Federal Statements Transforming the Markets: A Decline in US Market, Gold, and the Rise of the Dollar – July 2019 Updates and Developments

Investing.com – Interest swaps now show that the Fed will cut rates next July. Although the Fed did not give any indications of a rate cut.

Two Feds spoke today, Neil:

• Wage growth eased somewhat as the labor market remained strong
• Inflation has fallen, but is still above the Fed’s 2% target.
• Banking sector turmoil may be the core of the economic slowdown
• The Fed will not change its target at 2% in the near future
• Once we get inflation down to 2%, we will have discussions about changing the final target
• I don’t see that the labor market is at its strongest right now
• If the markets are right, then inflation is a strongly declining market, and we may bring prices to normal levels
• If inflation is rooted in the economy, interest rates will remain high for much longer
• I tend to be more critical, and data is what drives expectations
• I don’t see a collapse in consumer spending, or a slowdown in services for the economy
• My belief is that once inflation ends, we will return to a low inflation, low interest environment
• We will keep a close eye on the debt ceiling, but that is up to the executive wing of the government and Congress.
• Inflation is falling but its resistance is still strong, which means that interest rates will remain high for a longer period
• The inversion of the yield curve is a real stress for banks

Developments of the banking crisis that is pressing on Wall Street today

Bac West shares fell by more than 24%, amid fears of a new bankruptcy.

The FDIC said that banks with more than $50 billion in assets would pay 95% of the holdings. Banks will face billions of dollars in additional fees to make up for the Silicon Valley failure.

The agency faces billions of dollars in deficit after the collapse of Silicon Valley.

markets now

Retracts by 300 points. And the S&P fell by 0.40%, with the stability of the Nasdaq index, and the rise of the Fear Vix index by 3%.

Gold is reeling in light of the rise in the American dollar, to record a decline of 0.86%, to reach a price of $2,019 an ounce.

The dollar index records 101.910.

It is declining to $2,013 an ounce, with a decrease of 0.80%.

While the losses deepened, with a drop of $75 per barrel, and West Texas Intermediate crude falling by $71 per barrel. OPEC stated that oil production fell by 191 thousand barrels per day in April, to 28.60 million barrels per day. The organization believes that economic growth is stable at 2.6%. While the global demand for oil increased by 2.33 million barrels per day in 2023.

OPEC believes that the US debt ceiling will have catastrophic repercussions if it is not raised.