Today, Chairman Powell gave testimony to the House Financial Services Committee. This is a section of his semiannual report, which he will present to the Senate Banking Committee tomorrow and conclude. His opening statement was nearly identical to his opening statement from the press conference last week. Most importantly, the chairman did not say anything new this week about the upcoming rate hikes or inflation.
There were two main takeaways from the press conference last week and today’s testimony: First, he and other Fed officials agree that interest rates should rise again. Second, he anticipates that interest rates will continue to rise throughout the remainder of this year. He stated that it was a “pretty good guess” that the central bank would raise rates twice more this year when he spoke to Congress. “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” Powell said, emphasising the justification for additional rate hikes. The CME’s FedWatch tool predicts a 71.9% likelihood of a one-fourth percentage rate hike at the meeting next month, despite a slight decline in the likelihood of a rate increase at the July FOMC meeting.
Gold futures traded at their lowest value since March 17 as a result of the weaker U.S. dollar’s inability to support any price increase today. Gold futures traded as low as $1929.30 today. After accounting for a decrease of $4.20, or 0.22%, the most active August contract is fixed at $1943.50. Today, the dollar lost 0.42 percent, bringing the index to 101.695.
Silver lost $0.53, or 2.3%, in July, bringing the most active contract to $22.70. Silver has experienced a steeper percentage decline during price corrections, just as it has experienced a larger percentage gain when both gold and silver traded at higher prices.