© Reuters.
Investing.com – There are now some important data releases that should give an overview of the future, as the just-released weekly unemployment data missed expectations to change all the calculations and baffle the markets.
Today’s data reflects a favorable vision of the Fed’s vision, which desires a weak labor market and greater unemployment to achieve a soft recession and then lower inflation, as requests for unemployment benefits rose, i.e. came higher than market expectations, and higher than the week before last.
Unemployment data
It recorded 196,000 applications, higher than the forecast of experts, who expected 190,000. Especially since it had recorded 183 thousand the week before last.
Thus, it recorded 189.25 thousand in 4 weeks, after it recorded 191.75 thousand the week before last.
The Unemployment Weekly Index provides very timely data, quantifying the amount of individuals who claimed unemployment insurance for the first time during the past week and traders view the unemployment rate as an indicator that gives little indication of the future performance of the economy. The two downtrends have a positive effect on the country’s currency, as working people tend to spend more money.
Gold and unemployment according to science
The analyst and financial expert, Omar Sayyah, said that the rule says that an increase leads to an increase, especially during the first day of the news being issued, and if it decreases, gold will decrease with it.
But remember that the effect here will be doubled if the rates of unemployment complaints rose more than expected, and gold will be directly affected by the rise, while if the rates of unemployment complaints rose according to the expected, the effect will be a slight increase not exceeding $10. As the relationship between gold and unemployment is positive.
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The interest must be raised
A senior US central bank official said, yesterday evening, Wednesday, that it still needs to raise to permanently reduce inflation.
The New York Federal Reserve Chairman, John Williams, was quoted by the media during an event in the Wall Street Journal as saying, “We still have work to do” on raising interest rates.
He added, “The forecast the Fed gave in December — a cap on the federal funds rate at 5.25% this year — “still looks very reasonable for what we will need to do this year in order to balance supply and demand and bring down inflation.”
The Fed raised the target range for the federal funds rate by 25 basis points in a modest increase last week to 4.50%-4.75%, but Chairman Jerome Powell indicated immediately after that meeting – and again in an interview on Tuesday – that there was likely to be a need. for additional increments.
In a panel discussion, Williams said that the Fed’s monetary policy may need to remain constrained for “a few years” in order to push back against inflationary pressure built up by massive pandemic-era stimulus programs and several years of low interest rates.
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Above expectations
The governor, Christopher Waller, also warned that it could rise higher than current market expectations.
Federal Reserve Chair Christopher Waller spoke about inflation, warning that the battle is far from over and could lead to higher interest rates than markets expect.
Maintain the plan
Speaking to the Arkansas Agribusiness Conference, Waller spoke about the January jobs report, which showed non-farm payroll growth of 517,000.
He noted that the labor market is “strong” and could fuel consumer spending that would maintain upward pressure on inflation.
Waller said the Fed needs to maintain its current action plan, which has seen eight interest rate increases since March 2022.
Promising results
“We see this effort is starting to pay off, but we have more to go,” Waller said at the Arkansas State University Agribusiness Conference in prepared remarks.
Waller added, “It could be a long battle, with interest rates rising for longer than some people currently expect… but I will not hesitate to do what is required to get my job done.”
Gold and the dollar now
The US dollar rose during the current moments to levels near $ 1881 an ounce, up by 0.35%.
On the other hand, futures contracts for the yellow metal rose during these moments of today’s trading by 0.15%, up to levels near $1893 an ounce.
Interact now with the unemployment data just released, and deepen its losses, now reaching 102.6 levels, down by about 0.6%.
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