Dallas Fed's Lori Logan has signaled a potential shift away from targeting the Fed funds rate. As the Fed funds market has become inactive and is no longer a true market, targeting a traded repo rate would provide better real-time feedback on liquidity and policy implementation.

Arthur Laffer frames the creation of the Fed as the government taking over a previously private monetary system. He notes that from 1776 to 1913, with a private money system, long-term inflation was zero. Since the Fed's creation, the price level has risen 35-fold, demonstrating the instability introduced by government control.

Even if US inflation remains stubbornly high, the US dollar's potential to appreciate is capped by the Federal Reserve's asymmetric reaction function. The Fed is operating under a risk management framework where it is more inclined to ease on economic weakness than to react hawkishly to firm inflation, limiting terminal rate repricing.

The US dollar reached its peak global dominance in the early 2000s. The world is now gradually shifting to a system where multiple currencies (like the euro and yuan) and neutral assets (like gold) share the role of reserve currency, marking a return to a more historically normal state.

The combination of restrictive trade policy, locked-in fiscal spending, and a Federal Reserve prioritizing growth over inflation control creates a durable trend toward a weaker U.S. dollar. This environment also suggests longer-term bond yields will remain elevated.

The Federal Reserve can tolerate inflation running above its 2% target as long as long-term inflation expectations remain anchored. This is the critical variable that gives them policy flexibility. The market's belief in the Fed's long-term credibility is what matters most.

Citing the 1940s playbook, future administrations may force the Fed to fix interest rates at low levels. This makes government borrowing cheap, enabling massive spending to revitalize industry and defense, similar to how war efforts were financed.

The strategic value of commodities in a modern portfolio has shifted from generating returns to providing a crucial hedge against two growing threats. These are unsustainable fiscal policies that weaken currencies ('debasement risk') and the increasing use of commodities as geopolitical weapons that cause supply disruptions.

Alan Greenspan viewed a rising gold price as a market signal that monetary policy was too loose and interest rates were too low. Today's soaring gold price, viewed through this lens, suggests the Federal Reserve is making a significant policy error by considering rate cuts.