Wonderful introduction:
Optimism is the line of egrets that go straight up to the sky, optimism is the thousands of white sails on the side of the sunken boat, optimism is the luxuriant grass blowing in the wind at the head of Parrot Island, optimism is the little bits of falling red that turn into spring mud to protect the flowers.
Hello everyone, today XM Forex will bring you "[XM Forex]: Powell pours cold water on expectations of an interest rate cut in December." Hope this helps you! The original content is as follows:
On October 30, spot gold was trading around US$3,950 per ounce in the Asian market on Thursday. Gold prices sharply narrowed their gains on Wednesday. Although the Federal Reserve announced a 25 basis point interest rate cut as expected by the market, the initial optimism in gold prices was very low. Almost diluted by Chairman Powell's cautious remarks; U.S. crude oil traded around $60.18 per barrel. Oil prices rose on Wednesday after data showed that U.S. crude and fuel inventories fell more than expected last week. U.S. President Trump was optimistic about trade talks, which would help ease economic tensions.
The U.S. dollar rose across the board on Wednesday, mainly due to the success of Federal Reserve Chairman Powell in reversing strong market expectations for another interest rate cut in December. Although the Fed announced an interest rate cut as expected by the market, there were significant differences within the decision-making: Governor Millan advocated for a greater reduction in borrowing costs, while Kansas City Fed President Schmid insisted that interest rates should not be cut while inflation continues. This hawkish dissent highlights policy differences within the Fed and provides evidence for Powell to signal caution.
Powell made it clear that it is difficult for Fed officials to reach a consensus on the future path, and the market should not assume that interest rates will be cut again by the end of the year. This statement had an immediate impact, with the market’s expected probability of an interest rate cut in December plummeting to 62% from about 85% in the morning. At the same time, the Federal Reserve announced that it would restart limited purchases of government bonds to ease the pressure of tighter liquidity in money markets.
In this context, the U.S. dollar index rose significantly by 0.63% to 99.28. Major currencies generally weakened against the US dollar: the euro fell 0.56% to US$1.1585; the yen fell 0.56% against the US dollar to US$152.86, although earlier the US Treasury Secretary Bessent urged the Japanese government to provide central bank support.There was room for interest rate hikes and it strengthened for a time.
The pound became one of the weakest performing currencies on the day, falling 0.9% against the dollar to $1.3151, hitting a five-and-a-half-month low. Market expectations for the Bank of England to cut interest rates next week continue to rise as recent data showed signs of easing in the British labor market and unexpectedly stable inflation, creating conditions for the central bank to ease policy. Goldman Sachs has adjusted its forecast accordingly, expecting the Bank of England to cut interest rates next month.
The Canadian dollar was relatively stable on the day, having previously hit a one-month high. The Bank of Canada cut interest rates as scheduled, but also signaled that unless the economic outlook changes, this may be the end of this cycle of interest rate cuts.
South Korea and the United States have reached a trade agreement, and South Korea will invest US$350 billion in the United States, including US$200 billion in cash. The United States will continue to maintain a 15% www.centrdom.infoprehensive tariff on South Korea, and the automobile tariff will be reduced to 15%.
According to Kyodo News: Japanese Prime Minister Takaichi Sanae told the United States that Japan will continue to import Russian liquefied natural gas.
British Prime Minister Starmer opened the door to raising major British taxes.
The Federal Reserve lowered the federal funds rate by 25 basis points to 3.75-4.00%, in line with expectations, but showing a tripartite disagreement among policymakers. Governor Stephen Millan voted for an additional 50 basis points cut, while Kansas City Fed President Jeffrey Schmid preferred to keep rates steady. The results highlighted differing views within the www.centrdom.infomittee on the balance between inflation control and downside risks to growth.
The Fed did not provide clear forward guidance in its statement, reiterating that it would "continue to monitor incoming www.centrdom.information" and be prepared to adjust policy as appropriate if new risks arise.
The www.centrdom.infomittee described economic activity as expanding at a moderate pace, with job growth slowing and the unemployment rate rising slightly but remaining low as of August. Inflation has increased since earlier this year and remains "slightly elevated."
The Fed also acknowledged that uncertainty about the outlook remains high and that downside risks to employment have increased in recent months.
The Bank of Canada is expected to significantly cut interest rates by 25 basis points, taking the overnight rate to 2.25%, but hinted that this may mark the end of the current easing cycle. The central bank said that if inflation and economic activity develop in line with its October forecasts, the current policy rate is "about the right level" to strike a balance between supporting growth and keeping inflation close to the target. The wording was interpreted as indicating that 2.25% was the likely terminal rate, barring a major economic shock.
The Bank of Canada acknowledged in an accompanying statement that U.S. trade actions and uncertainty are having a "serious impact" on key export-oriented industries. As a result, the World Bank expects GDP growth to remain weak in the second half of the year before gradually picking up in 2026. Expected 2025The economy will grow by 1.2% annually, 1.1% in 2026, and 1.6% in 2027, and excess production capacity is expected to be absorbed only slowly.
The Bank of Canada described the labor market as weak, with job losses concentrated in trade-sensitive industries, while hiring remains sluggish across the economy.
On inflation, the Bank of Canada pointed out that overall CPI was 2.4% in September, slightly higher than expected, while its preferred core indicator remained around 3%. Broader alternative indicators point to underlying inflation near 2.5 per cent, but the Bank of Canada expects price pressures to gradually ease, with headline CPI to remain close to 2 per cent over the forecast horizon.
The above content is all about "[XM Foreign Exchange]: Powell pours cold water on expectations of a December interest rate cut". It is carefully www.centrdom.infopiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
Due to the author's limited ability and time constraints, some contents in the article still need to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues: