![]() ![]() More importantly, financial markets have essentially fully priced out cuts this year. There is a weak consensus of a further hike to 5.50% - 5.75% by year-end. But, thus far, the economy has for the most part remained unscathed. This will likely continue pouring cold water on expectations of a pivot, which surged after Silicon Valley Bank collapsed in March. As such, the Fed is likely to keep the door open to further tightening if necessary as it is likely too early to conclude that the fight against inflation is over. These exclude volatile components, such as food and energy prices. Meanwhile, even though headline inflation has eased without causing a surge in unemployment, core CPI readings remain sticky. In fact, the index bottomed in the summer of 2022 when it was deeply negative. The more positive the reading is, the more that means economic data has generally been outperforming expectations and vice versa. This has been amidst US economic resilience to this monetary tightening cycle.Īccording to the Citi Economic Surprise Index tracking the United States, the gauge sits at 70.30. Chairman Jerome Powell and company are widely expected to raise benchmark lending rates to a zone of 5.25% - 5.50% following a pause at the previous meeting. Gold prices rallied over the past 24 hours heading into Wednesday’s highly anticipated FOMC rate decision. ![]()
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