Global markets witnessed strong fluctuations, as global stock markets and gold prices declined in conjunction with the strong dollar’s rise against major currencies, after the Federal Reserve’s decision to raise interest rates by 75 basis points, which represents the third consecutive hike during 2022, to record the interest rate at its highest level since The history of the global financial crisis in 2008. The Fed’s expectations also showed that the interest rate could rise to 4.4 percent by the end of this year. He also expected the federal funds rate to reach 4.6% in 2023, and expectations showed that the interest rate could decline during 2024 to reach 3.9%.
After the decision was issued, the Fed’s statement showed its fears of rising inflation as Jerome Powell, Federal Reserve Chairman insisted on working to reduce inflation to the target rate of 2 percent. As for the rate of interest rate hike, Powell said that it will depend on the data, as he stated, “At some point it will be appropriate to slow the rate hike.” Powell also expressed his concern about the rise in wages, which is one of the most important factors in the expansion of inflation. Finally, Powell stated, “No one knows if this operation was… [لتشديد السياسة النقدية] will lead to a recession, or how important that recession will be.”
Gold falls and the US dollar rises after the Fed’s decision
After the decision, precious metals prices recorded temporary gains before strong declines, as gold fell 0.55% to $1,660.38 an ounce. Silver also fell 0.84% to $19.46 an ounce. This is at 07:44 AM GMT.
As for the dollar’s trading, the US currency rose against the major currencies, as the dollar index rose 0.19% to record 111,5752 points. The US dollar against the Japanese yen increased by 1.12%, and the pair is trading at 145.7225. The US dollar against the Swiss franc also rose by 1.05%, to record the dollar-franc pair at 0.97658 levels. At the same time, the US dollar rose against the Canadian dollar by 0.18%, to record levels of 1.34886. While the New Zealand dollar fell against the US currency by 0.37% to trade at 0.58312.
On the other side, The British pound witnessed a correction against the US dollar, as it rose by 0.08% to record levels of 1.12785. The euro also rose against the US dollar by 0.02% to hit 0.98397.