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(Kitco News) - Nomi Prins, a geo-macro economist and author of Permanent Distortion, is looking ahead to a Federal Reserve that is no longer tightening.
Prins spoke to Kitco in mid-July at the Rule Symposium Natural Resource Investing 2023 show in Boca Raton, Florida.
Last month the Federal Reserve raised interest rates by another 25 basis points, its eleventh rate hike since early last year. The Fed is eyeing a long-term inflation target of 2%. Data has so far been trending in the Fed's direction and there’s hope that future hikes will not be necessary. Friday’s U.S. nonfarm payrolls showed an increase of 187,000 last month, according to the Bureau of Labor Statistics. The monthly figure was below the market consensus estimates of 205,000.
Prins said the recent rate hike by the Fed was more about messaging. It was the Fed showing that it is still in control, but the rate hike was mostly for show, she said. There will be an interest rate cut, and investors should start positioning themselves.
"We're at a point where whatever the Fed does or doesn't do with another potentially cosmetic rate hike...it's really not going to be as data dependent as it said it would be," said Prins. "We have a plateau on the cost of money. As investors what that means is that we've got a perfect opportunity to use cash that has been on the sidelines. There are trillions of dollars worth to deploy."
Kitco Mining's coverage of the Rule Symposium Natural Resource Investing 2023 was sponsored by G Mining Ventures.
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