US Federal President Jerome Powell finds himself in a difficult situation with the interest rate decision on Wednesday, as working to avoid a credit crisis requires a flexible monetary policy, while fighting high inflation requires the opposite, as expectations indicate this time to 70% to stabilize interest rates, compared to about 30% to raise about 25 basis point, which represents a 10th consecutive year of interest and brings the interest rate to its highest level since 2007.
The Fed may find inflation figures supportive of their aspirations for the monetary tightening cycle. The Consumer Price Index (CPI) is scheduled to be released today. There is something that traders are unaware of, as the CPI calculation process has changed. For a specific statement, and we are comparing over a period of one year, everything will be fine. There will be no problems with inflation or in the markets. But in the case of comparison over two years, the period will be longer, which means a bigger economic problem. This is for the sake of showing that the economy is strong and solid and reducing inflation, but they are now facing major crises, where the game now is not (CPI) but (GDP) (GDP and unemployment rates). .
It is expected that the consumer price index will show that inflation has declined slightly, as the Fed’s target made inflation 2%, which leaves an outlet for the Fed to stop raising interest at this meeting, as the main problem that banks have today is that they own a lot of US Treasury bonds and lose money, and it is possible The US economy is expected to enter a recession by the end of this year, while the onset of recession may be delayed
In terms of gold, it is traded based on the assumption that US interest rates will remain constant, but with any rise in interest, gold will likely decline to the 1900/1909 areas.
Therefore, dear esteemed ones, we would like to warn you of the fluctuations of today and tomorrow in the markets as a result of the Federal Reserve’s decision regarding interest and the inflation rate. We wish you success in your trading and take caution
