While inflation mitigates, market participants are waiting for the FOMC conclusion. The event will shape the future structure of the global economy. After the BLS released the previous morning, investors look forward to the FOMC meeting.
Recent reports look quite optimistic. The CPI-U index grew by 0.1% in November featuring the all items index increase by 3.1%. It is the highest level over the last 12 months right before seasonal adjustment. On the one hand, energy costs fell by 2.3%. On the other hand, they failed to offset growing shelter and food costs.
The FOMC meeting is in the spotlight. It is going to conclude today. The FED is expected to decide on further interest rate rises or cuts. Will the market have another rate hike pause or rise? A minority of experts believe the Federal Reserve officials will raise rates by around ¼%. The vast majority (around 98%) of market participants expect the FED to keep the benchmark interest rate between 5 ¼ and 5 ½ %.
The decision will be formulated following the CPI report. It will contain job reports from the last week with the most up-to-date data. Apart from the decision on the interest rate, the FED officials will announce the future steps within the monetary policy. Chairman Jerome Powell will make the official statement 30 minutes later.
So, market participants are laser-focused on the one and only factor – if the FED is going to reduce rates or keep them elevated. Gold traders are extremely worried, as the rate hike pushed the yellow metal price lower. As we know, gold futures reached a triple bottom after being traded well above $2,000 per ounce. It was the lowest asset value over the year.
Besides, the news appeared to be the reason for the slightly weaker dollar. The greenback lowered a bot. On the other hand, gold prices dropped even more. In the end, the Chairman’s official announcement may have a crucial effect on market sentiments in spite of the gold value.
May the trading luck be with you!
