Chairman Jerome Powell, the head of the Federal Reserve, hinted yesterday that he was about to turn the wheel and impose the first rate hike halt since the Fed started rising rates in March 2022.
Empire, FX Gold
The only person who can turn the wheel is the captain.
When I was a young technical market analyst in the mid-1990s, I received an invitation to speak at the Dow Jones Financial Symposium. I attended one full month of the three-month lecture tour and spoke in eight cities. Top technical analysts with extensive backgrounds in the field were frequently presenters at conferences. I was welcomed into the experienced group of market technicians even though I was still a newbie because my area of study was understanding Japanese candlesticks and the patterns they generated. I had my first encounter with Larry Williams there.
Larry Williams once quizzed me about my understanding of the distinction between a technical analyst and a fundamental analyst during lunch. Without having to waitHe claimed that we technical analysts are like passengers on a ship who are standing at the back of the boat and attempting to determine the direction the ship is headed by observing the waves created by the propellers.
Jerome Powell, the head of the Federal Reserve, suggests a pause in rate increases
Chairman Jerome Powell, the head of the Federal Reserve, hinted yesterday that he was about to turn the wheel and impose the first rate hike halt since the Fed started rising rates in March 2022. delivering a speech in Washington, D.C. at a Fed conference.According to Chairman Powell, the federal funds rate (fed funds) of the central bank is currently at a level where its impact on consumer and business loans is great enough to limit borrowing and spending and slow down economic growth.
"Having come this far, we can afford to carefully consider the data and the changing outlook,"
With inflation at just over 8% and interest rates at near zero in March of last year the Federal Reserve implemented its first interest rate hike of ¼%. This would be the beginning of 10 consecutive ones at each FOMC meeting which took the feds benchmark rate to between 5% and 5 ¼% at the May FOMC meeting.
This comes after some Federal Reserve officials expressed the opposite opinion and hinted that there would be another rate hike at the June FOMC meeting. However, the FedWatch tool from the CME, which measures market sentiment, drastically altered yesterday, anticipating an 81.4% chance that the Federal Reserve would start to pause rate hikes in July and a 64.4% chance that it will do so in June.
Result for Gold
daily chart for gold futures
Powell's statement yesterday made the next Federal Reserve monetary policy's objective clear, which had a very favorable effect on gold pricing. Over the preceding three trading days, gold futures had significantly decreased in value, from $2020 on May 4 to $1959 on Thursday.
After accounting for Friday's gain of $20.10 or 1.03%, the most active June contract for gold is currently fixed at $1979.90 as of 5:55 PM EDT.
