On Thursday, the price of gold went up. It almost reached $2,030 for each ounce. This increase helped gold recover some of its losses from earlier in the week. A weaker U.S. dollar also contributed to this rise in gold’s price. At the same time, investors were paying close attention. They were waiting for new information about inflation in the United States. This information is important because it can hint at what the Federal Reserve might do next. Specifically, investors are interested in the Federal Reserve’s future policy decisions.
Market watchers are now predicting that the main inflation rate will rise to 3.1% in December. They also believe that the core inflation rate, which is a key measure, might drop to 3.8%. If this drop happens, it would be the lowest level for core inflation since May 2021.
Meanwhile, traders are estimating the chances of the Federal Reserve starting to ease its strict economic policies. They think there is a 64% chance that this could start as early as March. This is a significant change from a week ago. Back then, traders believed there was almost a 90% chance of the Federal Reserve starting to ease policies in March.
Some financial analysts are suggesting that the Federal Reserve might begin easing its policies in May instead of March. They say this because the job market in the U.S. is currently strong. Moreover, inflation is still above the 2% target set by the Federal Reserve.
John Williams, the President of the New York Federal Reserve, spoke on Wednesday. He said it is too soon to start thinking about reducing interest rates. He believes the Federal Reserve still has more work to do. Their goal is to bring inflation down to the 2% target.