📈 Dec US Dollar DXZ25 : Monthly

Fed Watch For Dec 10 Rate Decision

as of Oct 29, 2025

📊 Debt To GDP Ratios

⚠️ Wednesday : 2 Rate Decisions

🔷 US Inflation Rate Rises Less Than Expected

The US annual inflation rate rose to 3.0% in September from 2.9% in August, slightly below market expectations of 3.1%. 

It was the highest rate since January, mainly due to a jump in energy prices. 

Meanwhile, core inflation eased to 3.0% from 3.1%, while monthly headline and core CPI increased 0.3% and 0.2%, respectively.

🔷 US Dollar Update

📉 December Silver SIZ25 : UPDATE

Global Market Update

• China published fourth plenum communique: approved five-year plan, and aiming for a 'big increase' in the level of tech self-reliance.
• European equities are mostly higher, whilst US equity futures are mixed; TSLA -3%, IBM -7.2%, Quantum stocks +10%.
• DXY is flat, Antipodeans lead whilst havens lag in quiet trade.
• Bonds are pressured as the risk tone sees pockets of improvement; decent UK auction sparked little move in Gilts at the time.
• New Russian sanctions push crude benchmarks higher, XAU continues to consolidate.
• Looking ahead, Existing Home Sales (Sep), EZ Consumer Confidence Flash (Oct), Canadian Retail Sales (Aug), Australian Flash PMIs (Oct), (Suspended Releases: US Weekly Claims), CBRT Policy Announcement, CCP 4th Plenum (20th-23rd), European Council (23rd-24th). Speakers including ECB's Lane, Fed's Bowman & Barr (Fed on Blackout). Earnings from Intel, American Airlines, Freeport McMoRan, Blackstone, T-Mobile US & Valero Energy.

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TARIFFS/TRADE

• US President Trump's administration is considering a plan to restrict globally produced exports to China made with or containing US software, while the new export controls under consideration by the US could curb exports on a wide range of goods to China, and the plan would retaliate against China's rare earth export restrictions if adopted, according to Reuters sources. However, the sources said that the measure, details of which are being reported for the first time, may not move forward, and administration officials could announce the measure to put pressure on China but stop short of implementing it, while narrower policy proposals are also being discussed.
• US President Trump said a long meeting is scheduled with Chinese President Xi in South Korea, and he thinks something will work out, while he thinks he will make a deal with Chinese President Xi and could make a deal on soybeans. Trump added that they could even make a deal on nuclear and thinks he will talk to Xi about Russian oil, as well as ending the war in Ukraine. Trump also commented that tariffs are vital and that they might go to the Supreme Court for the tariffs case.
• US Treasury Secretary Bessent said he was leaving on Wednesday for Malaysia to meet with Chinese officials and is hoping they can iron things out, while he will have two days of fulsome talks with Chinese officials in Malaysia. Bessent said it would be a shame to waste the first meeting of Trump and China's Xi during Trump's second term, as well as noted that he is contemplating the US and allies' next move if China talks fail.
• US Treasury Secretary Bessent said any export controls regarding China will be in coordination with G7 allies.
• Taiwan US envoy said they are close to reaching a trade agreement with the US.
• China Commerce Ministry says Vice Premier Lifeng will hold talks with the USA regarding trade in Malaysia within 24-27 October.

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EUROPEAN TRADE

EQUITIES

• European bourses (STOXX 600 +0.2%) are mostly firmer but with some slight underperformance in the DAX 40, which is being pressured by post-earning losses in SAP (-2.4%).
• European sectors are mixed. Energy takes the top spot, joined closely by Consumer Products; the latter boosted by upside in Kering (+9%) after the Co. reported strong Q3 metrics. To the downside, Evolution (7%) weighs on the Travel & Leisure sector.
• US equity futures are mixed; the RTY gains, whilst the ES & NQ hold around the unchanged mark. Key pre-market movers: Tesla (-3%, profits slip despite reporting record rev.), IBM (-7%, top- and bottom-line beats but cloud rev. growth slows), Quantum stocks (US President Trump's administration is in talks to take equity stakes in quantum computing firms).
• Anti-obesity drug prescribing shows signs of levelling off, via Axios.

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FX

• USD is slightly firmer/flat and trades within a very narrow 98.92-99.10 range; lack of data releases and Fed speak (due to blackout) has led to quiet trade for the Dollar. However, this should all pick-up on Friday, with the BLS set to release US CPI, despite the government shutdown. There have been some important trade-related newsflow recently; Reuters reported that the Trump administration is mulling a plan to restrict globally produced exports to China made with or containing US software. Though the piece suggested that the US may not go forward with the plan, and may only be used to apply pressure on China amid trade negotiations. On that, Treasury Secretary Bessent is set to meet with China's VP in Malaysia over the weekend; Bessent said he hopes "to iron things out".
• EUR is flat/incrementally lower vs USD. EUR/USD is currently trading in a 1.1591-1.1614 range, which is towards the mid-point of Wednesday's bounds. Overnight, ECB's Kazaks said "it may well be the case that the next rate move could as easily be a hike as a cut" – comments which are in contrast to Villeroy (cut more likely than hike) and Kocher (sees equal chance).
• JPY is right at the foot of the G10 pile, alongside haven peer CHF; nothing really driving the "risk-on" sentiment seen in the FX-space today, but perhaps some focus on US Treasury Secretary Bessent's meeting with China VP this weekend – it is worth caveating that other trade-related reporting has been broadly negative (discussed above). Newsflow out of Japan has been very light, with USD/JPY largely moving at the whim of the Dollar; currently trades at the upper end of a 151.82-152.66 range, a peak which marks a WTD best. Further upside could see a breach back above 153.00 and then to the 10th October high at 152.27.
• GBP is flat, taking a breather following the prior day's subdued trade in the aftermath of a softer-than-expected inflation report. Newsflow since has been incredibly light, and this has been reflected in Cable, which currently trades in a narrow 1.3329-1.3362 range; at the mid-point of Wednesday's confines.
• Antipodeans are at the top of the G10 pile, but little fresh behind the strength; though upside which seemingly coincided with an early-morning uptick in copper prices.
• PBoC set USD/CNY mid-point at 7.0918 vs exp. 7.1205 (Prev. 7.0954)

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FIXED INCOME

• USTs were softer by a tick or two in APAC trade and have continued to dip into and throughout the European morning. Pressure a function of the pockets of improvement in the risk tone as the US-China situation isn't perhaps as bad as first thought, a point added to by the fact the US' Bessent and China's He are still set to meet in Malaysia from tomorrow.
• Thus far, down to a 113-16+ trough with downside of nine ticks at most and approaching the 113-10 WTD base. Ahead, Fed's Barr and Bowman are scheduled, but the blackout means this will be a non-event. Data-wise, the shutdown continues to limit, but any comments from the KC survey on inflation are of note ahead of Friday's CPI.
• EGBs followed suit to the above. Bunds below the 130.00 mark, matching the 129.24 low from Tuesday, but yet to test 129.76 from Monday. EGBs hit by the better tone around trade as outlined above. Further pressure for fixed income also stemming from the continued advances in energy prices, biasing yields higher.
• Gilts, unsurprisingly, saw a softer start after closing with gains of nearly 60 ticks on Wednesday. Gilts opened lower by a handful of ticks and despite a brief move into the green have since conformed to the bearish bias and trade lower by 15 ticks, an amount comparable to Bunds.
• UK sells GBP 4.75bln 4.125% 2035 Gilt: b/c 2.83, average yield 4.00%, tail 0.7bps

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COMMODITIES

• Crude benchmarks are strong today as the US placed new sanctions on Russian oil companies. After an initial c. USD 1.30/bbl move late on Wednesday, WTI and Brent trended higher during APAC trade from USD 59.72/bbl and USD 63.86/bbl respectively to peak at USD 60.90/bbl and USD 65.04/bbl. Currently, benchmarks are continuing to trade higher to new session highs at USD 61.79/bbl and USD 65.96/bbl respectively. To recap, late in Wednesday's session, the US placed sanctions on Russian oil companies Rosneft and Lukoil because of "Russia's lack of serious commitment to a peace process".
• Spot XAU is a little firmer and is currently oscillating in a tight USD 4066-4137/oz band as the metal consolidates following Tuesday's selloff from record highs.
• Base metals traded rangebound during the APAC session but broke out of recent ranges following Antofagasta copper production and confirmation of a China-US meeting in Malaysia. 3M LME Copper oscillated in a tight c. USD 50/t range during APAC trade before trending higher and is currently making fresh session highs at USD 10.82k/t.
• Reliance, India will be halting Russian oil imports as part of the term-deal with Rosneft due to the latest US sanctions, via Reuters citing sources
• Russian oil supply to India is set to fall to near zero, according to sources cited by Bloomberg.
• Indian state refiners reviewing bills of lading for Russian oil cargoes arriving post-November 21st to ensure no supply comes directly from US-sanctioned Rosneft and Lukoil, according to a source cited by Reuters

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NOTABLE DATA RECAP

• French Business Climate Mfg (Oct) 101.0 vs. Exp. 96.0 (Prev. 96.0, Rev. 97)
• UK CBI Trends - Orders (Oct) -38.0 (Prev. -27.0)

NOTABLE EUROPEAN HEADLINES

• SNB Minutes (Sep): discussed diverging interest rate developments in the US and EZ with experts. Board concluded that the current implementation of monetary policy was appropriate under various scenarios.
• German Council of Tax Experts expect EUR 33.6bln more in total tax revenue in 2025-2029 vs May; German Finance Minister says more positive economic outlook is reflected in rising tax rev.; Gov. is bearing most of growth booster expenses

NOTABLE US HEADLINES

• US President Trump said interest rates are down, while he criticised the Fed chair, and noted that he will be doing something very quickly to get beef prices down.
• US Treasury Secretary Bessent said they might see CPI coming down next month and the month after, while he thinks housing prices are a lagging indicator, and they are going to see substantial tax refunds for Americans.
• US Republican Senators are said to consider a bill to keep SNAP program benefits flowing during the government shutdown, according to POLITICO.
• US President Trump's administration is in talks to take equity stakes in quantum computing firms, according to WSJ.

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GEOPOLITICS

MIDDLE EAST

• US Secretary of State Rubio said the Israeli Knesset's moves on West Bank annexation threaten the Gaza peace deal.

RUSSIA-UKRAINE

• US President Trump said it didn't feel right to have a meeting with Russian President Putin, so he cancelled it and felt it was time for Russian sanctions but hopes sanctions won't be on for long. Trump also stated that whenever he speaks with Russian President Putin, they are good conversations, but they don't go anywhere, while he added that sanctions will hopefully make Russian President Putin reasonable.
• US Secretary of State Rubio said they would still like to meet with the Russians and are always going to be interested in engaging with Russia if there's an opportunity to achieve peace.
• US Treasury Secretary Bessent said a substantial pick up in Russia sanctions was expected to be announced on Wednesday or Thursday. Bessent separately commented that Russian President Putin has not come to the table in an honest manner and President Trump is disappointed with where we are in talks to end the war, while he said the incoming Russia sanctions will be among the largest and the US is urging European and G7 allies, plus Canada and Australia, to join the sanctions push.
• US Treasury Department announced it is imposing sanctions on Russia related to oil and is targeting Russia's Rosneft and Lukoil in the latest batch of sanctions, while it added that OFAC is designating a number of Russia-based Rosneft and Lukoil subsidiaries. Furthermore, it stated that all entities owned 50% or more, directly or indirectly, by Rosneft and Lukoil are blocked, even if not designated by OFAC and it called on Russia to immediately agree to a ceasefire.
• Ukraine President Zelensky says a ceasefire is a possibility. More pressure on Russia is needed. Will not agree to territorial concessions.
• Russia's Deputy Security Council Chair Medvedev states that the US is a Russian opponent and that US President Trump is on a warpath, his actions are like an act of war.

OTHER

• North Korea said its missile test on Wednesday was successful and was for self-defence, while it added that the missiles tested were hypersonic projectiles, according to KCNA.

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CRYPTO

• Bitcoin is a little firmer and trades around USD 109k with Ethereum also a touch firmer and just shy of USD 3.9k.

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APAC TRADE

• APAC stocks were mostly subdued following the negative handover from Wall St, where sentiment was weighed on by US-China frictions.
• ASX 200 traded rangebound as participants digested quarterly updates, and with gains in energy and utilities offsetting the weakness in tech and mining.
• Nikkei 225 underperformed after gapping lower at the open to beneath the 49,000 level despite a weaker currency.
• Hang Seng and Shanghai Comp were negative with the mainland pressured amid US-China tensions after reports that the Trump admin considers restricting globally-produced exports to China made with or containing US software.

NOTABLE ASIA-PAC HEADLINES

• BoK kept the base rate unchanged at 2.50%, as expected, with the decision not unanimous as board member Shin Sung-Hwan dissented and said a rate cut is needed to support growth. BoK said it will maintain the rate cut stance to mitigate downside risk to economic growth, and will adjust the timing and pace of any further base rate cuts, while it will closely monitor changes in domestic and external policy conditions, as well as examine the impact on inflation and financial stability. BoK Governor Rhee revealed that four board members said the door for rate cuts should be open for the near future, while two board members said current rates should be maintained. Rhee also said that a rate cut at the meeting could have accelerated the upswing in property prices and that it was too early to tell if the rate-cut stance could continue through next year. Furthermore, he said there is greater focus on financial stability among board members, and noted that the chip cycle and US-China trade talks should be watched as the board prepares for the November forecast revision.
• Japan's RENGO says it will be seeking wage hikes of 5% or more in 2026 shunto negotiations
• China publishes fourth plenum communique, via Xinhua; approves draft of next five-year plan as plenum ends, aims to boost trade innovation, further open markets and extend bilateral investment opportunities. Plans measures to stabilise the job market. Will strengthen public opinion guidance to effectively prevent ideological risks. To enhance social security controls to legally combat crime. Promotes long-term prosperity and stability in Hong Kong and Macau. Will persevere in advancing comprehensive and strict governance over the Communist party. Aiming for a 'big increase' in the level of tech self-reliance. To comprehensively enhance independent innovation capabilities.

📊 Historical Gold Cycles

📊 Global Helium Reserves

• Just five countries control the majority of known helium reserves, underscoring its status as a strategically scarce resource.
• As terrestrial reserves decline, helium-3 mining on the Moon is gaining attention as a potential future source.

Helium may be best known for making balloons float, but it plays a far more serious role in modern industry—from cooling superconducting magnets in MRI machines to enabling cutting-edge research in quantum computing. Yet despite its critical uses, helium remains surprisingly scarce.

The visualization above from Made Visual Daily highlights estimated helium reserves by country, using data from Frontiers International.

Here's a closer look at the data:

The U.S. dominates with 20.6 billion m³ of helium reserves, more than twice the next-highest, Qatar, with 10.1 billion m³. Algeria, Russia, and Canada also make the list, while the rest of the world accounts for a relatively minor share.

Note: U.S. helium reserve estimates vary significantly depending on methodology. The figure above includes broader assessments of total reserves and resources, including reserves lacking full production history data.

Why Helium is So Valuable

Helium is unique in that it's a non-renewable resource on Earth. It's formed deep underground through radioactive decay and often extracted as a byproduct of natural gas production. Once released into the atmosphere, helium escapes into space—meaning it can't be recovered or recycled easily.

Its properties as an inert, ultra-light, and extremely cold gas make it indispensable for cryogenics, semiconductor manufacturing, and aerospace technologies. As such, helium is a resource not to be taken lightly.

Supply Risks and Strategic Reserves

Despite its importance, global helium supply chains remain fragile. In recent years, a combination of plant shutdowns, geopolitical tensions, and market fluctuations has led to multiple helium shortages. With global production at just 0.2 billion m³ per year, reserves could become even more critical in the coming decades.

Looking to the Moon for Helium-3

Interestingly, the Moon may offer a futuristic solution. Helium-3, a rare isotope not found in abundance on Earth, exists in greater quantities on the lunar surface. Scientists and companies are actively researching how helium-3 could be mined for potential use in nuclear fusion—possibly turning the Moon into a strategic resource hub.

https://www.visualcapitalist.com/cp/ranked-the-countries-with-the-largest-helium-reserves/

US Home Buyers vs Sellers

🔷Hand Signals Of The Chicago Trading Pits

🚨🚨🚨 LPG Tanker Attacked Near Yemen

Author: Tyler Durden for ZeroHedge

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UK Maritime Trade Operations (UKMTO) reported that a commercial vessel was struck by an "unknown projectile" approximately 210 kilometers (130 miles) east of Aden, Yemen. Security firm Ambrey identified the vessel as the liquefied natural gas tanker MV Falcon.

UKMTO WARNING 036-25 UPDATE 001 - ATTACK - 18 OCT 25

Click here to view the full Advisory⤵️https://t.co/yo0ifPJJjr#MaritimeSecurity #MarSec pic.twitter.com/YIvtfvr5rn

— UKMTO Operations Centre (@UK_MTO) October 18, 2025

Shipping analyst Tanker Trackers wrote on X:

The LPG tanker FALCON (9014432), which caught fire today in the Gulf of Aden, was laden with Iranian LPG from Assaluyeh after loading there on 2025-09-25. She was most likely heading to Ras Isa, Yemen; to supply the Houthis. This vessel was detained in January 2025 in Istanbul for 13 deficiencies. The Indian-owned, Cameroon-flagged tanker is 31 years old and 25/26 crew are accounted for. One person is still missing. No known insurer and she isn't blacklisted by any government.

The LPG tanker FALCON (9014432), which caught fire today in the Gulf of Aden, was laden with Iranian LPG from Assaluyeh after loading there on 2025-09-25. She was most likely heading to Ras Isa, Yemen; to supply the Houthis. This vessel was detained in January 2025 in Istanbul… pic.twitter.com/D1kUoUADVi

— TankerTrackers.com, Inc. (@TankerTrackers) October 18, 2025

The cause of the blast remains unclear, but rumors are already surfacing ...

🚨🇮🇷 Indian tanker "FALCON", carrying Iranian LPG hit by a submarine in the Gulf of Aden.

No one has claimed responsibility. pic.twitter.com/UEkcKKFFjG

— Terror Alarm (@Terror_Alarm) October 18, 2025

*Developing...

⚠️ There is now a 100% chance of an October interest rate cut

🆕 The Week Ahead - Oct 20

Next week, investors will continue to monitor developments in the US–China trade dispute, watching for signs of either escalation or easing tensions. 

The US corporate earnings season will also move into full swing, with major companies such as Tesla, P&G, GE, Coca-Cola, Netflix, IBM, AT&T, Verizon, and Intel set to report results. 

In the US, the federal government shutdown is expected to enter its fourth week, though traders will still have the CPI report to digest, alongside S&P Global flash PMIs, and existing home sales. 

In China, attention will focus on a batch of crucial economic releases, including Q3 GDP. 

Elsewhere, flash PMI data will be released for the Eurozone, Germany, the UK, India, Japan, and Australia. 

Other important indicators include Euro Area consumer confidence, Japan's trade and inflation figures, UK inflation, as well as monetary policy decisions from the central banks of Turkey, Indonesia, and South Korea.

🚨⚠️ US Margin Debt Hits $1.13 Trillion : A New All-Time High

🔷 Oil Tanker Rates Soar as U.S. and China Escalate Port Trade War

By Tsvetana Paraskova for Oilprice.com

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• China has imposed steep new port fees on U.S.-owned, operated, built, or flagged vessels — mirroring U.S. tariffs on Chinese ships.
• This new system of levies triggered turmoil in the global tanker market and drove freight rates sharply higher.
• Around 13% of the global crude tanker fleet could be affected, with VLCC rates on the Middle East–China route surging and a two-tier market emerging between China-compliant and non-compliant vessels.

The latest tit-for-tat fees on port callings in the U.S.-China trade spat threaten to create additional vortexes in global oil flows.

Shipowners and charterers are scrambling for clarity after China imposed this week a fee on U.S.-owned, operated, built, or flagged vessels, in retaliation for a similar U.S. move on Chinese ships. China-built ships are exempted from the new Chinese fee, but the impact on oil trade flows would still be significant, at least until owners and charterers find a way to move forward more smoothly in the choppy waters of renewed trade spats.

In these early days of the port fee escalation, the oil tanker market is in chaos as freight rates are rising on expectations of millions of U.S. dollars in additional costs per voyage, and cargoes are being delayed or canceled.

This new chaos creates inefficiencies in the tanker market, drives up freight costs, and adds to already upended flows with sanctions on Chinese crude import terminals and U.S. pressure on Russia's buyers to halt imports of Russian oil.

Tit-for-Tat Port Fees

The latest turmoil in the tanker market began at the end of last week when China announced it would impose, effective October 14, a port fee of $56 (400 Chinese yuan) per ton on U.S.-flagged, built, operated, or owned vessels at Chinese ports. The fee is set to rise each year, to reach as much as $157 (1,120 yuan) per ton by April 2028.

"China's position is consistent. If there's a fight, we'll fight to the end; if there's a talk, the door is open," a spokesperson for the Chinese commerce ministry said on Tuesday, as carried by the BBC.

"The US cannot demand talks while simultaneously imposing new restrictive measures with threats and intimidation. This is not the right way to engage with China," the spokesperson said in a statement.

The Chinese retaliatory fees are equivalent to the United States Trade Representative (USTR) charges imposed on Chinese owned/operated vessels.

And these have just thrown the tanker market into turmoil.

"It seems that, not for the first time, the shipping industry is caught up in the geopolitical jostling between the United States and China," U.S.-based brokers Poten & Partners said on Friday, shortly after China announced its tit-for-tat fees.

This week, shipowners are scrambling to obtain all relevant paperwork, and some are reshuffling corporate structures to lower American ownership to below 25%. A U.S.-held stake below 25% does not trigger the port fees in China.

Even if China-built vessels are exempted from the Chinese fees, 13% of the global crude tanker fleet will be affected by the port fees in China, according to Jefferies analyst Omar Nokta.

Tanker Rates Surge, Again

The result of all the tanker market chaos and uncertainty is soaring freight rates for supertankers to ship crude from the Middle East to China.

The spot rate for a very large crude carrier (VLCC) – capable of transporting up to 2 million barrels of oil – on the Middle East to China route jumped this week to the highest in nearly three weeks.

The previous surge in supertanker freight rates occurred last month as rising crude supply from OPEC+ and South America and a jump in longer-haul routes hiked freight rates for supertankers to levels last seen nearly three years ago.

VLCC rates on the benchmark Middle East-to-China route hit the threshold of $100,000 per day in September. That was the highest in almost three years and well above the previous 2025 high during the Israel-Iran conflict in June, when fears of disruption to supply or trade flows sent charter rates soaring.

Traders estimate for Reuters that a VLCC linked to the U.S. would now be hit with as much as a $15 million surcharge if it calls at a Chinese port—and no one is paying such massive fees.

"It's not just the dearth of China-compliant ships, it's also uncertainty of what is a China-compliant ship that's driving up freight costs in the near term," Anoop Singh, global head of shipping research at Oil Brokerage Ltd, told Bloomberg.

Due to the port fees and ongoing uncertainties, some ships were idling off China as of Wednesday, shipbrokers and traders tell Bloomberg.

As shipowners and charterers scramble to ease into the new tanker market reality, a two-tier market is emerging, they added. One group of vessel owners is willing to ship cargoes to China, while the other isn't. The former group is charging premiums to transport crude and other goods to China. The latter is seeking workarounds and is considering mid-voyage ship-to-ship transfers to avoid multi-million dollar fees at a Chinese port for a U.S.-linked vessel.

The port fees are the latest in a series of sudden shifts in global crude flows.

This week, supertankers have started to divert from their original destination of the Chinese port of Rizhao, after the U.S. blacklisted around 100 individuals, vessels, and companies—including the Rizhao Shihua Crude Oil Terminal, which is co-owned by Sinopec, China's top refiner.

Global crude flows are shifting again due to sanctions and trade disputes, and they could alter yet again in the near term if the U.S. succeeds in pressuring India to reduce Russian crude imports.

Drug Cartel Areas In Mexico

📊 World's Largest Merchant Fleets

🔷 Powell on the End of QT (“We’re Not so Far Away but There’s a Ways to Go”), Shifting Assets to T-Bills, and Selling MBS

By Wolf Richter for WOLF STREET.

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Powell in his speech today discussed the Fed's balance sheet, including:

• When QT might end: "In coming months," he said in the speech; "We're not so far away now, but there's a ways to go," he said in the Q&A.
• How the balance sheet's composition might change: Shifting to short-term T-bills and getting rid of the MBS entirely, including by selling them.
• How doomsday would unfold if the Fed were forced to stop paying the banks interest on their reserve balances.

The Fed has been operating officially under the "ample reserves regime" since early 2020. Reserves represent liquidity that banks keep in their reserve accounts at the Fed to pay each other on a daily basis as part of the payments system; to have liquidity on hand to deal with large swings of liquidity as they occur; to earn risk-free interest; and boost their regulatory capital.

"Reserves" are a liability on the Fed's balance sheet (amounts it owes the banks). The Fed pays the banks interest on their reserve balances, at a rate that is one of the five policy rates the Fed set at the FOMC meetings. Reserves are key.

When QT might end:

"Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions," he said in his prepared remarks.

"We may approach that point in coming months," he said. But then in the Q&A, he put the "coming months" into perspective:

"We're not so far away now, but there's a ways to go."

Even after QT has ended, "reserve balances will continue to gradually decline as other Federal Reserve liabilities grow over time," he said.

When QT ends, total assets remain level, and so total liabilities remain level, but as the other liabilities increase based on external demand, reserves will shrink further.

As assets remain level, while the economy grows, total assets as percent of GDP would decline further, which is a soft form of QT. The ratio has already declined from nearly 36% in 2022 to 21.6% currently. The ratio would continue to decline after QT ends, but more slowly.

This also occurred from the end of 2014 through 2017 when total assets remained flat while the economy grew, and the ratio therefore declined. QT-1 was phased in at the very end of 2017 and ran through mid-2019, which accelerated the decline of the ratio.

Even before 2009, before QE, the Fed's assets grew roughly with the economy, which is the normal condition (my discussion of the Fed's assets).

The three other "Federal Reserve liabilities":

• Currency in circulation (paper dollars, currently $2.4 trillion), which are demand-based, about half held overseas.
• The government's checking account (Treasury General Account or TGA) currently about $800 billion.
• Reverse repurchase agreements, by which counterparties can deposit cash at the Fed. They come in two flavors:

• Overnight reverse repos (ON RRPs) with US counterparties, such as money market funds. After three years of QT, they're down to near-zero.
• Reverse repos with "Foreign official and international accounts," $350 billion, with which foreign central banks deposit their USD cash at the Fed.

"A little bit of tightening in money market conditions."

"Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates," he said.

In the Q&A, he referred to it as a "little bit of tightening in money market conditions."

For example, some rate volatility has crept into the $3-trillion-a-day portion of the repo market that is tracked by the Secured Overnight Financing Rate (SOFR), especially around month-end, quarter-end, and tax-day periods, when large amounts of liquidity get moved around.

In the days leading up to September 15, as companies paid corporate estimated taxes, SOFR rose by about 12 basis points over a three-day period to 4.51% (and higher intraday) on September 15, before settling back down to 4.38% on September 17.

When the rate cut became effective on September 18, SOFR dropped by 24 basis points to 4.14%, but then rose again to 4.24% by September 30 amid month-end liquidity flows. On Friday, October 10, it was back at 4.15%.

Already a year ago, Dallas Fed president Lorie Logan said: "Such temporary rate pressures can be price signals that help market participants redistribute liquidity to the places where it's needed most. And from a policy perspective, I think it's important to tolerate normal, modest, temporary pressures of this type so we can get to an efficient balance sheet size."

And if these liquidity pressures start getting out of hand, and repo rates spike, banks can borrow at the Fed's new and improved Standing Repo Facility (SRF) and at the improved Discount Window at the Fed's policy rates and lend to the repo market risk-free at the spiked repo rates and profit from the spread.

This supply of cash to the repo market would cause repo rates to settle back down toward the Fed's policy rates, while earning banks a bundle.

Back in 2019, when the repo rates blew out, the Fed didn't have the SRF, and the Fed ended up directly entering the repo market. Powell referred to that in his discussion.

Changing the composition of the assets:

He re-iterated the coming shift to short-term Treasury bills for part of the portfolio, which has been discussed by other Fed governors and presidents before, and re-iterated that the Fed would be getting rid of its MBS entirely, and that it might sell them outright.

"Relative to the outstanding universe of Treasury securities, our portfolio is currently overweight longer-term securities and underweight shorter-term securities. The longer-run composition will be a topic of Committee discussion," he said, and so it will crop up in the minutes over the next few months.

"Transition to our desired composition will occur gradually and predictably, giving market participants time to adjust and minimizing the risk of market disruption," he said.

"Consistent with our longstanding guidance, we aim for a portfolio consisting primarily of Treasury securities over the longer run," he said. And he added in his footnote 21:

"As noted in the minutes of the May 2022 FOMC meeting, the Committee could, at some point, consider sales of agency MBS to accelerate progress toward a longer-run SOMA portfolio composed primarily of Treasury securities."

His doomsday scenario if the Fed cannot pay interest on reserves.

There has been some talk to prohibit the Fed from paying interest to the banks on their reserve balances. Powell is not a fan of that. So he outlined this doomsday scenario that would unfold if the Fed were forced to stop paying interest on their reserve balances. So for your amusement, in Powell's own words:

"If our ability to pay interest on reserves and other liabilities were eliminated, the Fed would lose control over rates. The stance of monetary policy would no longer be appropriately calibrated to economic conditions and would push the economy away from our employment and price stability goals."

"To restore rate control, large sales of securities over a short period of time would be needed to shrink our balance sheet and the quantity of reserves in the system."

"The volume and speed of these sales could strain Treasury market functioning and compromise financial stability. Market participants would need to absorb the sales of Treasury securities and agency MBS, which would put upward pressure on the entire yield curve, raising borrowing costs for the Treasury and the private sector. Even after that volatile and disruptive process, the banking system would be less resilient and more vulnerable to liquidity shocks," he said.

🔷 U.S. Government Adds To Bitcoin Reserve With Historic $15 Billion Seizure In Forced Labor Crypto Scam Case

The United States government has taken custody of roughly 127,271 Bitcoin, worth about $15 billion, marking the largest cryptocurrency forfeiture in Department of Justice history. The move effectively adds a massive tranche to the federal government's strategic Bitcoin reserves following the dismantling of an alleged transnational cyber-fraud empire based in Cambodia.

The seizure stems from a sweeping federal indictment unsealed Tuesday in Brooklyn, charging Chen Zhi, 37, a U.K. and Cambodian national known as Vincent, and chairman of Prince Holding Group, with wire fraud conspiracy and money laundering conspiracy, according to a DOJ press release.

Prosecutors allege Chen and his associates "operated forced-labor scam compounds across Cambodia" that carried out "cryptocurrency investment fraud schemes, known as 'pig butchering' scams, that stole billions of dollars from victims in the United States and around the world."

The DOJ release says that the seized funds—referred to in court documents as the Defendant Cryptocurrency—are now under U.S. government control. "The U.S. Attorney's Office for the Eastern District of New York and the Justice Department's National Security Division also filed today a civil forfeiture complaint against approximately 127,271 Bitcoin … currently worth approximately $15 billion … presently in the custody of the U.S. government," the department stated.

Attorney General Pamela Bondi called the case "one of the most significant strikes ever against the global scourge of human trafficking and cyber-enabled financial fraud," emphasizing that the United States will "use every tool at its disposal to defend victims, recover stolen assets, and bring to justice those who exploit the vulnerable for profit."

According to the indictment, Prince Group's scam operations trafficked hundreds of workers who were "confined in prison-like compounds and forced to carry out online scams on an industrial scale." Prosecutors allege the network laundered illicit crypto proceeds using advanced "spraying" and "funneling" techniques to obscure the origins of stolen assets.

Assistant Attorney General John A. Eisenberg described Chen as "the mastermind behind a sprawling cyber-fraud empire operating under the Prince Group umbrella," adding that the "historic forfeiture, the largest in Department history, reflect[s] our commitment to using every tool at our disposal to ensure such crimes do not pay."

Chen remains at large. The Department of the Treasury designated Prince Group a transnational criminal organization and announced sanctions against Chen and affiliated entities. The United Kingdom also announced parallel sanctions through its Foreign, Commonwealth & Development Office.

The FBI New York Joint Asian Criminal Enterprise Task Force, supported by the Bureau's Virtual Asset Unit, led the investigation. "Today the FBI and partners executed one of the largest financial fraud takedowns in history," said FBI Director Kash Patel. "This is an individual who allegedly operated a vast criminal network across multiple continents … targeting millions of innocent victims in the process. Justice will be done."

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Full Article Link:: https://www.zerohedge.com/markets/us-government-adds-bitcoin-reserve-historic-15-billion-seizure-forced-labor-crypto-scam

📊 Silver : There is no physical

📊 FOREIGN CENTRAL BANK RESERVES : GOLD vs US TREASURIES

For the first time since 1996, foreign central banks hold a greater share of Gold in their reserves than US Treasuries.

🚨 BUYER BEWARE 🚨

🚨 ALERT:: EIA Publications May Shut Down

"EIA is continuing normal publication schedules and data collection until further notice."

📢 CME Group #Metals Complex Reaches All-Time Daily Volume Record

:: 2,148,990 contracts

🚨 CME Performance Bond Requirements

Metals Margin -

Effective Friday October 10, 2025

GC :: INCREASE FROM $17K TO $18K

SI :: INCREASE FROM $16K TO $17.5K

https://www.cmegroup.com/notices/clearing/2025/10/25-320.html?source=rss

✅ ECB’s QT Has Knocked €3.28 trillion off its Balance Sheet (far More than the Fed’s QT) and Accelerated QT Further this Year

By Wolf Richter for WOLF STREET.

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Gold mark-to-market quarterly adjustment: +€158 billion for Q3 on gold's price spike, largest ever write-up.

The ECB has now shed €3.28 trillion ($3.81 trillion) of its QE assets, per its balance sheet today – far more, about $1.5 trillion more, than the Fed's QT of $2.38 trillion – and far more than anyone thought a central bank could ever shed when QT started. And the ECB's QT continues at the pace that was accelerated for 2025.

The ECB had conducted QE via two methods: Large amounts of loans to the banks for them to plow into whatever; and large amounts of bond purchases, mostly government bonds, but also corporate bonds, mortgage bonds, and asset-backed securities. Between 2015, when its serious QE started, and peak-balance sheet in mid-2022, the ECB's QE assets (these loans and bonds) had exploded by a factor of nearly 10, from €690 billion in 2015 to €7.16 trillion in mid-2022.

Then, in 2022 as inflation was raging, it flipped to QT, then accelerated QT in phases, accelerating it further for 2025, and now has shed €3.28 trillion, bringing its QE assets down to €3.89 trillion, from €7.16 trillion in June 2022. 

In other words, it has shed:

• 51% of the entire pile of QE assets added since QE started in 2015.
• 84% of the pile of QE assets added during the pandemic.

The two QE assets: Loans and bonds.

Loans to banks: nearly gone, -99%, to less than €20 billion, the lowest in the ECB's data going back to 1999. The ECB started changing the terms of the loans in 2022, thereby making them less attractive, and the banks paid them back (blue in the chart below).

Bonds: -$37 billion in September, to €3.87 trillion.

Bonds come off the balance sheet as they mature. During the early phases of QT, the bond roll-off was limited by preset "caps." The amount that matured above the caps was replaced with new purchases. But the last cap was removed effective at the start of this year. In some months, more bonds mature, in other months fewer bonds mature, but whatever matures comes off the balance sheet, and nothing is replaced.

In September, $37 billion in bonds matured and came off the balance sheet. On average, €47 billion a month matured and came off the balance sheet in 2025. Bond holdings have declined by 22% from the peak, to €3.87 trillion (red in the chart below).

The ECB's total assets.

The ECB has other assets on its balance sheet, including over $1.1 trillion of gold valued at market value.

Gold holdings mark-to-market: +€156 billion in Q3, or +16%, to €1.128 trillion.

The ECB values its holdings of "gold and gold receivables" at market prices in euros. Every quarter, it adjusts its holdings to market value in euro terms. The balance sheet released today includes the quarterly mark-to-market adjustment of gold, and the price of gold spiked in Q3!

The ECB marked up its gold holdings by €156 billion on this balance sheet, to €1.128 trillion, the biggest mark-to-market increase ever, bigger even than in Q1. In Q2, the ECB had marked down its gold holdings.

Mark-to-market adjustments of its gold holdings are paper adjustments at the end of the quarter and do not involve purchases or sales of gold, or money printing, or QE or QT or whatever.

From mid-2019 through Q3 2025, the ECB wrote up its gold holdings by €726 billion (+180%), reflecting the surge of the price of gold in euros.

Total assets: This €156 billion quarterly mark-to-market adjustment of gold on the current balance sheet caused total assets to jump by €138 billion this week, to €6.21 trillion. That little hook at the end:

And in case you missed it: The ECB is way ahead of the Fed, which has shed $2.38 trillion under its QT program. But even the big straggler, Bank of Japan has accelerated its QT this year.

Natural Gas Production : Global

Forex & Gold : Reserves