Fed Watch: Rate Stays Put, Trump Tariffs Flare, and Gold Gets a Glow‑Up
Jerome Powell’s “wait‑and‑see” vibe is back in full force for Wednesday’s Federal Reserve gathering. If the CME FedWatch alarm bell rang 99.9 % for a hold‑tight stance, the markets are thrilled to hear the same from the Fed’s own pricing: 85.5 % that rates will stay in the 4.25‑4.50 % band.
After the decision, Powell’s post‑meeting press conference and the iconic dot‑plot will be scrutinized for the tiniest hint that the Fed might change its tune. Everyone knows the dot‑plot is like a crystal ball: one dot, one perspective.
Why the Data Thinks We’re on a “Cooling” Track
- Inflation eases a bit: U.S. CPI ticked up just 0.1 % in May, translating to a 2.4 % year‑over‑year rate.
- Jobs are booming: Non‑farm payrolls added 139,000 jobs, surpassing the 126,000 forecast.
Even with the good news, Chair Powell remains on edge. The “Liberation Day” tariffs—Trump’s threat‑to‑lift‑tariffs playbook unleashed back in April—haven’t yet shown their effects. Experts fear they could push inflation higher, but the exact magnitude is still in the sandbox, as Trump continues to tweak and delay tariff policy. Meanwhile, a 10 % global baseline tariff, if kept, would add further spice to the mix.
Geopolitics: From the Holy Land to Gold Bars
The Israel‑Iran showdown saw Israel hitting nuclear and military target sites, prompting Tehran to fire back. Israel’s chilling alert to 300,000 Tehran residents to evacuate last week hints at a deeper conflict bubble.
Geopolitical drama is a bull in a china shop for financial markets. There’s a clear pattern: when uncertainty spikes, investors flock to safe havens—gold is the go‑to in these moments.
Gold’s Current Mood
Gold’s trajectory has been a smooth ride since mid‑September 2023, where it hovered near $1,813 per ounce. Recent gains have formed a chain of higher lows and highs, with the 50‑day moving‑average (the red line—yes, that one’s trending! ) acting as a supportive cushion.
- Trending Up: The MACD sits on the upside, 12‑period above 26‑period, and the histogram nudges positive.
- Potential Break: If gold crosses the all‑time high of $3,500, we could see a bold leap to $3,600 and even $3,700—ready for the next round‑number test.
- Support Check: The 50‑day moving average holds water, with a swing low at $3,121 as the next safe zone.
Investor sentiment? Tense, but the silver‑lining is that gold is ready to serve as the dare‑devil of the market’s safe‑haven portfolio. Keep your eyes peeled—every dip could be a buying spree.
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