Gold prices climbed Thursday after the Fed raised interest rates by 50 basis points. Chairman Jerome Powell also ruled out a 0.75% hike in the immediate future. “A 75-basis-point increase is not something the committee is actively considering,” he said. However, some experts aren’t ruling out higher rates just yet. “With inflation at a 40-year high, it’s hard to see the Fed willing to stop anytime soon,” Beth Ann Bovino, chief U.S. economist at S&P Global Ratings,” told Politico. “It seems like they’re ready to hit the throttle.”

 

Yahoo News/Brian Cheung
Powell: Fed not currently considering 0.75% interest rate hikes

Federal Reserve Chairman Jerome Powell on Wednesday ruled out a 0.75% move higher in interest rates in the immediate future.

The central bank chief’s commentary took steam out of market speculation that the Fed would further ratchet up its pace of tightening.

The commentary coincides with the Fed’s decision to raise short-term interest rates by 0.50%. The Fed has not increased interest rates in increments larger than 0.25% since May 2000.

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Politico/Victoria Guida
‘Inflation is much too high’: Powell puts the hammer on price spikes

For more than a decade, the Federal Reserve has kept interest rates at historic lows and gone to extraordinary lengths to help markets survive a financial meltdown and then a pandemic.

Now, it’s pulling back, and Wall Street and the economy are entering a new world.

At a meeting on Wednesday, the Fed announced a supersized increase in rates — the biggest in 22 years — and laid out plans to shrink its massive bond holdings starting on June 1 in a bid to put the brakes on the economy and kill the worst inflation since the Reagan administration. But it won’t stop there.

Continue reading, here.

 

Reuters via CNBC
Gold rises after U.S. Fed softens hawkish stance

Gold prices climbed Thursday after U.S. Federal Reserve Chair Jerome Powell ruled out large, aggressive interest rate hikes for the year as the central bank seeks to contain inflation without triggering an economic recession.

Rate hikes tend to lift bond yields and make zero-yield bullion less attractive by raising its opportunity cost. Gold, which is also perceived as an inflation hedge, is now up for a third straight session in what could be its best winning streak since mid-April.

Spot gold was up 1% at $1,899.26 per ounce after rising to its highest since April 29 earlier in the session. U.S. gold futures gained 1.7% to $1,899.7.

You can read the full story, here.

 

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