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November 1st - Cleveland Federal Reserve President Hamak said on Friday that she is open to reforming the interest rate target used by the Federal Reserve to implement monetary policy. Speaking at an event hosted by the Dallas Fed, she noted profound changes in the money market structure, indicating a consideration of shifting from the current federal funds rate target to other interest rate indicators. "I think its time to explore more broadly how to best implement monetary policy," Hamak emphasized in her remarks. This statement echoes her recent consensus with Dallas Fed President Logan that financial market pricing mechanisms have gradually moved away from the traditional anchoring effect of the federal funds rate.Federal Reserves Bostic: Determining the appropriate use of the discount window is a challenge.Federal Reserves Hamak: The discount window is not the preferred funding tool for banks, but rather a backup tool.On November 1st, Atlanta Federal Reserve President Bostic made it clear on Friday that a December rate cut is not a given. Speaking at the Dallas Fed meeting about the monetary policy outlook, he emphasized, "I want to reiterate that every meeting is a live decision; we have no predetermined path, and we will not deviate from the principle of data dependence." Bostic specifically pointed out that although the market has strong expectations for a rate cut at the end of the year, it is wise for Fed Chairman Powell to clearly state after this weeks policy meeting that a December rate cut is not a certainty. He stated, "The dot plot figures indicate different opinions, but dont over-interpret them. We will rely on the data to ensure appropriate decision-making."The total number of oil rigs in the United States for the week ending October 31 will be released in ten minutes.

Forecast for Gold Price: XAU/USD corrects to near $1,970 on UBS-Credit Suisse deal; Fed policy observed

Daniel Rogers

Mar 20, 2023 13:16

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After UBS announced Credit Suisse's rescue plan, the gold price (XAU / USD) corrected to near $1,970. The precious metal is estimating a cushion near the $1,970.00 support, but further correction appears likely.

 

Investors should be aware that market participants have been pouring funds into the yellow metal as a hedge against the volatility associated with a potential banking crisis. The UBS acquisition has mitigated concerns of a global banking crisis. The purchase agreement has signaled that central banks are willing to provide assistance to commercial banks in an effort to restore investor confidence.

 

The US Dollar Index (DXY) is fluctuating around 103.80 as the market anticipates the Federal Reserve's (Fed) interest rate decision on Wednesday. The analysts at Danske Bank anticipate that Federal Reserve Chair Jerome Powell will raise interest rates by 25 basis points (bps) despite the recent turmoil and banking sector concerns.

 

S&P500 futures have erased the majority of their morning gains, indicating that the UBS-Credit Suisse agreement is insufficient to calm global banking fears. As the banking debacle has yet to reveal its true colors, negative market sentiment would persist for some time. In the meantime, the UBS-Credit Suisse merger has reduced demand for US government bonds, which were previously regarded as safe-haven investments. This has increased 10-year US Treasury yields to 3.46 percent.


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