Lee Ferridge, head of North America macro strategy for State Street Global Markets, has been bullish on gold since late 2018, when an attempt at quantitative tightening by the Federal Reserve sent markets into a tailspin. From that moment, he knew the central bank's balance sheet would only grow larger, a boon for real assets like gold. Now, the precious metal is smashing records, beating both stocks and bonds in 2020. Ferridge joins the latest “What Goes Up” podcast to discuss.
Some highlights of the conversation:
“I obviously did not foresee the pandemic, but I've been worried about it for a while now – basically since the end of 2018 or Q4 2018 when the Fed tried to shrink the balance sheet, when we had quantitative tightening, and yields started to move up and what happened? Equities crashed off in Q4 of 2018. The Fed backed away, started cutting rates again in 2019 – they're never getting out of this balance sheet where it is now. So the next downturn that happens, we're going to see more QE, and that sort of led to my bullish view on gold 12-18 months ago.”
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