Gold, US Dollar, Fed Meeting – Talking Point
- Gold price The action is U.S. dollar Widely strengthened following the Federal Reserve
- FOMC Authorities leave the federal funds rate and the current pace of asset purchases unchanged
- The Federal Reserve Board says the economy has progressed towards tapering goals
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The Federal Reserve has just released the latest update on monetary policy. FOMC officials have left benchmark interest rates and the pace of asset purchases unchanged as widely expected, but changes in the wording of the press statement have fueled some volatility. Specifically, the Fed has acknowledged that the economy is progressing towards its goals of maximum employment and price stability.
This will allow central banks to begin tapering their quantitative easing programs in the near future. This subtle change in tone takes the tapered timeline one step further. As a result, gold price movements are facing downward pressure as the US dollar soars across the board. Major currency pairs.. Treasury yields have also risen across the curve, jumping to 22 basis points in two years.
Gold price chart with DXY index and Treasury yield for 2 years
But to be fair, the immediate reaction from the market is a bit tricky. This may be because the updated FOMC statement did not specify that there was “substantial” progress. Only that progress has been made. That said, traders are now shifting their focus to the Federal Reserve Board of Govern Powell, who will speak at his follow-up press conference at the end of the time. The market will listen to Powell’s guidance on how close we are. Substantial How further developments, especially tapered discussions, have progressed, and how the downside risk posed by covid’s delta variant affects the tapered timeline.
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When the US dollar soars, gold prices fall.Fed eyes taper started
Source link When the US dollar soars, gold prices fall.Fed eyes taper started