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– This week is pivotal for investors and traders trying to gauge the Federal Reserve’s next move in terms of its monetary policy.
– Adjustments have been made in the Fed rate cut expectations by looking at the US equity markets or fixed income markets.
– Wall Street giants have scaled back their rate cut bets for this year while being more optimistic for 2025.
– Controlling inflation and navigating the economy post-COVID-19 crisis have been challenging tasks for the Fed.
– Recent data on producer prices and consumer prices raised concerns among investors and traders about inflation plateauing and becoming stickier than anticipated.
– The Fed Chairman indicated that the nature of inflation and its measurement have been permanently impacted by COVID, suggesting a reevaluation of the 2% inflation target.
– Consumer prices increased by 0.4% for the month and by 3.2% from a year ago, while producer prices jumped by 0.6% on the month, double the Dow Jones estimate.
– The Fed is expected to keep the rate at its current level of 5.50% in the upcoming monetary policy announcement.
– The sticky nature of inflation reduces the incentive for the Fed to take aggressive measures to lower interest rates.
– Goldman Sachs expects the Fed to cut rates three times this year, down from an earlier expectation of four times.
– The possibility of Donald Trump returning to office could influence the Fed’s rate cut decisions, as he favors lower interest rates.
– US stock indices have experienced volatility, partly due to sell-offs among some major stocks.
– Gold recorded its first negative week in over three weeks, with its current record high being about shy of ,200. The immediate support level for gold stands at 37, with the next support level at 87, and resistance at 95.