Overnight Market Review (2022.6.14) On Monday, the market’s fears that the Fed’s aggressive interest rate hikes will lead to an economic recession intensified. US stocks fell collectively, the US dollar rose, US bond yields inverted again, and gold prices fell.
Global gold markets: Gold prices fell sharply on Monday, as the dollar rebounded on bets of a sharp interest rate hike by the Federal Reserve, denting the appeal of gold and other precious metals. Gold futures settled down 2.3 percent at $1,831.80 an ounce.
Fed policymakers will release their forecasts for the ultimate goal of this round of rate hikes at the end of this week’s meeting. The Fed will also forecast how high the unemployment rate, currently at 3.6%, may rise before the economy slows enough to reduce inflation. Fed policymakers are all but committed to raising rates by 50 basis points each this week and at their July meeting, following a 50 basis point rate hike in May and the start of a balance sheet reduction this month. And some institutions even predict that the Fed will not rule out a 75 basis point interest rate hike this week.
Looking ahead, the Fed’s FOMC meeting on interest rates, which will end tomorrow, is expected to dominate the market tone. As the U.S. CPI released last Friday continued to hit a new high in more than 40 years, some people are now raising expectations for a rate hike by the Federal Reserve at this meeting by 75 basis points.
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