Later this afternoon, the Fed is expected to announce that it’s raising interest rates by three-quarters of a percentage point. That would be the first 75-basis point rate hike in close to three decades. That decision is triggering higher inflation and recession fears throughout America. So, what does this mean for gold and gold prices? Well, Rob McEwen, Chairman and Chief Owner of McEwen Mining Corp, told Kitco News that it gives gold an opportunity to shine if people start thinking about seriously protecting their finances. He predicts gold could hit $5,000 per ounce in the next two to three years.

 

Fox Business/Megan Henney
Fed expected to intensify inflation fight with 75-basis point rate hike

The Federal Reserve is expected to ratchet up its fight to tame scorching-hot inflation on Wednesday with the first 75-basis point rate hike in close to three decades, a move that threatens to slow U.S. economic growth and exacerbate financial pressure on Americans.

With inflation unexpectedly accelerating to a fresh 40-year high in May, the Fed is under mounting pressure to move more aggressively to cool demand and slow surging consumer prices.

Central bank policymakers raised the benchmark interest rate by a half-percentage point – double the typical size – in May, and laid out a roadmap for similarly sized increases at their meetings in June and July, assuming that data evolved as expected. But a string of alarming inflation reports in recent weeks could force the Fed to shift course.

You can read the full article, here.

 

Kitco News
The Fed will get more hawkish, but cannot cool inflation; Why $5K gold is coming – Rob McEwen

The Federal Reserve is expected to turn more hawkish. Markets are pricing in a 75 bps increase at the next FOMC meeting, as opposed to a 50 bps rise.

Rob McEwen, Chairman and Chief Owner of McEwen Mining Corp, agrees with the market’s sentiment. However, even with more rate hikes and quantitative tightening, he does not think the Fed can tame inflation, barring a Volcker-like approach.

In the 1970s-80s period of double-digit inflation, Fed Chairman Paul Volcker raised interest rates to 20 percent, bringing down inflation.

“The horse is already out of the barn,” said McEwen. “[The Fed] has created a monster with monetary expansion and low interest rates. It’s going to take quite a while to tame that.”

Keep reading, here.

 

CNBC/Jeff Cox
Here’s everything the Fed is expected to announce, including the biggest rate hike in 28 years

The Federal Reserve on Wednesday is expected to do something it hasn’t done in 28 years — increase interest rates by three-quarters of a percentage point.

In response to soaring inflation and volatile financial markets, the central bank will hike the rate that banks charge each other for overnight borrowing to a range of 1.5%-1.75%, where it hasn’t been since before the Covid pandemic crisis began.

That rate feeds through to consumer borrowing, impacting virtually all adjustable-rate products such as credit cards and home equity loans.

Continue reading, here.

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