“Wall Street Optimistic on Possible Debt Ceiling Deal While Gold Experiences Differences”

Investing.com – Wall Street’s major indexes rose at the open on Monday on optimism about a potential deal to raise the US debt limit as the deadline approaches. While gold is witnessing noticeable differences between spot and futures contracts, despite the decline in the dollar.

Treasury Secretary Janet Yellen hinted over the weekend that the US would avoid default.

“I’m optimistic,” Yellen said during a meeting of G7 finance ministers on Saturday. “I think the negotiations are very active, as I was told they found some areas of agreement.”

Yellen told CNBC last week that failure to reach an agreement on the debt ceiling would “lead to a financial mess” as the Treasury Department has currently set June 1 as the date when it may fail to meet its obligations. President Joe Biden is expected to host top congressional leaders on Tuesday for debt ceiling talks.

On Monday, investors digested May data from the Empire State Manufacturing Survey, which showed a collapse in manufacturing activity in New York. Where the poll recorded -31.8, less than the experts’ estimate of -3.7 points, while the previous reading recorded 10.8 points.

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Federal Reserve statement a while ago

Minneapolis Federal Reserve Bank President Neel Kashkari confirmed on Monday that inflation is “very high” and that the Fed has a long way to go before reaching its inflation target.

Kashkari further noted that the labor market is not as strong as it was nine months ago, but said it is still strong overall. “We shouldn’t be fooled by a few months of good data,” he added.

While Rafael Bostick, a president in Atlanta, said a little while ago that he does not expect any cuts this year even if there is a recession, because he does not see inflation declining as quickly as market participants think, indicating that if there are any developments, “we may have to to raise it.”

Bostick told CNBC that there is still a long way to go to bring inflation down to the Fed’s 2% target, though progress has been made in bringing it down toward that target.

Bostick asserted that if he is biased in a decision about interest rates, then they are biased towards increasing a little bit more rather than cutting rates.

His comments came as the Federal Reserve has raised interest rates 10 times since March 2022 in an effort to bring down inflation, which a year ago was at its highest since the early 1980s.

Also in an interview with CNBC on Monday, Chicago Fed President Austin Goolsby said they need to watch more data coming in, noting that there is still a lot to show for the effects of a rate hike.

He continued, “We have to be more aware, as we want to bring inflation back to the target track without starting a recession.”

Pointers now

It now settles at 33,299 points.

It rose to 4,127 points, or 0.08%.

While the compound rose by 0.21 percent to 12309 points.

markets now

It fell by 0.06% to 2018 dollars.

While it rose by 0.17% at 2013 dollars an ounce.

It fell by 0.15%, at 102.35 points.

It rose 1.8% to $75.5 a barrel.

Texas crude gained nearly 1.9% to $71.36 a barrel.

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