The Next Regime Playbook
This week, price volatility was the name of the game in seemingly everything, and a prime contributor to that volatility was unexpectedly hawkish chatter out of Federal Reserve bank policymakers.
As Jeffrey Schmid, president and chief executive of the Federal Reserve Bank of Kansas City, put it, “I do not think further cuts in interest rates will do much to patch over any cracks in the labor market—stresses that more likely than not arise from structural changes in technology and immigration policy—however, cuts could have longer-lasting effects on inflation as our commitment to our 2% objective increasingly comes into question.”
Following Schmid’s remarks, market-based December rate cut bets plunged under 45% on the Fed’s seemingly sudden moment of clarity, recalling that the institution still has a price stability mandate to protect.
Yes, in HAI’s view, further Fed rate cuts will have longer-lasting effects on higher inflation. And yes, the Fed’s commitment to a 2% inflation objective is increasingly coming into question. That said, despite the hawkish rhetoric, and regardless of whether further rate cuts come at the December FOMC meeting or later, HAI remains firmly convinced that those cuts—and higher inflation—are both coming.
In HAI‘s view, the reality is more convincing than the occasional hawkish rhetoric, and the reality looks heavily slanted towards accelerated currency debasement and a monetary regime change that both favor higher gold prices.
Meanwhile, this week, the Financial Times reported that “China’s unreported gold purchases could be more than 10 times its official figures as it quietly tries to diversify away from the US dollar.” And in the same article, Jeff Currie, chief strategy officer of energy pathways at Carlyle and Goldman Sachs’ former head of commodity research, confirmed that in a market dominated by central bank purchases, “China is buying gold as part of their de-dollarisation strategy.”
For more insights connecting these dots, HAI invites you to follow the link below to our most recent MWM webinar—The Next Regime Playbook.
The first link is to the webinar, the second is to the accompanying chartbook.
https://mcalvany.com/wp-content/uploads/2025/11/The-Next-Regime-Playbook.pdf
Weekly performance: The S&P 500 was nearly flat, up 0.08%. Gold was up 1.98%, silver gained 4.13%, platinum was up 0.25%, and palladium gained 0.43%. The HUI gold miners index was up 6.16%. The IFRA iShares US Infrastructure ETF was down 0.67%. Energy commodities were volatile and higher on the week. WTI crude oil was up 0.33%, while natural gas gained 4.49%. The CRB Commodity Index was up 0.48%. Copper was up 1.93%. The Dow Jones US Specialty Real Estate Investment Trust Index was off 1.00%. The Vanguard Utilities ETF was down 1.09%. The dollar index was lower by 0.33% to close the week at 99.28. The yield on the 10-yr U.S. Treasury was up 5 bps to close the week at 4.15%.
Have a wonderful weekend!
Morgan Lewis
Investment Strategist & Co-Portfolio Manager
MWM LLC
