(Kitco News) Gold rallied more than 1% on the day as Federal Reserve Chair Jerome Powell said he hears America’s inflation worries “loud and clear” while still viewing these price spikes as temporary.
The August Comex gold futures were last trading at $1,826.80, up 0.93% on the day.
Powell faced a swarm of questions surrounding high inflation and what the Fed plans to do about it during his testimony before the U.S. House Committee on Financial Services on Wednesday.
The Fed chair carefully maintained his “transitory” inflation stance while pointing out that the central bank is “anxious” like everyone else to see inflation pass through and return to normal. “Right now, inflation is not moderately above 2%; it is well above 2%. The question is, where does it leave us six months from now? It depends on the path of the economy,” Powell said.
Powell noted all the incoming macro data the Fed monitors have been “higher than expected and hoped” but still “consistent” with Fed’s view.
He clarified that most of the price increases have been coming from a small group of goods and services directly tied to the reopening of the economy. “It’s new cars, used cars, rental cars, hotels, airplane tickets,” he said.
This inflationary spike revolves around semiconductor shortages, people using less public transportation, and having more money to spend.
The latest June inflation numbers once again surprised on the upside with the annual inflation running at 5.4% and the core measure, which excludes the volatile food and energy components, climbing to 4.5% — the largest increase since November 1991.
“It’s just the perfect storm of high demand and low supply, and it should pass unless we think there’s going to be a multi-year shortage of used cars in the United States,” Powell said.
But before getting too confident, Powell said he’d like to see more narratives like the lumber prices one — where prices climbed really high and then came back down.
“Lumber prices went up and then went down. We think that will be the pattern for some of these things. I am not saying prices will come down. But we should see the level of inflation return to more normal levels,” Powell stated. “That’s the kind of thing that we’d like to see a lot more of.”
Powell added that the Fed monitors the inflation story very carefully and will communicate any shift in thinking well in advance.
“If we were to see that inflation remains high and materially above our target for a period of time … we would absolutely change our policy as appropriate.”
Powell also made sure that he remained dovish throughout his testimony, noting that the U.S. is a long way from full employment. “The unemployment rate is at 5.9%, and the true number is actually substantially above that. So we’ve got a ways to go.”
The Fed chair did reiterate that talks around the kind of “substantial further progress” required before beginning to taper the $120 billion a month asset purchases will continue during the next several FOMC meetings.
Powell talks CBDCs, stablecoins, and crypto
According to Powell’s testimony, the Fed will be releasing its highly anticipated research paper on the central bank digital currency (CBDC) in early September. The report will touch on CBDCs as well as stablecoins and cryptocurrencies, with a focus on regulation.
“We’re going to address digital payments broadly,” Powell said. “So that means stablecoins. It means it means crypto assets. It means the CBDC. That whole group is at a critical point in terms of the appropriate regulation.”
One concern is that stablecoins are gaining popularity but are not regulated, Powell added.
“Stablecoins are a lot like money market funds or bank deposits,” he said. “We have a pretty strong regulatory framework around bank deposits or money market funds, but that doesn’t exist for stablecoins. And if they’re going to be a significant part of the payments universe, which we don’t think crypto assets will be, but stablecoins might be, then we need an appropriate regulatory framework, which frankly we don’t have.”
When talking about the U.S. dollar as the reserve currency, Powell once again stated that there is no good competitor out there. “We are not in danger of losing [the reserve status], certainly not to China.”
Powell has another appearance scheduled for Thursday as he is scheduled to testify before the U.S. Senate Banking Committee at 9:30 a.m. ET time.
Key COVID-19 numbers in the Ottawa area today – CBC.ca
- Ottawa reports three more COVID-19 cases Tuesday.
- No local health authority reports a COVID-19 hospital patient.
- A new outbreak makes up most new cases in the Belleville area.
Today’s Ottawa update
Ottawa Public Health (OPH) reported three more COVID-19 cases Tuesday and no new deaths. It removed two cases from its total, as it’s been doing from time to time as it double-checks its database (often due to residents living in other regions).
There are 42 known active cases in the capital.
Its medical officer of health said last week getting vaccinated and following familiar rules such as masking and distancing can stop COVID-19 from taking hold again.
Numbers to watch
4: The weekly incidence rate, a rolling seven-day total of new COVID-19 cases expressed per 100,000 residents.
0: The number of Ottawa residents being treated for COVID-19 in an Ottawa hospital.
0: The number of COVID-19 patients reported by each of the Ottawa-Gatineau area’s seven health authorities as of noon ET Tuesday. Two of them have yet to report their long weekend numbers.
1.16: The number of people infected by a single COVID-19 case, or R(t). A number under one is a sign the spread is slowing.
0: The number of active COVID-19 outbreaks in Ottawa.
Across the region
There are currently fewer than 100 known active cases in eastern Ontario and western Quebec.
Most local health units are generally reporting an average of a new case or two per day and, in eastern Ontario, have met the province’s fully vaccinated threshold for the next reopening step.
Hastings Prince Edward Public Health reported eight more cases Tuesday in its first update since Friday, six of them linked to an outbreak in Frankford, north of Trenton.
The health unit for the Renfrew County area reported six more cases over the long weekend and in the Kingston area, four more cases.
Ontario is currently under Step 3 of the province’s pandemic reopening plan. All of Quebec is under green zone rules.
Blizzard's President Brack Steps Down – Dark Horizons
J. Allen Brack, president of “Warcraft” and “Overwatch” creator Blizzard Entertainment, is leaving the company “to pursue new opportunities”.
Brack’s exit comes less than two weeks after Activision Blizzard was sued by the California Department of Fair Employment and Housing over the company’s alleged “pervasive frat boy workplace culture.”
In recent days, multiple horrific stories have emerged in the press of explosive allegations by employees who claimed to have been continuously subjected to sexual harassment, psychological harassment and discrimination within the company. A large crowd of more than a thousand employees rallied outside the company’s campus this past week, the incident making headline news around the world.
Brack was named in the lawsuit as being among the company executives who were allegedly aware of the systemic misconduct.
EVP of development Jen Oneal and EVP of platform and technology Mike Ybarra have now been appointed co-leaders of Blizzard. Oneal joined Blizzard in January, Ybarra came onboard from XBOX in 2019. Both have more than three decades of gaming industry experience between them.
A short statement released by the company’s COO Daniel Alegre says: “Both leaders are deeply committed to all of our employees; to the work ahead to ensure Blizzard is the safest, most welcoming workplace possible for women, and people of any gender, ethnicity, sexual orientation, or background; to upholding and reinforcing our values; and to rebuilding your trust.”
Ontario reports single new COVID-19 case in Ottawa Tuesday – CTV Edmonton
Public Health Ontario is reporting a single new case of COVID-19 in Ottawa Tuesday.
A full, local snapshot from Ottawa Public Health is due this afternoon. Daily case counts from OPH often differ from those provided by Public Health Ontario because the two health agencies pull data for their respective daily snapshot reports at different times of the day.
Across the province, Public Health Ontario added 164 new infections on Tuesday and said one more Ontarian had died due to COVID-19. Another 151 cases are now considered resolved.
There was no formal update on the holiday Monday, but the province released the figures Tuesday, reporting an additional 168 new cases and another new death.
Across eastern Ontario, provincial health officials added five additional cases in the last two days.
COVID-19 VACCINES IN OTTAWA
Ottawa Public Health updates vaccine numbers on Mondays, Wednesdays and Fridays. As of Monday:
- Ottawa residents with 1 dose (12+): 767,352
- Ottawa residents with 2 doses (12+): 661,965
- Share of population 12 and older with at least one dose: 83 per cent
- Share of population 12 and older fully vaccinated: 72 per cent
- Total doses received in Ottawa*: 1,333,790
**Total doses received does not include doses shipped to pharmacies and primary care clinics, but statistics on Ottawa residents with one or two doses includes anyone with an Ottawa postal code who was vaccinated anywhere in Ontario.
CASES OF COVID-19 AROUND THE REGION
- Eastern Ontario Health Unit: One new case Monday, zero new cases Tuesday
- Hastings Prince Edward Public Health: Zero new cases Monday, two new cases Tuesday
- Kingston, Frontenac, Lennox & Addington Public Health: One new case Monday, zero new cases Tuesday
- Leeds, Grenville & Lanark District Health Unit: Zero new cases Monday, one new case Tuesday
- Renfrew County and District Health Unit: Zero new cases Monday and Tuesday
This story will be updated. CTV News Ottawa will have the latest as it becomes available.
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