Market Bets Soar That Fed Will Cut Rates To 2% In 2027

Gold prices rise over 1% on Wednesday amid uncertainty on US trade policies and expectations that the Federal Reserve (Fed) will ease policy through the rest of the year. At the time of writing, XAU/USD trades at $5,204 after bouncing off its worst levels at $5,121. In the State of the Union speech, US President Donald Trump said that the economy is faring ...

Bank of Japan Governor Kazuo Ueda reinforced the central bank’s tightening bias, signalling that further rate hikes remain likely if incoming data strengthen confidence in the Bank’s economic and inflation forecasts. In comments reported by Yomiuri, Ueda said the BoJ’s “basic stance” is to continue raising interest rates if the probability of its growth and price projections materialising increases. While underlying inflation has yet to fully reach the 2% target, policy will be guided to ensure it converges sustainably to around that level without overshooting on a persistent basis. Ueda added that the Bank does not believe it is behind the curve in addressing the risk of excessive inflation, and said there has been no change since January to the projected timing for achieving the price target. He expects inflation to re-accelerate following the current slowdown. Importantly, Ueda flagged upside risks. If the outcome of the spring wage negotiations proves stronger than expected and firms pass higher labour costs through to prices more swiftly, the 2% inflation target could be achieved sooner than currently projected — a comment that tilts hawkish at the margin. Looking ahead, Ueda noted that while the April Tankan survey will be an important input, the BoJ is conducting multiple surveys and does not need to wait for the Tankan release to have sufficient data. With policy meetings scheduled for March and April, he said the Bank will scrutinise all available information and reach a decision, responding to growing market speculation that a rate hike could come as early as April. BOJ GOVERNOR UEDA: DOES NOT EXPECT MAJOR IMPACT FROM NEW TRUMP TARIFFS ON JAPAN BUT MONITORING CLOSELY; BOJ TO REVIEW DATA AT MARCH AND APRIL MEETINGS BEFORE DECIDING ON POLICY – YOMIURI.

Federal Reserve Bank of Kansas City President Jeffrey Schmid said on Wednesday that overly high inflation remains a key problem the central bank needs to address, but he stopped short of saying how ​monetary policy should respond. “I think we have work to do on the inflation side of things,” while “I think we're in a pretty good place for employment,” ...