The economy is all a blur

News for today, Thursday, January 27

The International Monetary Fund warns about new rate hikes soon. Such an urge to tackle the inflation problem is partially connected with governments striving to restore their economies. Even when a policymaker like Jerome Powell of Fed announces a smooth transition, risky stocks are to fall dramatically. This confirms the general increase in gold demand we noticed yesterday — the investors are more and more into low-risk equities.

Speaking of Fed, yesterday it came up with a less aggressive solution than some have expected. The interest hike might take place in the middle of March. Markets, disturbed by the long wait, have reacted negatively: Nasdaq fell by 3.13%, Japanese Nikkei 225 decreased by 3.11%, and European STOXX 600 lost 0.78%.

“There’s a risk that the high inflation we’re seeing will be prolonged, there’s a risk that it will move even higher. We have to be in a position with our monetary policy to address all of those plausible outcomes,” — said Jerome Powell.

USD index increased 0.40% reacting to Fed’s monetary policy shifts together with a depressing trend in European markets. It has achieved the highest rate since mid-December. On the opposite, oil futures went down as the economy of the biggest oil user seems unstable.

The price of Brent crude is $88.46, WTI — $87.09, GBP/USD — 1.3421, EUR/USD — 1.1201, and gold costs $1813.65 per ounce.