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Fed defends 'pedal to the metal' policy and is not fearful of asset bubbles ahead (Reuters)

The Fed launched unprecedented support when the coronavirus pandemic hit the United States earlier this year, slashing interest rates and unleashing asset purchases which has pushed bond yields to lows and sent equity prices to record highs. Still, Powell said the decade-long U.S. economic expansion, which ran prior to the pandemic hitting growth, had included both quantitative easing and low interest rates but was “notable for the lack of the emergence of some sort of a financial bubble.”…

Gold prices log a third straight gain, then extend gains after Fed policy statement (MarketWatch)

The FOMC announcement “giving off an even more dovish signal is going to help gold break out of this consolidation phase it has been in for the past several weeks,” Peter Spina, president and chief executive officer at GoldSeek.com, told MarketWatch. “It may take some weeks still with some price consolidation finishing up here, but I expect gold to break back above $2,000” in the fourth quarter and set fresh record highs as we close out the year. https://www.marketwatch.com/story/gold…

Gold rises as investors bet on dovish U.S. Fed stance (Reuters)

"What we're probably seeing building in gold is expectation that the Fed is going to be more dovish than in the past, and the realization that we're seeing slightly more inflationary pressure than anticipated," said OANDA analyst Craig Erlam. While the Fed does not need to announce stimulus measures now, it will need to lay the groundwork for potential stimulus later, he added. https://www.reuters.com/article/idUSL4N2GD22V  

Fed expected to raise economic forecasts, extend vow to keep rates low

The two-day meeting is the U.S. central bank’s first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods, such as now, where it is running below that target. The strategy means the Fed will not take its foot off the monetary gas pedal even if unemployment continues to drop at a faster-than-expected pace. Fed officials don’t appear ready to translate that framework into an explicit promise to keep the central bank’s key overnight lending rate…

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