Today in 21th February 2024 we have this coming ! what do i expect ? (by Arman Shaban)
• For the upcoming FOMC Meeting Minutes on February 21, 2024, the market will be looking for clues on the timing and magnitude of the Fed’s next interest rate cut, as well as its assessment of the inflation and growth outlook. The Fed kept the interest rate unchanged at 5.25%-5.50% in its January meeting, but hinted at a possible rate cut later in the year, citing subdued inflation and global uncertainties. However, the recent data on consumer and producer prices showed higher-than-expected inflation in January, raising doubts about the Fed’s willingness to ease monetary policy. The CME FedWatch Tool shows that the market is pricing a 75% chance of a 25 basis points rate cut in June, and a 25% chance of no change.
• Therefore, the market reaction to the FOMC Meeting Minutes will depend on whether the Fed confirms or contradicts the market expectations. If the minutes show that the Fed is more concerned about inflation and less inclined to cut rates, gold prices may fall, as it would boost the U.S. dollar and real interest rates. Conversely, if the minutes reveal that the Fed is more worried about growth and more open to easing, gold prices may rise, as it would weaken the U.S. dollar and real interest rates. Additionally, any comments on the global economic and geopolitical risks, such as the trade tensions, the coronavirus outbreak, and the U.S. presidential election, may also influence the gold prices, as they affect the demand for safe-haven assets.
Prepared by : Arman Shaban