After cutting interest rates by more than a percentage point, Federal Reserve officials are now wondering where to stop – and finding there’s more disagreement than ever.
In the past year or so, prescriptions for where rates should end up have diverged by the most since at least 2012, when US central bankers started publishing their estimates. That’s feeding into an unusually public split over whether to deliver another cut next week, and what comes after that.
Gold prices are showing recovery, but they are now facing an important resistance level. A clear break above this level can open more upside targets, while failure to cross may bring selling pressure again.
The Indian Rupee (INR) edges higher against the US Dollar (USD) at the start of the week. The USD/INR pair drops to near 88.25 after posting a fresh all-time high slightly above 88.50 on Friday. The pair retraced quickly from its all-time high, following likely intervention of the Reserve Bank of India (RBI) to support the Indian Rupee, according to a report from Reuters.
Federal Reserve Chair Jerome Powell opened the door to a September rate cut on Friday, saying in a speech in Jackson Hole that “the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
US Federal Reserve (Fed) Chair Jerome Powell said that they will adopt a new policy framework of flexible inflation targeting and eliminate the ‘makeup’ strategy for inflation, while delivering a speech on ‘Economic Outlook and Framework Review’ at the annual Jackson Hole Economic Symposium.
All eyes are on the Fed tomorrow! – The FOMC will announce its decision on interest rates, a key moment that can trigger significant market volatility.