After a poor start to the week, the precious metals sector is seeing a turnaround as markets continue to calibrate for the Federal Reserve Chair Jerome Powell's keynote at the Jackson Hole symposium.
"[The theme] suggests a focus on the economy's supply side … As pressure on global supply chains eases, that implies that a reduction in inflation could now be achieved with a relatively modest easing in demand. It is a key basis for our view that a recession can still be avoided over the coming quarters. The Fed is clearly hoping for a similar outcome, and officials may try to bolster that case next week," said Capital Economics senior U.S. economist Andrew Hunter.
"We do not think the Fed will paint itself into a corner ahead of the September 20-21 FOMC meeting. Rather, we expect the Fed to try and manage market expectations at Jackson Hole," said BBH Global Currency Strategy head Win Thin. The big takeaway everyone is looking for is additional insight into the Fed's thinking on inflation, the economy, and the future of monetary policy."What Powell reveals during the speech or chooses to hold back could set the tone for global markets in the weeks ahead," Otunuga pointed out.
"He may try to send a clear message that even if they have a slower pace of rate hikes, that won't signal a lower peak rate or that they will be quick to cut rates," explained OANDA senior market analyst Edward Moya."After this week, Wall Street should not be surprised if Fed fund futures start pricing in rate hikes for next year. This could be the week many return from vacation and double down on their bear market rally calls.
Wrong typing 1754.
And withering as the day progresses…back to $1729 then $1675 then $1500. Dead money