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Gold Takes Off On U.S. Fed Policy Shift

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Gold Takes Off On U.S. Fed Policy Shift

A shift in U.S. Federal Reserve policy is among the key drivers of gold’s rise into a new, higher trading range and, potentially, the start of a new gold bull market.
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Fed policy shift pushed gold higher, says analyst

Jim Steel of HSBC talks about the recent rally in gold on CNBC's Closing Bell.
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Still Fed Up? Is a Regime Shift Underway in Central Banking? | Danielle DiMartino Booth

Danielle DiMartino Booth (Mises.org/Booth) worked at New York investment houses before joining the Dallas Bank of the Federal Reserve. Her years working with (relative) Fed Hawk Richard Fisher led to the publication of Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America (Mises.org/FedUp), a full-throated expose of how the Fed benefits elites at the expense of ordinary people. Recorded in Fort Worth, Texas, on 2 June 2018. Includes an introduction by Jeff Deist.
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Why Trump's Fed pick wants to return to the gold standard

Judy Shelton favors an economic policy that the U.S. abandoned in 1971 and that most economists say is antiquated.
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Trump says the Fed is 'out of control'

CNBC's Eamon Javers reports on President Trump comments on Fed chair Jerome Powell's policies.

Federal Reserve UNWINDING BALANCE SHEET – What This Means For Markets, Price Of Gold & Silver

The Federal Reserve announced yesterday during its minutes that it plans to unwind its balance sheet. This has many implications for the markets as it caused an immediate sell off, and it could potentially affect the gold and silver markets and other precious metals. I explain what was announced and how it can be interpreted, and go in depth and even show the Federal Reserve balance sheet. Is this something to panic about or say there is a conspiracy, not quite yet, however it can def develop into something larger if the wrong moves are taken by the Fed or if the market interprets the mixed signals from the fed improperly. This event does however highlight the types of things I look at as far as the macro/global economic markets go and how I interpret it to profit, but ultimately preserve my capital! Further, this is def some good financial information to follow in the future as this can and will have an effect on the stock market, the key is to be able to understand what is being talked about and the implications of certain decisions made by the Federal Reserve. All in all it is a very interesting situation and one to watch as it could result in an economic collapse if handled improperly or lead to a lot more stability and health if handled properly. As I explain in the video, this announcement is just an announcement and doesn’t necessarily mean pour all your money into gold, silver and other precious metals as some are saying, or not doing that at least until we figure out what move is elected by the Federal Reserve!

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FED Holds Rates – The Truth about its Policy – Gold & Silver Rise





Today is Thursday 31st January 2019 and we are commenting on the FED’s decision not to raise interest rates and FED Chair Powell’s statement during the Press Conference.

The FED was established in 1913 and we shall take a look at its current mandate – this is an instruction from Congress providing the FED with its objectives and goals. There are 3:

1. To obtain maximum sustainable employment
2. To achieve stable prices (inflation)
3. To reach and maintain moderate long-term interest rates.

There are just 3 tools by which it can do this:

1. Open market operations – the buying and selling of
government securities to the open market, thereby achieving
the most favourable price – and provides it with great
flexibility which is why this is often the favourite tool.

2. The Discount rate – this is the interest rate charged by Federal
Banks to depository institutions on short term loans.

3. Reserve Requirements – these are the portions of deposits
that banks must maintain either in their vaults or on deposit at
a Federal Reserve Bank.

The FOMC voted unanimously not to raise interest rates and to hold its policy rate in a range between 2.25 percent and 2.5 percent. The Central Bank said it will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate.

Officials also issued a separate statement addressing the balance sheet, saying they expect to operate with an ample supply of bank reserves.

During the Press Conference, Jerome Powell stated:

“The case for raising rates has weakened somewhat”…… I would want to see a need for further rate increases, adding that inflation would be key and that the funds rate is in the committee's range of a neutral rate estimate, a key measure for the Fed.

Also causing some concern for the Fed are geopolitical issues like the ongoing Brexit negotiations and an economic slowdown in China.

Its going to be accommodative in so far as the data suggests. Powell has also left wriggle room to raise rates or increase his balance sheet run off should the economic data be surprisingly more positive than envisaged, though we can all hear quite clearly that certainly for a number of months ahead we are more likely to see more of an accommodative stance as opposed to a tightening one.

Shortly after the announcement and comments, we saw a dramatic rise in Stock markets with the Dow closing eventually up 434 points at 25,014 the Nasdaq up 154 points at 7,183 and the S&P 500 up 41 points at 2,681. Asian markets have generally opened and closed in positive territory and European markets are mixed but with no substantial moves in either direction.

At the time of writing, the dollar index is down o 95.29 but is still a little stronger than we thought it may have fallen to.

Gold is currently standing very close to our prediction at $1,323 and silver has surpassed the psychologically important $16 level again as we said it would and is standing at $16.11.

The markets are currently digesting the news and crunching the numbers. Gold and silver are on a positive trajectory, and technical analysts quote that a move above $1328 will rapidly move gold up to $1337 (June 14th top) and silver markets now having surpassed $16 could indeed have a relatively clear run up to or near the $16.50 level though this may take a few days.

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Philippine Central Bank’s Guinigundo on Monetary Policy, Rate Cuts, Peso

Feb.22 -- Philippines Central Bank Deputy Governor Diwa Guinigundo discusses the possibility of a rate cut, monetary policy, the reduction of bank reserve ratios and the level of the peso. He speaks on “Bloomberg Daybreak: Europe.”

The Fed to the Rescue (w/ Luke Gromen)

Luke Gromen, founder and president of Forest for the Trees, sees an investment opportunity in rising U.S. government deficits. He believes the Fed will be forced to step in with interest rate cuts and quantitative easing, and that this will drive the investment cycle over the medium term. He warns, however, that if the Fed abrogates its duty in the Treasury market as a buyer of last resort, the implications would be profound. Filmed on June 3, 2019 in New York.

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In Investment Ideas, Real Vision seeks out the market's best medium- and longer-term opportunities. The show is designed to provide actionable takeaways for investors with longer time horizons.

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The Fed to the Rescue (w/ Luke Gromen)


Transcript:
For the full transcript visit:
ED HARRISON: Welcome to Investment Ideas. I'm your host, Ed Harrison. Today, we are talking to Luke
Gromen of FFTT.
The Fed is about to do some very funky things with interest rates going forward. Luke tells us what he
believes is going to happen later this year and how you should be positioned in terms of your investments
over the next six to 24 months as a result.
Luke Gromen, it's great to have you here back on Real Vision. And I'm looking forward to talking to you
about what's going on in the economy- both the real economy and also in the markets, especially because
of some of the volatility that we've been seeing. We spoke a little bit earlier before the interview and you
were saying that this is a great opportunity for the Fed to complete a pivot. Tell me- before we go into what
that pivot is going to be, what your investment idea is, given the outlook and why that is.
LUKE GROMEN: Yeah, the bottom line for my investment outlook is I think you want to be long risk with
a weaker dollar coming, weaker than expected. And I think long risk with a pivot towards value versus
growth pivot towards emerging markets versus US and we also like gold, Bitcoin as well.
ED HARRISON: We've had some guests- actually, we had one guest very specifically on the show who
had a somewhat bullish call on risk assets the way that you did. But I think his reasoning was probably a
lot different than your reasoning. Where are you coming from in terms of why you think this is the move to
take?
LUKE GROMEN: So, where we're coming from is, is we're seeing a number of things play out in markets
that are really the culmination of a number of factors we've been watching and writing about over the past
five years. And so, if we take a step back, about five years ago, global central bank stopped buying treasury
bonds, or stopped adding to their treasury bond portfolios on net. And what this ultimately did is forced the
global private sector to begin financing the US government. And ironically, you would think that would be
bad for the dollar. But what it actually started to do was squeeze out global dollar markets at that point.

GOLD WEBCAST - Gold price endures heavy sell-off on positive US jobs data

The BullionDesk.com Gold Webcast - May 1st 2015

While the gold price remains fairly unchanged for the week, the near two and a half percent liquidation seen in the previous session will be the story as we head into the weekend.

The liquidation came after the strongest US jobless claims figure in 15 years was released yesterday which signals that slack in its labour market is waning.

This is considered important as earlier this week the US Fed changed its stance on the normalisation of monetary policy, shifting the dependency now almost exclusively on inflation data and the health of the domestic jobs market and removing any language referencing time scales.

While the current liquidation suggests that gold traders have interpreted both the statement and yesterday's jobs figure as hawkish on the raising of interest rates, next week's non-farm payroll report will be crucial for that theme.

More gold price news can be found at
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Fed cuts rate by 0.25% for first time since 2008: Analysis from New York Thomson Reuters Angela Moon

미 연준 기준금리 11년 만에 첫 인하: 뉴욕 로이터 연결

How is the market reacting to the Fed's first interest rate cut since the financial crisis in 2008? What are analysts saying? Let's go live to Wall Street. Joining us live is Angela Moon, senior market correspondent for Thomson Reuters New York.

Angela, first off, how is the market reacting to Fed Chairman J. Powell's latest rate cut of 25 basis points? There had been speculation that it would be 50 basis points.

Well, Connyoung, some major moves we saw on Wall Street today. U.S. stocks closed sharply lower with the Dow Jones industrial average sinking to a triple-digit loss, its biggest one day fall since May 31st of this year, the S&P also down 1.1 percent and Nasdaq losing 1.2 percent as like you said investors were disappointed that although the Federal Reserve cut interest rates it refrained from suggesting further rate cuts were on the way.

J. Powell's remarks at the press conference just a few hours ago
he said there are really two portions to think about this.
First, being the U.S. economy is still looking pretty good - data since the June meeting has shown that. But, that they need to cut rates because of the issues abroad.
What does he mean, really? It makes us wonder what his next step is going to be.

Right, like you said, Connyoung, with U.S. unemployment still at a fifty year low and inflation subdued, the Fed’s focus was rather on the potential threats to the record eleven year economic expansion posed by President Trump’s trade policies and the resulting slowdown in global economic growth. The rate cut today was really all about Fed efforts to cushion the economy from the effects of President Trump’s trade war with China. Next steps? Well, your guess is as good as mine.

We got those comments from Janet Yellen a few days ago talking about the headwinds that are forming outside of the U.S. How much of the concern that we're seeing coming from the Fed has to do with the big trade overhanging. If there is in fact some kind of a deal reached between U.S. and China - perhaps in mid-September - could we perhaps see the Fed shift?

That remains to be seen. Chairman Powell, at a news conference after the decision was released, called the rate cut a “mid-cycle adjustment” and didn’t rule out more reductions. But he also said it was “not the beginning of a long series of rate cuts” because that path is only followed at times of more severe economic distress. So it’s really uncertain at this point and we know that the one thing that the WAll Street dislikes more than anything is uncertainty.

How do analysts there foresee this rate cut or even perhaps more to come in the next months impacting the global economy?

Analysts are saying that the biggest surprise here is what is not being said: that There is nothing in the statement about growth cooling here in the U.S., and there is not a whole lot to suggest another rate cut is coming down the pike,”

The threat of a recession has historically been the main catalyst for monetary easing, but today we saw a Fed hanging its hat solely on inflation and the global economy. So those two factors will be closely watched by all for the remainder of the summer.

#Fed #cuts #rate #Analysis #Reuters

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Money, Banking and the Federal Reserve

Thomas Jefferson and Andrew Jackson understood The Monster. But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.

Dedicated to Murray N. Rothbard, steeped in American history and Austrian economics, and featuring Ron Paul, Joseph Salerno, Hans Hoppe, and Lew Rockwell, this extraordinary documentary is the clearest, most compelling explanation ever offered of the Fed, and why curbing it must be our first priority.

Alan Greenspan was not, we're told, happy about this 1996 blockbuster. Watch it, and you'll understand why. This is economics and history as they are meant to be: fascinating, informative, and motivating. This movie is changing America.

Rally for Silver and Gold Continues as Fed Talks Dovish

Silver and gold continued to rally today, as the Fed meeting revealed no policy change, but more dovish talk about not raising rates, and potentially ending QT soon.

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Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.

ECB Rate-Cut, Gold Sell-Off; Don't Expect FED Rescue Before Election ▸ RESET w/ FMX Connect

Gold and metals head lower sell-off as the dollar strengthens following the ECB rate-cut, making for a somewhat surprising sell-off. We discuss this and the declining Euro at large in today's RESET with Vince Lanci of FMX Connect. Lanci believes that today's sell-off was surprising in the sense that the markets had mostly anticipated this or similar action from the ECB, but instead of a rally leading up to the announcement and a continued rally following it, we saw a rally before and a sell-off after, a sign that the markets are buying the rumor, selling the news as opposed to buying the rumor, buying the news as we've previously seen. Markets seem to be signaling that the weaker Euro and global slowdown are not in fact life-threatening to the Euro; that, combined with a stronger dollar made way for the sell-off.

In regards to the declining Euro, although a bit conspiracy-minded Lanci admits that he suspects it is in Germany's best interest to have a slow, orderly decline and depreciation of the Euro, since it helps their exports and economy, and is less shocking to the markets.

Despite gold's sell-off, Lanci advises that if you hold gold you're fine since gold prices are currently well within a range. He believes you should be looking at buying physical gold, and also points out that safe-haven demand will return to gold should the Euro react negatively to any news.

As a side note and testament to physical gold's value, Lanci points at the Libor scandal as a sign of the changing zeitgeist or paradigm shift in the markets, with investors believing short people, buy things. People and human-driven investments are riddled with scandal, policy abuse and mismanagement, and these less trustworthy investments are being swapped for reliable investments such as commodities.

Lastly, Lanci reminds us not to expect any further relief or easing from the FED before the U.S. elections this year- but of course if you watch Kitco News you already knew that! (Kitco News, July 5, 2012) --- Agree? Disagree? Join the conversation @ The Kitco Forums and be part of the premier online community for precious metals investors: -- Or join the conversation on social media: @KitcoNewsNOW on Twitter: --- Kitco News on Facebook:

Extreme Monetary Policy, a Profits Recession, and Asset Prices Floating Higher (w/ Ken Grant)

Ken Grant, founder of General Risk Advisors, says that asset prices have been buoyed by extreme monetary policy since the global financial crisis, and will continue to float higher. He argues that even if the real economy slows substantially, the capital economy will continue its historic expansion for the next few quarters. Grant also provides investors with a game plan — namely, be wary of the credit markets, and buy the dips. Filmed on September 12, 2019 in New York.

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Real Vision™ is the destination for the world’s most successful investors to share their thoughts about what’s happening in today's markets. Think: TED Talks for Finance. On Real Vision™ you get exclusive access to watch the most successful investors, hedge fund managers and traders who share their frank and in-depth investment insights with no agenda, hype or bias. Make smart investment decisions and grow your portfolio with original content brought to you by the biggest names in finance, who get to say what they really think on Real Vision™.

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Extreme Monetary Policy, a Profits Recession, and Asset Prices Floating Higher (w/ Ken Grant)


For the transcript visit:

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Stock Market Video: Fed Policy Statement Analysis, Dollar Drops

The markets floated into the FOMC Policy Statement at 12:30pm ET. As soon as it was released, the Dollar fell on their comments and the markets jumped back to the 52 week highs hit yesterday. The markets are now quieting down on anticipation of the press conference by Ben Bernanke at 2:15pm ET. As the Dollar fell on the Federal Reserve comments, oil, gold and silver all jumped higher. The weak Dollar policy continues with the Federal Reverse at the helm.

Rate Hike or No, Dec. Fed Meeting Will Be Bullish for Gold – Peter Schiff’s Gold Videocast

At 7:30, Peter misspoke. He intended to say that gold could have a short-lived, “head fake” price dip if a December rate hike were announced. This would provide another buying opportunity. However, he ultimately believes gold will rally after the Fed’s meeting, no matter the announcement.

Peter Schiff's Gold Videocast 11/12/2015
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0:10 – The price of gold has declined almost $100 in the last month. This is an excellent opportunity to buy gold for those who were afraid of buying during the rally.

0:45 – Gold traders started selling when the Federal Reserve failed to remove the possibility of rate hikes in December, as well as the better-than-expected non-farm payroll report for October.

1:45 – There are two possibilities for gold traders to consider: the Fed either will or will not raise interest rates in December. Both options are bullish for gold.

2:30 – Most traders thinks higher interest rates will hurt the price of gold.

3:00 – The gold market has already discounted the gold price based upon expectations of a rate hike.

3:31 – If the Fed does raise rates a small amount in December, they will reassure the markets that ongoing rate hikes will be extremely slow and measured.

4:40 – Once the Fed begins to raise interest rates, the market will begin to anticipate the next easing cycle.

5:13 – This period of economic expansion and recovery will end sometime in 2016.

6:00 – The US dollar has already rallied for the same reason gold has declined: the anticipation of rising interest rates.

6:25 – When Alan Greenspan last raised interest rates at a “measured pace,” gold rallied the entire time, while the dollar sold off. It’s a myth that higher interest rates would automatically be bearish for gold.

7:00 – High real interest rates would be bearish for gold, like the economic environment under Paul Volcker. That is not going to happen. Even with a slight rate increase from the Fed, the real rate will still be negative.

8:03 – The other possibility is that the Fed doesn’t raise interest rates, proving the rumors of a rate hike were false. If that happens, gold sellers will reconsider their assumptions about Fed policy.

Enough Already: Fed's Powell Hints Rate Hikes May Finally Be Levelling Off

Reuters reports the Federal Reserve on Wednesday signalled it's nearing an end to its interest-rate hikes.
Fed Chair Jerome Powell said the Fed’s policy rate is now “just below” a level that neither brakes nor boosts a healthy economy.
Stocks and interest-rate futures jumped in response.
Powell’s dovish shift came as U.S. President Donald Trump publicly berated Powell for rate hikes.
Trump sees interest rate hikes as undercutting his economic and trade policies.
Tuesday, Trump told the Washington Post just yesterday that he is “not even a little bit happy” with the Fed chief.



This video was produced by YT Wochit Business using

Is the Federal Reserve Caught Between a Rock and a Hard Place? - 07/26/2019

As of 4:04 PM EDT the countdown to the FOMC meeting is four days, 21 hours, 56 minutes and 24 seconds away, this according to the countdown clock on the CME’s FedWatch tool. This tool is also predicting that there is an 80.6% probability that the Fed will announce and implement ¼% rate cut, and a 19.4% probability that they will cut their Interbank Fed funds rates by ½%.

In other words, they are predicting that there is a 100% probability that the Fed will announce a rate cut. Therefore, the most important questions that need clarification is first; how deep will the cut be, and second; will they clarify how many rate cuts they intend to implement throughout the remainder of the year.

According to Bloomberg “Given the latest data on the U.S. economy, the Federal Reserve may well be tempted to adopt a less dovish posture on interest rates. But with markets already counting on a 25 basis-point rate cut next week, the Fed’s challenge will be to make clear exactly how it’s thinking about the outlook for the next year.”

The data they are referring to is today’s GDP report which is indicating that the economy is on an upward trend with estimated second-quarter growth at 2.1% at a seasonally adjusted annual rate. This is above the estimated second-quarter growth in GDP at 1.8%.

This data along with this week’s strong growth in U.S. equity indexes taking the S&P 500 and the NASDAQ composite to new record highs is much stronger than the data used for the initial assessments and statements by Jerome Powell earlier this month.

The Federal Reserve will be placed in a delicate situation if they adopt a less dovish stance than the market has currently factored in. As Conor Sen wrote in his recent Bloomberg opinion article “…the Fed has two difficult tasks next week: determining policy, and communicating that without disrupting markets. The outlook has shifted since June, when global economic data and sentiment among U.S. business leaders were moving in the direction of more rate cuts. Yet fixed income traders appear to be ignoring the change. Should the Fed feel the need to let down those hoping for multiple rate cuts, it will need to tread lightly.”

Regardless of the final decision announced by the Federal Reserve next week, there is one certainty; until the Fed announcement next week there is uncertainty as to what the final outcome will be. That being said market participants are already plotting their strategies for any potential outcome that is disclosed on July 31st.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

What's ahead for the tech sector?

Tech ended year as market's best-performing sector. With CNBC's Morgan Brennan and the Fast Money traders, Steve Grasso, Karen Finerman, Dan Nathan and Guy Adami.

2019 was a year that began with investors courting a bear market and ended with the biggest gains from stocks since 2013.

Twelve months ago, few could have imagined the S&P 500 delivering a gain of more than 28% in 2019. It was a performance that flirted with the 31% gain of 1997, and one that came very close to topping the 29.6% return of 2013.

The tech-heavy Nasdaq did even better, posting a gain of 35% as money flowed to the tech giants, cementing Apple and Microsoft’s position as trillion-dollar companies. The Dow Jones Industrial Average was up 22%.

It was a year filled with fears that were never realized: a global economic slowdown, disruptive trade wars and potential missteps from Federal Reserve policy. The year also revealed an unforeseen boom in the tech sector that drove the major stock indexes ever higher.

Starting from a low:

One of the key’s to the market’s 2019 success was starting from a low base.

A steep sell-off in December 2018 left the S&P 500 just 0.2% from officially hitting a bear market, defined as a 20% decline from its closing peak.

The S&P 500 ended 2018 with a loss of more than 6%, closing at 2,485.74 on Dec. 31, 2018. In the final hours of trading in 2019, it’s trading around 3,220.

For perspective, the S&P is finishing 2019 about 10% above 2018′s high of roughly 2,900, which is close to the average return for the S&P 500 over 90 years of 9.8%.

Help from the Fed:

Much of the stock market’s gains in 2019 can be attributed to a dramatic policy shift at the Federal Reserve.

The Fed raised rates four times in 2018, including a December 2018 hike that took its key rate to 2.5 percent.

It was a different story in 2019, when after a change of heart the Fed lowered rates three times. Falling interest rates sent investors on a quest for yield, forcing more money into stocks expected to appreciate, pay dividends or both.

The Fed’s key rate is now back to a range of 1.50% to 1.75%. Additionally, the Fed has said it expects to leave rates unchanged for 2020, giving investors clarity on top of what remain historically low rates.

Trade tiffs:

Fed Chairman Jerome Powell described the central bank’s moves as “insurance” rate cuts. The Fed wanted to ensure a slowing global economy didn’t drag down the U.S.

One of the biggest uncertainties for global economic growth was President Donald Trump’s trade negotiations with China as well as the re-crafting of the North American Free Trade Agreement with Canada and Mexico.

Indeed, trade war headlines dominated the financial news throughout most of the year. Trump’s tariffs and threats of more tariffs often sent indexes frightfully lower. Then his pronouncements, usually by tweet, that deals were coming together, would send markets back even higher.

Over the course of the year, however, the trade war had only transient effects on the stock market.

As the year came to a close, the House passed the United States-Mexico-Canada Agreement, which is Trump’s replacement for NAFTA, and the Senate is expected to pass it soon. Also, the Trump administration has come to a phase one trade agreement with China.

When U.S. and China officials sign the deal in the coming weeks, it hardly means an end to what are sure to be difficult negotiations, but the initial agreement has marked a pause in trade war escalation, and that has sharply boosted markets.

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