Numerous reports detail that US Federal Reserve officials are determined to tighten monetary policy and increase the federal funds rate until inflation is eased in America. Chicago Fed President Charles Evans made clear Tuesday that the central bank is likely to maintain larger-than-usual interest rate increases until inflation is addressed.
Fed ‘nowhere near’ when it comes to tighter policy, central bank ‘nowhere to go’
The Federal Reserve is in trouble as inflation in America is at its highest level since the 1980s. Tuesday, a Report Quoting three members of the US central bank indicating that policy makers at the Federal Reserve remain convinced of the need for further rate hikes to tame the rising inflation in the country.
San Francisco Fed President Mary Daly explained during a LinkedIn interview “We remain completely resolute and united” in lowering inflation. Daly stressed that the Fed was “nowhere near” in terms of implementing monetary policy measures and in terms of fighting inflation, and said the central bank still had “a long way to go.”
Daly noted, “My typical view, or the view I think is probably more likely, is that we raise interest rates and then hold them for a while at whatever level we think is appropriate.” Loretta Meester, president of the Federal Reserve Bank of Cleveland, was of the same opinion Tell The Washington Post (WP): We have more work to do because we haven’t seen this shift in inflation.
Chicago Fed President Charles Evans shared his opinion this Tuesday as well. Evans explained He told reporters that the Fed is likely to continue large rate hikes until inflation drops. While talking about larger-than-normal price increases in the 75 basis point range, Evans also made clear that a 50 basis point rate hike could still occur.
“If you really think things haven’t improved… 50 basis points is a reasonable assessment, but 75 basis points could also be good. I doubt more will be requested,” Evans said, amid hawkish comments from Fed members yet On Tuesday afternoon (EST), the value of the cryptocurrency, stocks and gold markets all plummeted.On the other hand, the US dollar has reinforced Against the Japanese yen and other major fiat currencies after a short recession.
Volatility hits stocks, gold and cryptocurrencies
By the closing bell on Tuesday, all major stock indices, including the Dow Jones Industrial Average, Nasdaq, New York Stock Exchange, and the S&P 500, were down. Cryptocurrency markets also pared some gains and market capitalization hovered above $1.13 trillion. Bitcoin (BTC(Down below $23,000 per area unit and Ethereum)ETH) Below $1,600 per coin on Tuesday.
During Tuesday, both leading crypto assets managed to climb once again above those areas. The next day on August 3, the entire cryptocurrency economy was up just over 2%. Stocks and the crypto economy are starting to show more volatility as tensions between China and Taiwan escalate. Gold has also fallen this month as one ounce of pure gold was exchanged at $1,810 per unit on July 1, and today gold is trading for $1,765 per unit.
Analysts say the recent decline in gold is due to the strength of the US dollar DXY indicator The charts show that the dollar is still strong after it fell last week. “Gold pared gains after Wall Street became optimistic that tensions between the world’s two largest economies would spiral out of control,” Edward Moya, chief market analyst at OANDA, told Kitco News. “A strong dollar is weighing on gold as well, as the dollar’s decline over the past two weeks appears to be over.”
What do you think of the comments from various Fed members and the market reaction after the hawkish comments and tensions between China and Taiwan? Tell us what you think about it in the comments section below.
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