Michelle Bowman from the US Federal Reserve Board of Governors commented today Fed monetary policy, US economy and neutral rate levels. Overall, her remarks were quite hawkish, signalling more cautious needed and probably much higher neutral rates level in the US. Despite on that, and rising dollar supported by yields, gold gains today 0.7% to $2650 per ounce, partially due to geopolitical tensions and improving technicals. The X profile EuropeInvasion informed that Russian forces prepare to launch the RS-26 intercontinental ballistic missile weighing 36,000 kg with a range of 6,000 km in a possible attack on Kyiv, after Ukraine used ATACMS and UKs Storm Shadow missiles, hitting Russia.
- The US central bank should pursue a cautious approach on monetary policy. The Fed may be closer to the neutral policy rate than policymakers currently think, inflation remains a concern.
- My estimate of the neutral policy rate is much higher than before the pandemic. I agreed to support the November Fed rate cut, as it aligns with my preference to lower rates gradually.
- I am pleased that the November Fed policy statement provided optionality in deciding future policy adjustments. Progress in lowering inflation appears to have stalled.
- We need to be patient and cautious about what an immigration policy approach may actually be.
- Even when we bring inflation down, prices are still more expensive.
- The Fed needs to be flexible. It's concerning we are recalibrating policy but haven't reached the inflation goal.
- The October payrolls likely rose at the recent average pace after accounting for hurricanes, Boeing strike, and the low response rate.
- I see a greater risk to the price stability mandate, though deterioration in labor conditions is possible.
- The economy is strong, the labor market is near full employment, and inflation is elevated.
- Sideways move in Core Personal Consumption Expenditures inflation since May reflects increased demand for affordable housing, and inelastic housing supply.
- The unemployment rate is below my own estimate of full employment, the rise this year reflects weaker hiring.
GOLD extends its upward momentum despite strengthening US dollar with possible EMA50 test (the orange line) at $2654 per ounce. This move came in after testing the lower band of the upward price channel.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
