According to more than 30 economists surveyed by the Financial Times and Chicago Booth, the US Federal Reserve (FED) will be forced to keep interest rates higher than expected in the context of persistent inflation, and expects only a maximum of two cuts in 2024, with the first coming between July and September.
If this forecast comes true, the cut would be slower than previously expected in financial markets, where traders expect three cuts this year, with the first expected in June or July, according to an earlier Bloomberg survey.
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Mr. Jerome Powell, Chairman of the FED. Photo source: Mark Schiefelbein, AP Photo |
Previously, in an interview with Yahoo Finance, Cleveland Fed President Loretta Mester also predicted that the Fed will have 3 interest rate cuts in 2024, but this could change after the regular meeting on March 19 and 20. On the contrary, Mr. Raphael Bostic - President of the Atlanta Fed branch expected 2 cuts, according to information on Bloomberg.
Faced with the rapidly rising inflation situation, speaking to the Financial Times, Professor Evi Pappa, at Carlos III University in Madrid, said that FED Chairman Jerome Powell could wait until inflation has dropped to 2% before announcing an interest rate cut, instead of relying on previous forecasts.
On the contrary, Mr. Hilde Bjørnland - professor of economics at BI Norwegian Business School said that US economic growth could affect the Fed's willingness to cut interest rates, emphasizing that purchasing power in the US is stronger than in European countries.
Also via the Financial Times, Mr. Vincent Reinhart - former FED official, currently the chief economist at Dreyfus and Mellon affirmed that the US Presidential election in November will affect the timing of interest rate setting. " Although the data shows that the best time to cut interest rates is September, the golden time politically is June" - Mr. Vincent Reinhart said.
The cut may be later and smaller than expected, combined with the possibility of the Fed keeping interest rates high, has put many investors in a very negative situation, especially for the gold market. Specifically, interest rates not decreasing will lead to an increase in gold prices, on the other hand, gold is also an asset that does not bring interest rates, so the prospect of higher interest rates for a longer time will not be beneficial for gold prices.
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| Saigon Jewelry Company Limited (SJC) lists the price of SJC gold, at 4:00 p.m. on March 18, 2024 |
Recorded at 4:00 p.m. on March 18, on Kitco, the world gold price was at 2,154 USD/ounce, down 1.6 USD compared to early morning. At the same time, domestically, Saigon Jewelry Company Limited (SJC) listed the afternoon SJC gold price at 79.4 million VND/tael for buying and 81.42 million VND/tael for selling.
Recently, the domestic gold price has been constantly fluctuating according to the world gold price, increasing and decreasing from a few hundred to a few million VND/tael within a day, making many investors feel insecure and worried. For example, on the afternoon of March 13, the price of gold bars decreased by 2.7 million VND/tael in the selling price compared to the early morning and lost the 80 million VND/tael mark, but only the next day it jumped up by nearly 2 million VND/tael, returning to the 81.5 million VND threshold.
In the current context, most experts advise that investors should not chase the market but should only buy when prices fall.
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