The battle goes on: According to the Fed’s July meeting minutes, the U.S. central bank is unlikely to consider pulling back on interest rate hikes until inflation came down substantially.
After a meeting where the Fed approved a 0.75 percentage point rate hike, Fed policymakers vowed to lower inflation, which is now running well above the Fed's desired 2% target, close to a multi-decade high.
Read our SPOTLIGHT to see how interest rate hikes can affect the economy and your savings.
The gold price was near a two-week low Thursday as the dollar firmed after the Fed minutes suggested the central bank would keep raising rates to tame inflation.
Here’s how the prices of gold, silver, platinum, and palladium have changed over the past week:
U.K. inflation hit another 40-year high in July as rising food and energy prices continued to intensify the country’s historic cost-of-living crisis. The Bank of England expects inflation to top out at 13.3% in October. (CNBC)
The Bank of England has raised interest rates six times in a row in an effort to curb runaway inflation. This month, it raised rates by the most since 1995 and forecasts the U.K will enter its longest recession since the global financial crisis.
Read our SPOTLIGHT to see what central banks are doing to fight soaring inflation.
After a brief rally, oil hit a 6-month low on Wednesday amid concerns about the prospect of a global recession that would weaken demand. (Reuters)
"The oil market is struggling to shake off recession fears, and there is little to suggest that this will change any time soon," said Stephen Brennock of oil broker PVM.
The current stock market rally is premature as earnings deteriorate and Fed rate hikes stall the economy: “Stocks marched higher after markets priced in a slowing Fed hiking cycle on softer-than-expected U.S. CPI inflation. We don’t think the equity bounce is worth chasing. We see inflation persisting and settling above pre-Covid levels.” (BlackRock)
“We see the Fed hiking rates to levels that will stall the economic restart. Corporate earnings may weaken more as consumer spending shifts and profit margins contract. This is not a typical business cycle, so we expect differentiated regional and sectoral effects,” BlackRock said.
Bitcoin, stocks, or gold? Read our SPOTLIGHT to see what is the best investment today.
Due to increasing mortgage rates and building material costs, U.S. homebuilding declined to its lowest level in over 1-1/2 years in July, raising the possibility that the housing market may drop much more in the third quarter. (Reuters)
Last month, housing starts fell 9.6% to 1.446 million seasonally adjusted annual units, the lowest level since February 2021.
European energy prices are surging as a scorching summer boosts demand while natural gas supplies from Russia remain limited. The focus is also shifting to how the region will withstand winter demand shocks. (Bloomberg)
As utilities burned more coal to fill up the gaps created by the reduced supply of gas from Moscow, coal prices rose to a record high. Standard gas futures fluctuated drastically, rising as much as 5.1%.
Patrick Karim and Kevin Wadsworth, technical analysts and the co-founders of Northstar & Badcharts, believe that Bitcoin and precious metals have hit critical "breakout" points and are about to make another major move. According to analysts, gold is ultimately poised to reach at least $2,400 by 2023. (Kitco)
For Bitcoin, it is more likely that it will see another fall prior to a significant bull run.
“[It is more] probable that [Bitcoin] is going to break to the downside and head down towards that $10,000 to $12,000 target,” Wadsworth said.
What else is happening
China warned the US against sending navy ships across the Taiwan Strait and threatened to take more action in the aftermath of House Speaker Nancy Pelosi's visit to Taipei. Beijing views such Taiwan transits as an escalation by the US and an effort to support the "separatist" government in Taipei. (Bloomberg)
The comment comes after Washington said it will undertake air and sea transits via the Taiwan Strait after China launched military drills near the island in response to Pelosi’s visit.
President Joe Biden signed a comprehensive tax, climate, and health care bill on Tuesday, capping a significant legislative win for Democrats before the November midterm elections. (Bloomberg)
The measure, known as the Inflation Reduction Act, contains key parts of Biden’s policy agenda, including tackling the climate crisis and lowering our energy costs.
East Africa is experiencing its worst drought in at least 40 years, which is causing a humanitarian catastrophe. More than 80 million people in Somalia, Ethiopia, Kenya, South Sudan, Uganda, and Djibouti lack access to food, and over half of them must sell their things to survive. (Bloomberg)
Extreme weather patterns have been brought on by climate change, and countries in Africa are now having to deal with drought and flash floods more frequently. The continent's problems have been made worse by the coronavirus epidemic and Russia's invasion of Ukraine, making it more expensive and challenging to secure supplies of food, gasoline, and fertilizer.
Paleontologists have recently discovered a tiny, armored dinosaur in southern Argentina that had never been seen before. This dinosaur presumably walked upright on its rear legs approximately 100 million years ago. (Reuters)
They said that Jakapil kaniukura, a dinosaur from the Cretaceous Period, would have been well-protected by rows of bony disk-shaped armor from its neck, back, and all the way down to its tail. It was around 5 feet (1.5 meters) long and weighed 9 to 15 pounds (4-7 kg).
See you next week!