The U.S. national debt recently crossed $39 trillion – up nearly $3 trillion in a single year, and on pace to reach $40 trillion as soon as this fall.
Servicing that debt now costs more than the entire defense budget. And with inflation still running above 3.5% over the past year, every dollar sitting in cash quietly buys a little less than it did.
This is the backdrop that has central banks stockpiling gold at the fastest pace in decades. When the purchasing power of the dollar is in question, history shows people look for something that can’t be printed.
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The FOMC Minutes Won’t Tell You What the Fed Does Next. The Dissent Will.
Gold fell about 5% this week and closed Friday near $3,886 per ounce, its worst weekly performance in four months. The proximate cause was Tuesday’s hotter-than-expected CPI and Friday’s PPI, which together confirmed what precious metals investors have been slowly pricing since September: the Federal Reserve is not done tightening.
The Producer Price Index rose 0.3% from the month before and 6.5% for the 12 months ended in October, the highest annual rate since November 2022. The monthly figure came in slightly softer than the 0.4% consensus, but that offers cold comfort. Excluding food and energy prices, core PPI rose 0.3% on a monthly basis. Those are not numbers that give a central bank much room to pause twice in a row.
Friday’s PPI data, coupled with the hotter-than-expected October CPI released earlier this week, are expected to result in a rate hike from the Federal Reserve when policymakers meet in early December. CME FedWatch moved the odds of a 25-basis-point December hike to about 90%, while the probability of a 50-basis-point move fell to roughly 10% after the monthly PPI figure came in below forecast. The 50-basis-point trade is effectively on the back foot for now. The question is what comes after December.
That is precisely why Wednesday’s FOMC minutes deserve careful reading, and precisely why most investors will misread them. Chair Kevin Warsh framed the October hold as an observational pause to evaluate the transmission of September’s rate hike, and declined to provide forward guidance for the December meeting. The October meeting predates both the CPI and PPI readings. Any rate forecast in those minutes is already obsolete. What is not obsolete is the dissent structure.
The FOMC voted 10–2 to maintain the federal funds target range at 3.75%–4.00%, with two dissents favoring a 25-basis-point hike. Cleveland Fed President Beth Hammack and Fed Governor Lisa Cook each voted in favor of hiking interest rates by 25 basis points. Two dissenters is not a close call that gets walked back. It is a signal about where the committee’s center of gravity is drifting. Dissents are not cast in a vacuum.
The minutes will show the texture of that discussion, including which arguments gained traction among the members who voted to hold. If the case for patience rested on data that has since been superseded by hotter CPI and PPI readings, the hawks’ position has only strengthened. If, on the other hand, the majority expressed genuine confidence that September’s hike was still transmitting through the economy, that is a committee less likely to accelerate the pace in early 2027, even if December’s 25-basis-point move now looks increasingly likely.
Before markets open Monday, New York Fed President John Williams speaks at 9:05 a.m. and Chair Kevin Warsh speaks at noon. Warsh will speak November 17 at the Federal Reserve’s Productivity and Jobs Task Force Conference in San Francisco. His remarks there are unlikely to address December directly. Warsh has said he believes “when policymakers make quasi-commitments on interest rates through the cycle, we inhibit our own freedom to make the right calls.” Read the minutes instead.
For gold, the calculus is straightforward and unpleasant in the near term. Hawkish remarks from Federal Reserve officials have fueled bets on an extended period of monetary policy tightening, lifting the U.S. dollar and Treasury yields. Real yields rising alongside a stronger dollar is the most direct headwind the metal faces. Annual producer-price inflation climbed to 6.5%, the hottest reading since November 2022. The underlying pressure has not actually eased. Only the monthly pace surprised to the soft side. That distinction matters enormously for anyone trying to call a floor in gold prices before Wednesday.
Watch the dissent count in the minutes. If it broadened in discussion even among those who ultimately voted to hold, the Fed is closer to 25-basis-point moves at every meeting through mid-2027 than current market pricing suggests. That path keeps real yields elevated and gold under pressure. A majority that voted to hold out of genuine caution rather than internal consensus opens a different picture entirely.