Energy & precious metals - weekly review and outlook
Investing.com — It’s here: the week traders across markets have been waiting for; one that will tell if the Federal Reserve is done with its 16-month adventure of taming inflation with rate hikes and allowing economic forces to do the job after this — a move that could still lead to higher energy prices, complicating matters for the central bank.
Since the Fed skipped a rate increase in June, its first time since March 2022, speculation has been rife that its last hike for this year will be on Wednesday — despite the central bank’s projections showing there could be another before its final policy meeting on Dec. 13.
Weeks ahead of the July 26 rate decision, the reading of Fed tea leaves has been on to discern if the central bank will take last month’s encouraging retreat in U.S. jobs, wages and consumer prices as a sign that it should step aside too.
Economists are already feeling hopeful about the United States dodging a downturn. Inflation cooled in June, while joblessness in the month fell. Those two factors normally have an inverse relationship.
And while labor market growth for the month was the slowest since the coronavirus pandemic ended, employers still created enough jobs to meet the expansion in population — and hiring is still faster than in the pre-outbreak era in 2019.
The European Central Bank signaled earlier this month that it could be ready to pause on rate hikes from September onward. In Canada, meanwhile, inflation dropped to within the control range of the Bank of Canada for the first time since March 2021.
Thus, attention next week will be on not just what the Fed does but also says, given Chairman Jay Powell’s stance at his June news conference that the central bank might be in a position to do
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