Collective decline in stocks, gold and the dollar..and the Fed must contradict expectations!

Collective decline in stocks, gold and the dollar..and the Fed must contradict expectations!
Collective decline in stocks, gold and the dollar..and the Fed must contradict expectations!
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© Reuters.

Investing.com – US stock markets opened markedly lower today. While the dollar and gold fell together, so that the red color dominated the flows of most assets at the current moments.

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Al-Erian.. The Federal Reserve must defy expectations

The economist, Mohamed El-Erian, said in a press interview that he should pay more than what the markets expect in his first meeting this year, because inflation may stop its downward trend in the coming months if interest rates are stopped strongly.

Al-Erian made it clear that he supports an increase of about 50 basis points during the upcoming February meeting, especially since inflation is expected to stabilize near the level of 4% in the second half of this year. He also prefers to finish tightening now and the economy is strong, rather than wait until the economy is weak and tightening will be very difficult at this time.

El-Erian said there are reasons for and against the Fed’s move of about 25 basis points, which makes the February meeting difficult for policymakers.

interest forecast

The US markets are almost certain that next month will take another step towards slowing down the pace of increases, after inflation levels declined significantly in the latest reading, according to the US “CNBC” network.

Analysts at CNE say that economic indicators indicated a 94.3% probability that the US Federal Reserve will raise interest rates by 0.25 percentage points during the two-day meeting.

“If this trend continues, it will take the Fed’s benchmark borrowing rate to a target range of 4.5%-4.75%,” the analysts added.

Although the odds of a rate hike haven’t changed much over the past weeks, economic data has helped solidify the notion that after a series of blistering hikes – four consecutive increases of three-quarters of a point in 2022 – the Fed is ready to get back on its feet. And apply the brakes a little bit to calm the markets, because what happens in America does not stay in America but affects the entire world.

markets now

Wall Street at the opening

The main indices on Wall Street opened lower today, as fears of a recession increased due to weak quarterly business results from Microsoft (NASDAQ:) and Boeing, while technology stocks led the losses.

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The Nasdaq Composite Index fell 187.74 points, or 1.66 percent, to 11146.53 points.

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The industrial index fell 195.60 points, or 0.58 percent, to 33,538.36 points.

The index opened down 34.24 points, or 0.85 percent, to 3,982.71 points.

gold now

It fell during the current moments to levels near $1930 an ounce, down by 0.35%.

On the other hand, futures contracts for the yellow metal fell during these moments of today’s trading, at levels near $1931 an ounce, down by 0.2%.

dollar now

It decreased slightly in the current moments, to now reach the levels of 101,507 points, down by 0.15%.

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