๐ฅ A critical week for the Fed and the markets!
๐บ๐ธ The Fed faces a tough test this week after inflation stayed above target, with bets increasing sharply on a rate hike.
๐ Markets are currently pricing in around an 87% probability of a 25-basis-point rate hike, moving the rate from 3.50%โ3.75% to 3.75%โ4.00%.
๐ Decision date: Wednesday, September 16
๐ธ๐ฆ 9:00 PM Saudi time
๐๏ธ Press conference: 9:30 PM
โ ๏ธ Why is the decision risky?
In August, US inflation came in at 3.4% year-on-year, while core inflation rose 0.3% month-on-month versus expectations of 0.2%, increasing fears of continued price pressures.
๐ฏ The strongest outlook right now:
๐บ A 25-basis-point rate hike
๐บ A chance of further tightening later if inflation remains high
๐บ Markets will closely watch the Fedโs statement and its forward-looking outlook more than the rate decision alone.
๐ฅ And what about gold?
Rate hikes and hawkish statements = often negative pressure on gold ๐
But hinting that the hike may be limited, or that inflation is heading down = could give gold a strong boost ๐
๐ฅ Most importantly: the market may move violently at the moment of the decision, then reverse direction with the press conferenceโฆ so itโs not enough to just track the rate decision.
๐ This week could be one of the strongest trading weeks for gold and the dollar.
๐บ๐ธ The Fed faces a tough test this week after inflation stayed above target, with bets increasing sharply on a rate hike.
๐ Markets are currently pricing in around an 87% probability of a 25-basis-point rate hike, moving the rate from 3.50%โ3.75% to 3.75%โ4.00%.
๐ Decision date: Wednesday, September 16
๐ธ๐ฆ 9:00 PM Saudi time
๐๏ธ Press conference: 9:30 PM
โ ๏ธ Why is the decision risky?
In August, US inflation came in at 3.4% year-on-year, while core inflation rose 0.3% month-on-month versus expectations of 0.2%, increasing fears of continued price pressures.
๐ฏ The strongest outlook right now:
๐บ A 25-basis-point rate hike
๐บ A chance of further tightening later if inflation remains high
๐บ Markets will closely watch the Fedโs statement and its forward-looking outlook more than the rate decision alone.
๐ฅ And what about gold?
Rate hikes and hawkish statements = often negative pressure on gold ๐
But hinting that the hike may be limited, or that inflation is heading down = could give gold a strong boost ๐
๐ฅ Most importantly: the market may move violently at the moment of the decision, then reverse direction with the press conferenceโฆ so itโs not enough to just track the rate decision.
๐ This week could be one of the strongest trading weeks for gold and the dollar.