On the heels of the Fed’s decision to keep interest rates steady with no further rate hikes in 2019, gold rallied as the US dollar weakened.

Fed Failure
By Bill Fleckenstein President Of Fleckenstein Capital
(King World News) – Last night FedEx dropped a bit of a bomb when it warned that, among other things, world growth was slowing down. Consequently, its stock price fell about 5%. That set the tone for a weaker tape, as the market awaited the FOMC communique, which turned out to be a massive admission of failure, though naturally they didn’t say it that way. Instead, they stated that the economy was slowing, QT would end in September (the dollar amount will be reduced starting in May), there would be no hikes in 2019, and just one in 2020 (don’t bet on that!)…

They Should Have Kept Their Trap Shut
In other words, post-QE “normalization” was a failure, and that is because QE didn’t do what they expected it to. It just caused inflation of assets and prices, not a self-sustaining recovery that could withstand the reversal of all the policies they had pursued to try to create one in the first place.

In summary, the Fed can only ease, not tighten, because you can never willingly leave QE, NIRP, or ZIRP. Thus, they are trapped and can never unwind their policies, as I (and others) have maintained all along. Now the question is when do people who worship these central planners start to realize that they do not know what they are doing, and in fact are wildly dangerous academics?

To Top It Off?
In the wake of the release, the indices reversed and turned green, led by the Nasdaq, which gained 1% before the rally fizzled, and the market wound up about flat on the day. I tried not to prejudge (or get too excited about) what the market would do today, but a failure around the FOMC meeting was exactly what I was rooting for. Now we need to see if we can get some downside acceleration one day soon. Perhaps we will learn more when we see the reaction to tonight’s earnings (or lack thereof) from Micron.…..more here