%, which could lead to a 50% loss in purchasing power for cash holders over ten years [4] - This period is expected to witness a significant transfer of wealth, with some individuals losing wealth while others accumulate it [4] Precious Metals and Mining Sector - The strategist believes that precious metals and their producing companies are poised for explosive growth, with gold prices nearing a historical high of $3,680 per ounce [5] - Silver is viewed as undervalued, and if it surpasses $50 per ounce, it could potentially rise to $100, with significant price increases expected in the event of shortages [5] - The mining sector is beginning to react, as evidenced by a $53 billion merger between Anglo American and Teck Resources, signaling the start of a merger cycle in the industry [5]

Core Viewpoint - Japan's economy is experiencing a significant shift as inflation rises, leading to a normalization of monetary policy after years of stagnation and negative interest rates. The Bank of Japan has raised interest rates three times since March 2022, marking a departure from its long-standing ultra-loose monetary policy [1][15]. Group 1: Economic Context - Japan's inflation has consistently exceeded the 2% target since 2022, with CPI inflation reaching 2.5%, 3.2%, and 2.7% in 2022, 2023, and 2024 respectively [4]. - The nominal GDP growth rate for Japan from 2021 to 2024 is projected to average 3.0%, outperforming the 2.0% average from 2013 to 2017 [11]. Group 2: Monetary Policy Changes - The Bank of Japan has implemented a series of interest rate hikes, totaling 60 basis points over three increases since March 2022, marking the end of an eight-year negative interest rate policy [1][15]. - The introduction of quantitative easing (QE) and later qualitative and quantitative easing (QQE) aimed to combat deflation but had limited success until recent external shocks triggered inflation [2][3]. Group 3: External Influences - Three major external shocks since 2020 have contributed to Japan's inflation: the COVID-19 pandemic disrupting global supply chains, the subsequent rise in commodity prices, and the geopolitical tensions from the Russia-Ukraine conflict [5][6][8]. - The depreciation of the yen against the dollar, exacerbated by divergent monetary policies between Japan and other major economies, has intensified inflationary pressures in Japan [8][15]. Group 4: Inflation Dynamics - Input inflation pressures have been significant, with the Producer Price Index (PPI) averaging 9.8% in 2022, leading to CPI and core CPI inflation rates of 4.0% by the end of that year [7][8]. - The rise in inflation expectations has been notable, with surveys indicating a significant increase in the proportion of respondents anticipating price increases [12][13]. Group 5: Future Outlook - Despite the positive trends, Japan's economic recovery remains fragile, with real GDP growth projected at only 1.2% from 2021 to 2024, indicating a slow recovery compared to other economies [14]. - The potential for rising government financing costs due to increased bond yields poses a challenge for Japan's fiscal stability, especially given its high debt-to-GDP ratio [15].

Core Viewpoint - The article discusses U.S. Treasury Secretary Mnuchin's unexpected criticism of the Federal Reserve, focusing on the politicization of its operations rather than interest rate cuts [1][2]. Group 1: Criticism of the Federal Reserve - Mnuchin's article in "International Economy" criticizes the Fed for its "mission confusion," claiming that political factors have influenced its financial regulation and quantitative easing (QE) operations [1][2]. - He argues that QE has a questionable theoretical basis and leads to adverse economic outcomes, such as distorting markets and exacerbating income inequality by inflating asset prices for the wealthy [1][2]. Group 2: Call for Narrowing the Fed's Mandate - Mnuchin advocates for a "narrow mandate" for the Fed, suggesting it should cease asset purchases to achieve better economic outcomes and maintain the central bank's independence, which he deems crucial for U.S. economic success [2]. - This perspective aligns with other prominent figures close to President Trump, indicating a growing faction that supports narrowing the Fed's mission [2]. Group 3: Broader Implications and Concerns - The article highlights concerns about the potential impact of Trump's attacks on the Fed's independence and the credibility of monetary policy [3][4]. - It raises questions about whether Mnuchin can effectively halt or reduce asset purchases given the increasing U.S. deficit and the pressure for "fiscal dominance" [4]. - The article also speculates on how changes in leadership at the Fed could affect interest rate policies and asset purchases, particularly if Kevin Warsh were to replace Jerome Powell [4][5]. Group 4: Global Context and Future Outlook - The article notes that other central banks are also facing scrutiny regarding their expanded missions, with examples like the New Zealand central bank experiencing internal turmoil [5]. - It suggests that the upcoming Fed meeting will primarily focus on interest rates, but the underlying debates about the Fed's balance sheet and mission will continue to intensify as U.S. debt levels rise [5].

Report Industry Investment Rating - Not provided in the given content Core View - Similar to the Bank of Japan, the Fed's bond - buying policy was initially a tool for liquidity adjustment. In 2008, the sub - prime mortgage crisis led to systemic financial risks and exhausted traditional interest - rate cut space, prompting the Fed to turn to QE. In 2020, the COVID - 19 outbreak restarted QE. In the short term, the impact of the QE policy on Treasury yields evolves more through investors' expectations, while in the long term, the US QE significantly affects long - term Treasury yields. Large - scale bond purchases provide liquidity to the financial market and drive down interest rates to some extent [1][66]. Summary by Different Stages First Stage (Before 2008): Traditional Monetary Policy Tool for Providing Liquidity - **Macro Background and Policy Objectives**: To meet the continuous expansionary demand for base money, the Fed used open - market operations (permanent and temporary) to control the money supply and influence interest rates. Asset purchases mainly supported currency issuance, while repurchase transactions smoothed liquidity disturbances [14][15]. - **Bond - buying Method**: One - way purchases in the primary and secondary markets. The Fed usually conducted weekly bond - buying operations in the secondary market through the SOMA. From 2004 - 2006, it carried out 40, 24, and 39 cash - bond transactions respectively, with average single - time increases of $1.28 billion, $1.04 billion, and $0.92 billion [20]. - **Impact on the Bond Market**: The Fed's bond - buying had a relatively limited impact on the bond market as its core goal was to limit the impact on normal market functions and the purchase scale was generally small. US Treasury yields were mainly determined by market expectations of future economic growth, inflation, and policy rates [38]. Second Stage (2008 - 2014): Quantitative Easing after the Sub - prime Mortgage Crisis - **Macro Background and Policy Objectives**: The 2008 sub - prime mortgage crisis led to a liquidity crisis. The Fed implemented QE to stabilize the financial and real - estate markets, lower long - term interest rates, and stimulate the economy by purchasing assets and expanding its balance sheet [39][40]. - **Bond - buying Method**: Continuous purchases in the secondary market. The QE process included three rounds and a twist operation. QE1 (2008.11 - 2010.3) had a total scale of $1.725 trillion; QE2 (2010.11 - 2011.6) involved buying $600 billion of long - term Treasuries; the twist operation (2011.9 - 2012.12) sold short - term Treasuries and bought an equal amount of long - term Treasuries; QE3 (2012.9 - 2014.10) was an open - ended plan. The Fed started tapering in 2013 [41][44]. - **Impact on the Bond Market**: The actual bond - buying operations had inconsistent effects on bond yields. After the QE policy was introduced, the bond market traded more based on investors' expectations. In the long run, the QE policy significantly reduced US bond yields. From October 2008 to October 2014, the yields of 1 - year and 10 - year Treasuries dropped by 124BP and 166BP respectively [47][48]. Third Stage (2015 - 2018): Difficult Exploration of Normalization - **Macro Background and Policy Objectives**: With the US economy's moderate recovery, the Fed aimed to exit the ultra - loose policy through passive balance - sheet reduction to avoid asset price bubbles and financial risks [49][50]. - **Bond - buying Method**: No reinvestment after bond maturity. The Fed raised interest rates 9 times from the end of 2015 to the end of 2018 and started QT in October 2017, gradually reducing its bond holdings [51][52]. - **Impact on the Bond Market**: After the QT policy was implemented, US Treasury yields continued to rise. It is believed that balance - sheet reduction increased Treasury yields as it meant less demand for US Treasuries and occurred during the late stage of the interest - rate hike cycle [55]. Fourth Stage (2019 - 2022): Unprecedented Response to the Pandemic - **Macro Background and Policy Objectives**: The COVID - 19 outbreak in 2020 led to an economic slowdown and market panic. The Fed launched an "unlimited QE" to start the crisis - response mode [56][57]. - **Bond - buying Method**: Unlimited QE - Taper - Balance - sheet reduction. The Fed cut interest rates to zero in March 2020, launched a $700 billion QE plan, and then an "unlimited QE". It started tapering in November 2021 and planned to end QE in mid - 2022. Balance - sheet reduction started in May 2022 [58][60][61]. - **Impact on the Bond Market**: After the "unlimited QE" was announced, US bond yields declined. However, due to factors such as investors' expectations and economic fluctuations, the ultimate impact of the Fed's bond - buying was limited. In 2022, the Fed's bond - buying failed to lower bond yields [63][65].