© Reuters
Investing.com – Philadelphia Federal Reserve Bank President Patrick said Tuesday that the Federal Reserve is not done with a round of rate hikes to reduce inflation and will have to raise them above 5%, but the peak is likely near, and markets see after the data that rates will hit. to 5.5%, with the Fed raising interest rates by 25 basis points in next June.
“From my point of view, we’re not done yet…but we’re probably close,” Harker said in prepared remarks at an event in Philadelphia. “At some point this year, I would expect the interest rate to be constrained enough to keep rates steady and allow monetary policy to do its job.”
Harker previously said in an interview with Reuters last week that moving to a 25 basis point interest rate hike was a good strategy for the US central bank, as he indicated the possibility of rate cuts in 2024 if inflation continues to ease.
“How far above 5%? It will depend a lot on what we see… Today we have an inflation report that was good as it’s trending lower, but not fast,” Harker said. A government report earlier on Tuesday showed a month-on-month acceleration in January, although the annual increase continued to slowly ease.
Other Fed officials said on Tuesday that they are looking forward to how higher interest rates will be needed to tame inflation which, according to the Fed’s preferred measure, is still running at an annual rate of 5.0%.
“I think we’re going to see unemployment rise very slightly, maybe slightly above 4 percent this year. It’s an undervalued advantage that the Fed is dealing with inflation from a position of such labor market strength,” Harker said.
New York Fed President John Williams said on Tuesday that inflation remains very high and the central bank’s actions to ease price pressures will cause some inevitable damage to the economy.
“The Fed has taken strong action to bring down inflation,” Williams said in a speech prepared for a group of bankers in New York. But, although we have seen some moderation in recent months, the inflation rate is still very high at 5% and core inflation rates are very high, he said.
“We must rebalance the economy and bring inflation down to 2% on a sustainable basis,” Williams said. “Our work is far from over,” adding, “We will continue the course until our mission is accomplished.”
Williams, who also serves as vice chair of the Federal Open Market Committee, spoke on the heels of the release of consumer inflation data for January. Although these figures showed a slight moderation in the annual pace of price pressures, they were higher than economists had expected.
Williams also said in his remarks that growth will likely come in at 1% this year. He said the current unemployment rate of 3.4% will likely rise to between 4% and 4.5%. He added that the labor market is currently “very strong” and the rates of wage increases are high.
The markets are now turbulent after the confusing data was issued, as the American was unable to recover strongly enough due to high inflation and the possibility that the Federal Reserve will continue to raise interest rates until the middle of next year, and that the interest rate reduction will not start until 2024.
The index stands neutral without significant change at the level of 103.235, and the important technical levels are concentrated on today’s framework, as follows, according to the Fibonacci reading and the automated analysis from Investing.com:
Support: 102.753, 102.990, 103.136
Resistance: 103.610, 103.756, 103.993
The technical indicator will give the following readings:
As for it, it remains confused today, at the level of $1,853 an ounce, and we see the technical levels of spot gold contracts on Fibonacci reading today:
Support: 1844.78, 1848.34, 1850.53
Resistance: 1857.65, 1859.84, 1863.40
