Fed Holds Rates, “No Problem” for Gold
The Federal Reserve held its meeting overnight and decided to keep interest rates unchanged and said it could raise rates at any time if necessary, given the ongoing tariff war that could lead to inflation and weaken the labor sector.
Powell also said Wednesday (5/7) at the end of a two-day meeting in Washington. "If the large tariff increases that have been announced are continued, it is likely to result in higher inflation, slower economic growth, and higher unemployment,"
"The impact on inflation could be short-lived, representing a one-time shift in the price level," he said. However, "it is also possible that the impact on inflation could be more persistent." Fed officials unanimously kept rates in the range of 4.25% to 4.5%.
From here we can see that what Powell has done does not show that he is afraid of all the provocations and "pressure" that Trump has put on him, because as is known, Donald Trump himself actually wants the Fed to lower their interest rates and considers that Jerome Powell is not the right person to be the chairman of the Fed.
With interest rates maintained and tensions still heating up in India-Pakistan, gold prices are still seen to increase in the short and medium term because they are considered accustomed to being in a relatively high interest rate environment today. However, in the long term, the potential for an increase remains but has decreased due to the cooling tariff war and the possibility of interest rates being raised again if inflation, economic slowdown and increased unemployment occur.
Source: (mrv@Newsmaker)
