Fed's Bowman Warns on Jobs, Hints at Rate Cuts

Federal Reserve Vice Chair Michelle Bowman has clarified her stance on monetary policy, stating that while she still anticipates the need for interest rate cuts, she voted to hold rates steady this week to allow for more data analysis.

Speaking at a graduate banking event in Hawaii on Friday, Bowman confirmed her expectation for three quarter-percentage-point rate reductions this year. She framed the Federal Reserve's recent decision not as a shift in strategy, but as a tactical choice about the timing of the next move.

Why Wait? A Call for More Data

Bowman explained that the debate at this week's meeting centered on the pace of easing policy. After cutting rates by three-quarters of a percentage point over the last three meetings of 2025, the central bank faced a choice: continue cutting immediately or proceed more cautiously throughout the year.

Her vote to pause was driven by a desire to assess incoming information, particularly given the data gaps caused by last fall's government shutdown. While her long-term view remains unchanged—that weaker job market conditions and inflation moving toward 2% warrant looser policy—she noted some recent signs of stabilization in the labor market.

"The labor market is fragile," Bowman said. While she considered voting for a cut to protect against further deterioration, she ultimately felt it was prudent to wait. "We can afford to take time and 'keep policy powder dry' for a little while in order to carefully assess how the lower degree of policy restraint is flowing through to broader financial conditions and strengthening the labor market."

The Pause Won't Be Permanent

Despite her vote for a hold, Bowman stressed that the current policy stance should not be considered long-term. She signaled that any pause in rate cuts should be brief.

"We should also not imply that we expect to maintain the current stance of policy for an extended period of time," she stated, indicating a readiness to act at upcoming meetings. The Fed's next policy meeting is scheduled for March 17-18.

The Federal Open Market Committee voted 10-2 on Wednesday to keep the federal funds rate in its current 3.50%-3.75% range. The two dissenting votes came from Fed Governors Christopher Waller and Stephen Miran, who both favored an immediate rate cut. Bowman had been seen as a potential dissenter, but her comments reveal a more nuanced, data-dependent approach to the timing of policy adjustments.

Source: Yahoo Finance

Moody's has upgraded Israel's credit outlook to stable from negative, signaling renewed confidence in the nation's financial stability. The ratings agency affirmed Israel's sovereign rating at Baa1, citing a significant reduction in geopolitical risk as the primary driver for the improved forecast.

The Rationale Behind the Upgrade

The decision follows a series of key developments that have eased regional tensions. Moody's pointed to the end of military conflict with Iran in June 2025 and the establishment of ceasefires with Hamas in Gaza (2025) and Hezbollah in Lebanon (2024).

While the agency notes that Israel's geopolitical environment will likely remain fragile, it assesses that the risk of resuming large-scale ground operations has receded. This reduction in immediate conflict risk was central to the outlook revision.

Economic Resilience and Future Projections

Israel's economy and public finances demonstrated notable resilience during the recent conflicts and are now positioned for a rebound. Moody's projects the economy will expand by 5.0% in 2026, followed by steady growth of 3.0-3.5% in the years after.

On the fiscal front, government deficits are expected to shrink from the highs recorded in 2024 and 2025. This should allow the country's debt-to-GDP ratio to stabilize at around 68%.

Balancing Strengths Against Lingering Risks

The affirmation of the Baa1 rating balances the positive outlook with the lingering financial costs of past conflicts. Compared to forecasts made before October 7, 2023, Moody's expects government debt to be approximately 18 percentage points higher over the medium term.

However, Israel's fundamental credit strengths remain intact, providing a strong buffer. These include:

• A track record of robust GDP growth.

• Continued investment in its vital technology sector.

• Strong access to capital markets, which helps limit borrowing costs and mitigate fiscal pressure.

The country's local and foreign-currency ceilings remain at Aa3, four notches above the sovereign rating, reflecting this balance between elevated geopolitical risks and a diversified, stable economy.

Potential Triggers for Future Rating Changes

Looking ahead, Moody's outlined specific conditions that could lead to further rating actions.

A durable reduction in geopolitical risk, paired with a faster-than-expected fiscal consolidation, could create upward pressure on the rating. Conversely, a renewed escalation in regional tensions or a weakening of Israel's economic and fiscal prospects could lead to downward pressure.

Gold and silver just capped off a historic month with a spectacular selloff. The numbers are staggering: gold plummeted 13%, while silver endured a brutal 38% plunge.

While these moves are extreme, they aren't entirely surprising. The precious metals market had become incredibly stretched after a period of intense excitement. It was always unlikely that a stable asset like gold could surge over 20% in a single month without hitting severe turbulence. Silver, known for its volatility, had rocketed more than 60% in January alone. In finance, as in physics, gravity eventually reasserts itself.

A Healthy Correction, Not a Trend Reversal

Remarkably, the sharp downturn hasn't shaken the confidence of many market analysts. The consensus view is that this is a "healthy correction"—a necessary release of pressure after an unsustainable run. Across the board, experts are stopping short of calling an end to the bull market.

Their reasoning hinges on a simple question for investors: setting aside the recent price action, what has fundamentally changed in the global economy to derail gold's long-term upward trend?

While momentum trading and irrational exuberance clearly played a role in the recent volatility, the core drivers supporting gold's safe-haven status remain firmly in place.

Unchanged Risks in the Global Economy

The fundamental picture for gold is still compelling. Geopolitical tensions, though they may have eased momentarily, have not disappeared. With figures like President Donald Trump acting as agents of chaos, the world remains just one social media post away from a renewed crisis.

Meanwhile, government debt continues to accumulate globally at an unsustainable rate. This shifting economic landscape is forcing investors to rethink the old rules that once governed assets like gold and silver.

The New Logic of Bond Yields and Gold

The relationship between gold and the bond market is a prime example of this paradigm shift. Traditionally, rising bond yields were considered a negative for gold. Higher yields increase the opportunity cost of holding a non-yielding asset like gold and historically signaled growing confidence in the economy.

That narrative is changing. Today, rising yields are increasingly interpreted as a warning sign—an indication that investors are losing faith in the established monetary system. Persistent inflation and ballooning government debt are eroding the purchasing power of fiat currencies. This pushes investors toward defensive assets that can protect them from equity market risks, especially with stock valuations near record highs.

Gold's Role as an Anchor Asset

In an environment defined by escalating economic and geopolitical uncertainty, gold has evolved from a luxury to a necessity. Its unique advantage is that it carries no third-party or political risk.

Joseph Cavatoni, Senior Market Strategist at the World Gold Council, recently told Kitco News that gold has become a vital "anchor asset" in modern investment portfolios. "And once something is anchored, the discussion changes," he explained.

Even after its 13% correction, many analysts believe gold has significant upside potential. Some forecasts suggest prices could reach $6,000 an ounce by the end of the year.

The selloff has been overwhelming, but gold's fundamental role in the global financial system is unchanged. After a week of wild volatility, it’s time to reset and prepare for what comes next. The precious metals market may just be getting started.

Russia's Ambassador to the UN, Vassily Nebenzia, has declared that a repeat of the Venezuelan political scenario will not be permitted in Cuba, warning that any US intervention would not be an "easy ride."

Nebenzia contrasted the two nations, noting that high-ranking officials in Venezuela had betrayed their president. "This scenario will not work in Cuba," he stated in a televised interview, adding that recent American rhetoric is unlikely to translate into a successful intervention.

US Intensifies Pressure with New Sanctions

The ambassador's comments follow a new executive order signed by President Trump which declares a national emergency concerning Cuba. The order establishes a tariff mechanism aimed at countries that supply oil to the island nation. This move has already severed Cuba's crucial oil supply from Venezuela.

President Trump expressed confidence in the policy's impact, telling reporters, "They got their oil from Venezuela. They're not getting that anymore." He predicted that Cuba "will be failing pretty soon."

However, Cuba has a long history of confronting US pressure, dating back to the Cold War, suggesting a higher level of preparation for intelligence and economic subterfuge.

An S-125 surface-to-air missile system. Russia's envoy highlighted Cuba's readiness to resist foreign intervention, with the nation historically maintaining and modernizing its military hardware.

China Joins Russia in Condemning US Policy

China has also voiced its opposition to the increased pressure on Cuba. On Friday, the Chinese Foreign Ministry stated its firm stance "against inhumane practices and moves that deprive the Cuban people of their rights to subsistence and development."

This places both Russia and China, two global powers with strong military and economic ties to nations like Venezuela, Cuba, and Iran, in alignment against recent US foreign policy actions.

Broader Warnings on Iran and NATO's Future

Ambassador Nebenzia extended his warnings to other geopolitical flashpoints, noting that any potential US action against Iran would trigger massive consequences. He described Tehran as being better prepared for a conflict now than it was in June 2025.

"The rhetoric of President Trump [about Iran] seems to have subsided after the protests that took place in Iran," Nebenzia said. "However, the situation is alarming. A strike may take place, but this time Iran is better prepared."

He also commented on the state of the North Atlantic Treaty Organization (NATO), suggesting the alliance has "really exhausted itself." While he does not expect the organization to disappear soon, he asserted that "the concept of Euro-Atlantic security has failed," a sentiment he noted was effectively confirmed by President Trump.

Despite Russia's strong relations with Iran, its current military engagement in Ukraine makes it unlikely to intervene directly in a potential US-Iran conflict.

S&P Global Ratings has upgraded its outlook on Italy to "positive" from "stable," signaling growing confidence in the country's economic trajectory. The agency affirmed Italy's sovereign credit ratings at 'BBB+/A-2'.

The change reflects a brighter view of Italy's capacity to navigate global economic challenges and manage its public finances.

Why S&P Is Bullish on Italy's Economy

The core of S&P's positive revision lies in the resilience of Italy's large and open economy. Despite ongoing uncertainty in global trade and tariffs, the nation has demonstrated notable strength.

Key drivers behind the improved outlook include:

• Consistent Trade Surpluses: Italy has consistently posted net current account surpluses, a sign that the country earns more from its international trade and investments than it spends.

• Growing Private Wealth: These surpluses have helped bolster private wealth within the country.

• Stronger External Position: Italy's net external creditor position has shown continuous improvement, strengthening its financial standing on the world stage.

S&P expects Italy's diversified private sector to continue driving these trends, which supports the nation's overall economic stability.

Tackling Debt: Italy's Path to Fiscal Stability

While Italy's government debt remains high, S&P noted gradual progress in the country's budgetary consolidation efforts.

The agency projects the headline budget deficit will fall below 3% of GDP by 2026. Furthermore, cash flow adjustments related to the "Superbonus" incentive program are also winding down, easing fiscal pressure.

Although government debt is forecast to be around 136% of GDP in 2025, S&P anticipates this figure will begin a downward trend starting in 2028.

What Could Trigger an Upgrade or Downgrade?

The positive outlook opens the door for a potential ratings upgrade, but S&P also outlined clear risks that could lead to a reversal.

The Path to a Higher Rating

S&P indicated that it could raise Italy's sovereign credit rating if the country achieves the following:

• Strengthens its external financial position further.

• Narrows its budget deficit on a cash basis.

• Puts government debt-to-GDP on a clear downward path.

Potential Downside Risks

Conversely, S&P would consider lowering the ratings if Italy's economic, external, or budgetary performance deteriorates significantly beyond current forecasts. Such a scenario could be triggered if prolonged international trade uncertainty erodes consumer and business confidence, ultimately weakening Italy's financial and fiscal standing.