The market stands at a critical crossroads as interest rates enter an equilibrium zone, but new growth drivers from technology and resources are rekindling the risk of inflation returning.
🔸 According to analysts, the current federal funds rate target of 3.50% to 3.75% is very close to neutral. At this level, monetary policy is no longer exerting excessive pressure but has not yet fully loosened.
🔸 However, inflation in 2026 could prove stickier than expected. The primary causes stem from the massive investment wave in Artificial Intelligence and the significant price increases in commodities and industrial metals like Gold( $XAU ), Silver( $XAG ). These are cost push variables that could complicate matters for policymakers.
🔸 With the market confident that the Fed will hold rates steady this week, attention is shifting to the appointment of the next Fed Chair. Investors are betting on a new figure who might be more inclined towards aggressive rate cuts.
When inflation is driven by production realities and technology rather than just money supply, will the new Fed Chair dare to loosen aggressively or be forced to maintain high rates for longer to curb prices?
News is for reference, not investment advice. Please read carefully before making a decision.
