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Federal Reserve Chairman Warsh will hold a monetary policy press conference in ten minutes.On July 30th, Federal Reserve officials kept interest rates unchanged, but the vote was divided, showing that some policymakers are increasingly convinced that a rate hike is needed to curb rising inflation. Logan, Hammark, and Kashkari all voted against a 25-basis-point increase. This marks the fifth consecutive time officials have chosen to keep rates unchanged. The rest of the committees post-meeting statement was entirely consistent with the statement released after the June meeting. Officials reiterated their commitment to "achieving price stability." However, the dissenting votes suggest that for Fed Chair Warsh, who just took office in May, continuing to hold rates steady will face greater challenges if inflation concerns intensify. Trump has repeatedly called for rate cuts, including this Monday. Warsh, nominated by Trump to be Fed Chair earlier this year, stated that he would ensure policy decisions are not influenced by politics.On July 30th, in this interest rate decision, three of the five regional Federal Reserve presidents voting on the Federal Open Market Committee (FOMC) voted against it: Cleveland Fed President Hammark, Minneapolis Fed President Kashkari, and Dallas Fed President Logan. All three unanimously advocated for a 25 basis point rate hike. This is the first time since September 2016 that the Fed has seen three unanimous dissenting votes in a single policy decision, reflecting a growing voice within the Fed supporting a tightening policy. Fed Chairman Warsh, who supports maintaining the current interest rate, has consistently emphasized the Feds responsibility to curb inflation. He is expected to be asked at the press conference at 2:30 AM Beijing time why he believes continuing to be patient remains the most appropriate policy option.Market expectations indicate that the market is no longer fully pricing in a September rate hike by the Federal Reserve.Nick Timuraos, the Feds mouthpiece: The FOMC decided to keep interest rates unchanged with a 9-3 vote. Three regional Fed presidents voted against a 25-basis-point rate hike. This is the first time since 2016 that the Fed has received three unanimous dissenting votes in a single policy decision.

Gold Set For Fourth Week of Losses As Dollar Strengthens, Fed Rate Hike Bets

Aria Thomas

May 16, 2022 10:10

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Gold lost more than 1 percent on Friday and is poised for its fourth consecutive weekly decline, as the dollar's strong run and the prospect of more aggressive U.S. interest rates drained bullion demand.


At 1:54 p.m. EDT (1754 GMT), spot gold declined 0.7% to $1,808.89 per ounce, after hitting its lowest level since February 4 at $1,778.6 per ounce. This week, it has decreased roughly 4 percent.


U.S. gold futures finished at $1,808.20, down 0.9%.


Thursday, U.S. Federal Reserve Chair Jerome Powell stated that the struggle to contain inflation would "involve some pain" as a result of the impact of rising interest rates.


David Meger, director of metals trading at High Ridge Futures, stated, "Gold is being pulled down as a result of the Federal Reserve's commitment to hike interest rates at a rapid pace and the dollar's exceptional strength."


The market will pay close attention to inflation figures in the future.


The dollar index was poised for its sixth straight weekly increase, hovering close to a 20-year high. 


Although bullion is viewed as a hedge against inflation, it pays no interest and is subject to rising U.S. short-term interest rates and bond yields.


"A resurgence in global stock markets coupled with decreased risk aversion in the market to conclude the trading week is also negative for safe-haven metals," Kitco senior analyst Jim Wycoff wrote in a note.


Wall Street's major indexes were driven higher by growth stocks. [.N] [MKTS/GLOB]


The spot price of silver increased by 1.6% to $20.98 per ounce, but has declined by around 6% this week, the most since late January.


Platinum decreased by 0.8% to $936.51. Palladium rose 1.5% to $1,936.83 on Friday, after dropping almost 8% on Thursday.


Meger added, "Overwhelming concerns about supply disruptions in Russia take precedence on the palladium market, and there is aggressive purchasing on dips since prices have fallen considerably."

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