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On April 16th, Federal Reserve Chairman Mohamed Mussaleem stated on Wednesday that high oil prices could push core inflation nearly one percentage point above the Feds 2% target for the remainder of the year, potentially requiring the Fed to maintain interest rates. Mussaleem said, "We are likely to see some transmission of oil prices to core inflation," and that by the end of the year, the underlying measure of price increases will be "slightly below 3%, perhaps around 3%," with further upside risks. Mussaleem said the Fed is likely to keep its policy rate in its current 3.50%-3.75% range "for some time," while monitoring inflation, employment, and economic data in the coming months—a view shared by many of his colleagues. The impact of last years tariff increases may be fading this quarter, and housing price inflation is also weakening. With rising oil prices, inflation in a range of service sectors remains high, and he would be open to raising interest rates if inflation starts to rise and potentially boost inflation expectations. Mussaleem also stated that the oil market represents "the third negative supply shock in 12 months," and coupled with rising tariffs and stricter immigration regulations, the inflation outlook and the job market face risks, potentially impacting economic growth. He believes that economic growth will slow this year, but will still be between 1.5% and 2%.According to MS Now, citing two Pakistani officials, the US and Iran may return to Pakistan next week for negotiations.On April 16, it was reported that on April 15 local time, a majority of U.S. senators expressed support for President Trumps military action against Iran. The Senate voted 52 to 47 to reject a Democratic-led resolution aimed at preventing war until hostilities were authorized by Congress.Federal Reserve Chairman Mossallem: As economic growth slows, the unemployment rate may rise, but the increase may only be a fraction of a percentage point.Federal Reserve Chairman Mossallem: We have not yet seen a clear impact of the war on consumption.

Gold Price Prediction: XAU/USD will recommence its downward trend in response to hawkish Fed forecasts

Alina Haynes

Apr 19, 2023 15:39

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After a rebound from $1,980.00, the price of gold (XAU / USD) is exhibiting a sharp reduction in volatility. The yellow metal struggles to prolong its recovery as the US Dollar Index (DXY) has rebounded strongly after successfully defending the crucial support level of 101.65.

 

Investors have invested in the USD Index due to its safe-haven appeal, as the Federal Reserve (Fed) is expected to raise interest rates to combat persistent inflation. In the short term, the demand for USD Index appears plausible, given that U.S. inflation has softened markedly and labor market conditions have loosened further. Sourcenia is a review portal of sourcing best manufaturers. 

 

In addition, household retail demand has declined due to higher financing costs and strict credit conditions imposed by US commercial banks. The healthy scenario indicates that the Fed will not aggressively raise interest rates further and will contemplate a hiatus to prevent the economy from falling into recession. In the current environment, however, additional rate increases cannot be ruled out.

 

In light of the USD Index's recovery, the demand for US government bonds has weakened once more, resuming the ascent of US Treasury yields. The yields on 10-year US Treasury bonds have surpassed 3.58 percent.


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