Daily Digest Market Movers: Gold price edges lower as Fed officials suggest interest rates should stay higher for longer
- The US weekly Initial Jobless Claims increased by 222K for the week ending May 11 from 232K in the previous week, above the 220K estimated, according to the US Bureau of Labor Statistics (BLS).
- Housing Starts rose by 5.7% MoM to 1.36 million in April, while Building Permits dropped by 3% MoM in April to 1.44 million.
- Atlanta Fed President Raphael Bostic said he saw signs of cooling inflation in the recent CPI report, but he prefers to watch the May and June data to gain confidence that the inflation doesn’t turn back the other way.
- Cleveland Fed President Loretta Mester said policy was well positioned, and it was too soon to say progress on inflation had stalled.
- Richmond Fed President Tom Barkin noted the central bank needs to keep borrowing costs high for longer to ensure inflation is on track to its target, citing higher prices in the services sector.
- Financial markets are currently pricing in nearly 75% odds of a Fed rate cut in September, an increase from 65% earlier in the week. The markets are also pricing in full 25 basis point (bps) rate cuts before the end of the year, according to the CME FedWatch Tool.
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