- Gold bids jump after Fed releases latest rate call and dot plot.
- Growth expectations in 2025 are getting hampered by lopsided US policy calls.
- Markets await Fed Chair Powell’s latest press conference.
On Wednesday, Gold surged, reaching $3,040 during intraday trading as the Federal Reserve (Fed) made its latest interest rate decision, keeping rates unchanged at 4.5%. While markets generally anticipated this hold, any modifications to the Fed’s outlook could unsettle investors who are awaiting comments from Fed Chair Jerome Powell.
The Fed noted that growth projections for 2025 have been significantly hindered by the Trump administration’s erratic policy of announcing trade tariffs on social media only to later retract them. As a result, the Federal Open Market Committee (FOMC) revised its end-2025 Gross Domestic Product (GDP) forecast to 1.7%, a sharp decline from the 2.1% estimate shared in December.
Additionally, the median dot plot suggests the end-2025 interest rate will remain at 3.9%, showing little change since the last policy meeting. The FOMC plans to slow down its balance sheet runoff starting in April. Rate markets still indicate a greater than 50% chance of a quarter-point rate cut in June, although the likelihood has slightly decreased, with 42% of traders expecting rates to stay the same.
More to come…
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