Fed Chair Powell’s take on economy is awaited as risks loom

Analysts said growing USA political uncertainty, reinforced by the criminal convictions of two of Trump’s ex-advisors, would keep the dollar under pressure, despite the United States embarking on greater monetary tightening than elsewhere. In total, gold prices have fallen by 10.8 percent this year.

The Fed minutes are expected to cement market assumptions for two more interest rate increases this year, which do not bode well for non-interest yielding bullion, although analysts said this was already largely factored into the gold price.

Japanese shares ended little changed with a positive bias and the yen was flat as investors waited for the outcome of trade talks between the USA and China.

The president’s top economic advisers have repeatedly urged Trump not to attack the Fed. Determining the “ideal” or most “effective” rate of inflation is therefore a fine art, and one of the most complex and crucial functions of the Fed.

The dollar fell against a host of currencies after the president said he was “not thrilled” with the Fed and its president Jerome Powell, adding that he should be doing more to back the usa during its trade dispute with other superpowers. Trump nominated Powell a year ago to replace former Fed Chair Janet Yellen. Trump has departed from this past practice and said he would not shy from future criticism should the Fed keep lifting rates.

Trump also said China was manipulating its yuan currency to make up for having to pay tariffs on imports imposed by Washington. He took on the job earlier this year; his term expires in 2021. “The Federal Reserve is an independent board of governors, and they will be independent”.

Paul Manafort, Trump’s former campaign manager, was also found guilty Tuesday of 8 counts brought against him by special counsel Robert Mueller, with these counts potentially carrying 80 years behind bars. As interest rates decrease, the cost of borrowing decreases, typically leading to more capital in the market with increased spending and investment, and – in theory – a growing economy.

US stocks climbed, sending the S&P 500 Index to an intraday record, as investors speculated the Trump administration would ease trade tensions with China.

The Reserve Bank held its benchmark rate for a fifth meeting in a row in July but warned it was ready to tighten policy despite the weak economy in response to rising rand-driven inflationary pressures and offshore volatility.

The precious metal has come under pressure this year, sliding more than 12% since hitting a high of $1,365.23 in April amid United States interest rate hikes and a soaring dollar.

The S&P 500 Index rose 0.2 percent to 2,862.96 as of 4 p.m. Trump said to Reuters about Powell.

Germany’s DAX Index rose 0.4 percent to the highest in more than a week. Trump’s remarks break a fifty-year taboo against direct remarks from a sitting President on the Fed and the Fed Chairman.

“Powell has set a course for the Fed, and he is going to stay on that course unless economic conditions change dramatically”, said David Jones, the author of several books on the history of the Fed.