Gold remained somewhat static in price today, not surprising since equities and crude moved up strongly based on various statements from Federal Reserve officials.

No one should focus on any one data set, as Fed Chairwoman Janet Yellen said today in her speech before the World Affairs Council of Philadelphia. But, we are not concerned with simply one set of data points in the least.

When life looks like Easy Street, there’s danger at your door.
                – “Uncle John’s Band,” The Grateful Dread

U.S. economic data is putting us in a quandary along with the Fed, Fed watchers, analysts and traders around the world.

Today’s figures and one international development added more fuel to the confusion fire. The outcome? We do not believe the FOMC will raise overnight rates come June 15, less than two weeks from now. Of course, we have been saying that for some time.

Yesterday, after the long holiday weekend, we might have expected some hint of certainty but we received instead contradictory data, which, in all objectivity, however, was quite positive for the U.S. economy. Some of it reinforced the idea that the Fed would raise rates in the June meeting. Some of the data old the hawks to step down and wait one more FOMC meeting. 

Considering the recent price declines in gold, one must not forget that the precious yellow metal has been one of the best performing assets in 2016.

If anyone sees any inflation, please report it to us. Not the CPI, but the GDP inflation index and while taking into account the deflator index. Essentially, there is none, even when you factor in the big bump back toward “normal” provided by rising crude prices.

On to Fed chairwoman Janet Yellen’s remarks during an interview today at Harvard's Radcliffe Institute for Advanced Study.

Conventional wisdom, as expressed by those who have turned very bullish on European and U.S. financial stocks, is saying the Fed will raise rates in June.

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Equities Lead Charge As All Risk Is On For The Day

In a classic risk-on day, equities, oil and the U.S. dollar rocketed up as gold fell and bond yields rose. On such a briskly upbeat day, it was only natural that the Japanese yen would fall against the dollar about as strongly as did the euro.

The 800,000-pound Godzilla in the room at the moment is the fear of a Federal Reserve interest rate hike.

As of Friday, interest-rate futures were pricing in a 30% probability of an increase at the June 14/15 meeting, up from 5% several days earlier, according to the CME’s FedWatch Tool.