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Powell Pivot II Is Closer Than You Think

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Today's U.S. economic data is gloomy and points toward worsening conditions and eventual recession. The amount of time before Powell Pivot II kicks in just got shorter.

We already have Fed Goons Bullard and Bostic starting to walk back rate hike expectations. Bullard warned everyone last Friday, and Bostic said the same on Monday:

And now this. First, check Tuesday's flash PMIs for May and note how far below expectations they are:

tweet 1

If that wasn't bad enough, check out what higher mortgage rates have done to new home sales!

tweet 2

And for some salt in the wound, here comes the Richmond Fed manufacturing survey:

Richmond Fed manufacturing index for May -9 vs. +9 estimate https://t.co/t7KJ7boODy

— ForexLive (@ForexLive) May 24, 2022

Thus, the looming recession and Powell Pivot drove a strong bid for treasuries, and as you can see, the yield on the 10-year note is back to 2.75% and looking to paint a head-and-shoulder topping pattern on the daily chart:

tweet 3

Just as Bullard and Bostic warned, rate hike expectations are now falling...


— zerohedge (@zerohedge) May 24, 2022

...and this is continuing the drop in the U.S. Dollar Index that began two weeks ago:


And the bad news just keeps piling up...not just in the United States, but around the globe:

JPM pic.twitter.com/me9aMkh6mS

— zerohedge (@zerohedge) May 24, 2022

"It's Going To Get Truly Horrific": Gas, Electricity Bills In Europe Could Jump To 4.5% Of Disposable Income In 2023 https://t.co/xD2c5P7GkC

— zerohedge (@zerohedge) May 24, 2022

U.S. spring #wheat planting is advancing at the slowest pace in more than 20 years and was only 49% complete as of Sunday. Average for the date is 83%. Minnesota is only 11% planted vs 90% avg. North Dakota 27% vs 80% avg. Those two states grow two-thirds of the U.S. crop. pic.twitter.com/cZA0xKOWOY

— Karen Braun (@kannbwx) May 23, 2022

COMEX gold and silver prices rallied on all this news, but not an exorbitant amount:

chart 4

But, whatever. It doesn't matter. What matters is that you can plainly see now what we laid out for you in this year's macrocast. This will be a doozy of a summer, and the back third of the year will see the best, sustained price gains of 2022. And then wait until you see what 2023 brings...if we make it that far.

And as we close, be sure you understand that the short-term price movements are essentially meaningless. Yes, they're aggravating and easy to complain about, but over the next 6-12 months—as the curtain is pulled back once again on QE—prices will not be remaining at these artificially-depressed levels. Of that you can certain.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.


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