Fed rate hikes

Share to Twitter Share to Linkedin Topline The stock market was mixed Friday after the U.S. economy added back a better-than-expected 528,000 jobs in July, with investors now anticipating that a strong labor market will keep the Federal Reserve on its path of aggressive interest rate hikes to bring down inflation. Key Facts The Dow Jones Industrial Average rose 0.2%, nearly 100 points, while the S&P 500 fell 0.2% and the tech-heavy Nasdaq Composite dropped 0.5%. The S&P 500 fell despite a strong non-farm payrolls report : The labor market added back 528,000 jobs in July—easily surpassing the 258,000 expected by analysts, according to the Bureau of Labor Statistics on Friday. Unemployment ticked down to 3.5%, while wage growth continued to rise, up 0.5 percentage points from the previous month and over 5 points higher than a year ago, signaling that inflation pressures continue to remain. With the labor market still running … [Read more...] about Stocks Under Pressure Despite Strong Jobs Report As Investors Fear Bigger Fed Rate Hikes

- A + A (Aug 4): Gold was steady as investors weighed comments from the Federal Reserve which signaled it will implement further interest-rate increases to contain price pressures. Bullion is hovering near a four-week high after rising 0.3% on Wednesday, as market jitters over the fallout from US House Speaker Nancy Pelosi’s visit to Taiwan boosted some haven demand. That has eased after her trip ended. Fed officials pledged the central bank would continue an aggressive fight to cool an inflation rate that’s at a four-decade high, even if higher rates cause the risk of an economic downturn. Fed Bank St. Louis President James Bullard said he favors a strategy of “front-loading” big interest-rate hikes, and he wants to end the year at 3.75% to 4%, while his Richmond and Minneapolis counterparts -- Thomas Barkin and Neel Kashkari -- said the central bank was committed to lowering inflation and a recession could happen. “The primary driver for gold will be Wall … [Read more...] about Gold steady as traders weigh Fed rate hike, inflation outlook

Share to Twitter Share to Linkedin Topline The Bank of England on Thursday predicted that the U.K. will fall into a recession in the final quarter of this year as it announced its steepest rate hike in nearly three decades, following similar moves by the central banks of the Eurozone and the U.S. as all of them attempt to clampdown on runaway inflation. Key Facts The Bank of England raised interest rates by 50 basis points—its sharpest hike in 27 years—to 1.75%. The central bank also warned that inflation in the U.K. could rise to 13% by the end of the year—up from 9.4% in June, worsening the country's already severe cost of living crisis. The steep inflation means the real household income of Britons will “fall sharply” for the remainder of 2022 and 2023, the central bank noted. The Bank of England blamed inflation on the “near doubling” of natural gas prices since May due to Russia’s throttling of supplies to Europe and the … [Read more...] about U.K. Central Bank Forecasts Recession This Year—Joining U.S. And Eurozone With Historic Rate Hike

- A + A BENGALURU/OAKLAND, California (Aug 5): The S&P 500 ended lower on Friday (Aug 5), weighed down by Tesla and other technology-related stocks, after a solid jobs report torpedoed recent optimism that the US Federal Reserve (Fed) might let up its aggressive campaign to reign in decades-high inflation. Data showed US employers hired far more workers than expected in July, the 19th straight month of payrolls expansion, with the unemployment rate falling to a pre-pandemic low of 3.5%. The report added to recent data painting an upbeat picture of the world's largest economy after it contracted in the first half of the year. That deflated investors' expectations that the Fed might let up in its series of rate hikes aimed at cooling the economy. "This is all about the Fed. A very strong jobs report like this puts pressure on the Fed to tighten for longer," said Adam Sarhan, the chief executive of 50 Park Investments. "The market is scared the Fed is going to … [Read more...] about S&P 500 ends down as jobs data rekindles Fed rate hike fear

- A + A BENGALURU (Aug 15): Gold prices slipped on Monday (Aug 15), weighed down by a rebound in the US dollar and expectations of further interest rate hikes from the Federal Reserve to tame high inflation. Spot gold was down 0.4% at US$1,794.78 per ounce, as of 0352 GMT, after rising about 1.6% last week. US gold futures fell 0.3% to US$1,810. The US dollar erased earlier losses to gain 0.1% against its rivals, making gold more expensive for buyers holding other currencies. "Gold looks like in some consolidation here for a week or two before resuming the upward march towards US$2,000 yet again. There may be even some who will feel the need to take profits to offset property portfolio weakness," said Clifford Bennett, chief economist at ACY Securities. "Gold is likely to be supported around US$1,785. A slip to US$1,760 cannot be ruled out, but this would represent fantastic long-term buying opportunity." Meanwhile, Richmond Fed Bank President Thomas Barkin … [Read more...] about Gold dips as US dollar firms, Fed rate-hike fears linger

Representative image Gold hit a more than three-week high on Friday and was bound for a weekly rise, supported by a softer dollar and bets that the Federal Reserve may cool the pace of rate hikes as economic risks deepen. Spot gold rose 0.3 percent to $1,761.05 per ounce by 1040 GMT, and has gained about 2 percent this week. U.S. gold futures gained 0.4 percent to $1,776.20. "Gold is drawing strength from a softer dollar and cooling Fed hike bets,” said FXTM analyst Lukman Otunuga, adding soft economic data could keep bolstering gold. The U.S. economy contracted in the second quarter, driving an over 1 percent gain in safe-haven gold on Thursday. Close Should Friday’s U.S. PCE data suggest signs of inflation peaking, this could be a welcome development for gold, while "a red hot report is likely to feed the inflation beast – dragging gold lower in the process as market players boost rate hike bets,” Otunuga added. Gold remains inversely correlated to the … [Read more...] about Gold bound for weekly gain on softer dollar as sharp rate-hike bets cool

- A + A HONG KONG (Aug 4): The dollar was on the front foot on Thursday, helped by several U.S. Federal Reserve officials pushing back against suggestions they will slow the pace of interest rate hikes, while the pound was flat ahead of a Bank of England meeting. The dollar index, which measures the greenback against six peers, was steady in early trade at 106.39 having eked out small gains overnight. It is up around 0.5% this week, reversing the trend of the previous two weeks. "The dollar weakened last week after the (policy setting) Federal Open Market Committee meeting because the market wanted to believe that the Fed was pivoting in a dovish manner because of slowing growth," said Sim Moh Siong, currency strategist at Bank of Singapore. "This week, there are a lot more FOMC speakers pushing back against this idea, all singing the same tune: ‘we are not done, and you should expect more rate hikes’," he added . San Francisco Fed President Mary Daly and … [Read more...] about Dollar climbs as Fed officials suggest more rate hikes to come

- A + A NEW YORK/BENGALURU (Aug 5): Wall Street's main indexes fell on Friday, with technology stocks bearing the brunt of a selloff, after a solid jobs report bolstered the case for the Federal Reserve to press ahead with interest rate hikes. US employers hired far more workers than expected in July, the 19th straight month of payrolls expansion, with the unemployment rate falling to a pre-pandemic low of 3.5%. The report provided the strongest evidence yet that the economy was not in recession. "It is a blockbuster number, clears the path for the Fed to continue with the hawkish viewpoints that have been expressed recently. I think a 75 basis points hike in September is most likely," said Dean Smith, chief strategist at FolioBeyond. "There was such a strong urge for people to call the all-clear on inflation, and we are just not there. Inflation is becoming more embedded and it is actually accelerating, not decelerating." Growth index, which houses technology … [Read more...] about Wall Street falls as solid jobs data fuels rate hike worries

- A + A (Aug 8): Gold held its biggest decline in two weeks after strong US jobs growth tempered recession fears, suggesting the Federal Reserve is likely to persist with steep interest-rate hikes to curb inflation. Bullion dropped 0.9% on Friday as US nonfarm payrolls jumped by more than double what economists had forecast. That spurred gains in the dollar and Treasury yields, reducing the appeal of non-interest-bearing gold. The data support the case for the Fed to raise its benchmark rate by 75 basis points next month, matching the moves it made in June and July. It also means the central bank may need to keep borrowing costs higher for longer, contrary to market expectations for rate cuts in 2023. US inflation figures later this week will provide more clues on the likely path. The precious metal has still rallied for the last three weeks, drawing haven support from fears of a global recession and heightened US-China tensions. Beijing has been conducting … [Read more...] about Gold holds drop after US jobs data support rate-hike outlook

- A + A BENGALURU (Aug 9): Asian currencies were subdued on Tuesday, as the US dollar remained flat ahead of July inflation data, while the baht scaled to a five-week high with investor focus on a central bank meeting that is expected to kick-start Thailand's tightening cycle. The Philippine peso eased 0.3% on slower-than-expected economic growth rate of 7.4% in the second quarter, giving the central bank more reason to further tighten monetary policy to curb inflation. With inflation near a four-year high, the market is widely expecting a bigger hike on Aug 18 by the Bangko Sentral ng Pilipinas (BSP). Analysts at Goldman Sachs, ING and Barclays expect a 50 basis point (bps) hike by BSP. Analysts at Dutch bank ING expect the BSP to maintain its hawkish bias for the rest of the year despite a disappointing growth report even as triple threats of inflation, rising borrowing costs and high debt-to-GDP ratio prove to be headwinds for the economy. "We believe, … [Read more...] about Asian currencies tepid; Thai baht gains ahead of likely rate hike