Michelle Bowman from the US Federal Reserve Board of Governors commented today Fed monetary policy, US economy and neutral rate levels. Overall, her remarks were quite hawkish, signalling more cautious needed and probably much higher neutral rates level in the US. Despite on that, and rising dollar supported by yields, gold gains today 0.7% to $2650 per ounce, partially due to geopolitical tensions and improving technicals. The X profile EuropeInvasion informed that Russian forces prepare to launch the RS-26 intercontinental ballistic missile weighing 36,000 kg with a range of 6,000 km in a possible attack on Kyiv, after Ukraine used ATACMS and UKs Storm Shadow missiles, hitting Russia.
- The US central bank should pursue a cautious approach on monetary policy. The Fed may be closer to the neutral policy rate than policymakers currently think, inflation remains a concern.
- My estimate of the neutral policy rate is much higher than before the pandemic. I agreed to support the November Fed rate cut, as it aligns with my preference to lower rates gradually.
- I am pleased that the November Fed policy statement provided optionality in deciding future policy adjustments. Progress in lowering inflation appears to have stalled.
- We need to be patient and cautious about what an immigration policy approach may actually be.
- Even when we bring inflation down, prices are still more expensive.
- The Fed needs to be flexible. It’s concerning we are recalibrating policy but haven’t reached the inflation goal.
- The October payrolls likely rose at the recent average pace after accounting for hurricanes, Boeing strike, and the low response rate.
- I see a greater risk to the price stability mandate, though deterioration in labor conditions is possible.
- The economy is strong, the labor market is near full employment, and inflation is elevated.
- Sideways move in Core Personal Consumption Expenditures inflation since May reflects increased demand for affordable housing, and inelastic housing supply.
- The unemployment rate is below my own estimate of full employment, the rise this year reflects weaker hiring.
GOLD extends its upward momentum despite strengthening US dollar with possible EMA50 test (the orange line) at $2654 per ounce. This move came in after testing the lower band of the upward price channel.
Source: xStation5
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