Helping gold’s move higher was a sluggish dollar, which was trading near its lowest in 3-1/2 weeks against a basket of major currencies as further signs of weakness in China fanned expectations that the Fed will have to wait longer before any policy tightening.
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However, spot gold remained little changed at $1,156 per ounce.
Minutes from the September meeting showed that the directors were optimistic about the U.S economy but expressed uncertainty on the likely impact of global economic and financial developments.
Federal Reserve chair Janet Yellen may have seen two of her closest allies give up on rate hikes this year.
The Federal Reserve’s benchmark short-term interest rate already should be 2% by a few measures, not the current near-zero level, St. Louis Fed chief James Bullard said Tuesday as he urged the central bank to begin raising the rate.
Panelists continue to expect the strong USA dollar and the economic slowdown in China to weigh on the US economy, while lower crude oil prices and monetary policy easing in Japan and Europe are expected to help.
“Given where I think the economy would go, I wouldn’t expect it would be appropriate to raise rates”, Tarullo said in an interview with broadcaster CNBC when asked if rates should be raised this year. Bloomberg says, its data points that less than 40% of surveyed market experts believe the central bank will increase its interest rates before 2015 reaches its end. Markets in the US will also be closed Monday for a holiday. We need to see a turnaround in the next couple of months or the Fed will inevitably be backed into the corner.
The valuable metallic rose on Monday as merchants reacted to an growing perception that the US Federal Reserve won’t increase rates of interest this yr.
Bullard has been a supporter of rate increase and had opposed the Fed’ decision to delay a rate hike in its last meeting in September.
Brainard’s remarks are the most specific anti-rate hike comments coming from a member of the Fed’s Washington-based Board of Governors, calling for what might have been an extended hold off inside of a rate hike.
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“Real interest rates need to be higher than they are now”, Lacker said on Fox Business on Wednesday. It looks like this is exactly what it’s going to get, with expectations being for a 0.2% decline in price last month and core inflation only rising by 0.1%.
