Gold surged to a two-week high, and briefly broke through the $2,000 per ounce level on expectations that the Fed has reached the end of its tightening cycle.
FT-Booth survey finds majority of economists think central bank has more work to do to lower inflation
According to the analysts, this is being run mainly by the ‘Goldilocks’ effect
The consultancy pointed to sticky inflation and improved growth expectations
The U.S. dollar and Treasury yields fell after the Labor Department reported that the consumer price index (CPI) rose 0.4% last month, in line with estimates.
US Federal Reserve hikes interest rates by 25 basis points, its 10th increase in the last 14 months. At 5-5.25% interest rates are now at a 16-year high in the US. But the central bank has warmed up to a possible pause in its June policy. Chairman Jerome Powell has ruled out any rate cut for now as he believes that there is a long way to go before inflation comes down. Watch this chat between Nandita Khemka & Santosh Nair on what the Fed’s comments on future rate path means for the markets going forward.
The S&P 500 was up 0.4% in afternoon trading, a touch higher than it was before the Fed's announcement.
Fed futures are reflecting an 87 percent probability of a rate hike of 25 bps in May and of a 22 percent rate hike in the June FOMC meet
A stronger dollar can hurt global demand for oil by making it more expensive in other countries, and investors were also discouraged by uneven economic data in China, the world's biggest crude importer.
Spot gold was down 0.6% at $1,990.58 per ounce by 10:30 a.m. EDT (14:30 GMT) after rising as much as 0.6% earlier in the session. U.S. gold futures fell 0.6% to $2,003.
The dollar index, which measures the performance of the U.S. currency against six others, slid to a roughly one-year low of 100.78.
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Devina Mehra of First Global in conversation with N Mahalakshmi on Fed rate hike, US banking crisis & India strategy.
Asian currencies rise sharply in comparison with DXY. Korean Won up by 2.3% in comparison with USD. US Fed hikes rates by 25bps, indicates less policy tightening ahead. Catch the latest in commodities with Manisha Gupta.
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The analysts have used data from over 100 policy-tightening cycles starting from 1985
Veteran EM strategist said that Indian will continue to be an attractive investment destination
The minutes also said “almost all” officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50 basis-point hike.
Policy makers are poised to raise their benchmark federal funds rate by a quarter percentage point on Wednesday, to a range of 4.5% to 4.75%, dialing back the size of the increase for a second-straight meeting.
The CEO of the biggest US bank made his comments ahead of US inflation data due Thursday and fourth-quarter results from top banks beginning Friday.
The policymakers forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023.
Fed officials will likely engage in a fraught debate over whether it may soon be time to slow its rate hikes, which are intended to cool the worst inflation in four decades but are also raising the risk of a recession.
The Federal Open Market Committee will raise rates by 75 basis points for a fourth consecutive meeting when policymakers announce their decision at 2 p.m. in Washington on Wednesday
A third issue, that of front-loading the increases, is particularly relevant in this rate cycle.