What is worth breaking down is Walsh's attitude at the press conference. He clearly declined to provide forward-looking guidance, saying “Don't prejudge the outcome of the meeting” and that unless a crisis occurs, the market should not rely too much on the Federal Reserve's forward-looking guidance. At the same time, he announced that the number of FOMC interest rate resolution meetings will be reduced from 2027, that part of the meetings will be dedicated to discussing long-term monetary policy strategies, and that interest rate votes will not be held or policy statements will be issued. The policy statement's assessment of the economy was raised from “steady expansion” to “strong expansion” in September, while maintaining the judgment that “inflation is still high”, removed the previous statement that “this action will support inflation to return to the 2% target in a timely manner” and replaced it with “the accumulation of more information will help determine an appropriate position.” What this combination means for gold is that short-term losses have been weakened, but medium-term constraints have not been lifted. The lack of interest rate hikes itself is known information. The fall in gold prices before the resolution was partially priced as a result, so there was no panic sell-off after the resolution was implemented. However, Walsh refused to give any path guidance, adding that two members publicly advocated an immediate interest rate hike, and the probability of interest rate hikes in December is still at 80% high by traders, which means that expectations of “higher and longer” interest rates have not been weakened. As far as gold is an interest-free asset, the 10-year US Treasury yield is stable above 5%, and real interest rates remain high. The core suppression logic of holding costs may still exist.
Zhitongcaijing · 3d ago
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What is worth breaking down is Walsh's attitude at the press conference. He clearly declined to provide forward-looking guidance, saying “Don't prejudge the outcome of the meeting” and that unless a crisis occurs, the market should not rely too much on the Federal Reserve's forward-looking guidance. At the same time, he announced that the number of FOMC interest rate resolution meetings will be reduced from 2027, that part of the meetings will be dedicated to discussing long-term monetary policy strategies, and that interest rate votes will not be held or policy statements will be issued. The policy statement's assessment of the economy was raised from “steady expansion” to “strong expansion” in September, while maintaining the judgment that “inflation is still high”, removed the previous statement that “this action will support inflation to return to the 2% target in a timely manner” and replaced it with “the accumulation of more information will help determine an appropriate position.” What this combination means for gold is that short-term losses have been weakened, but medium-term constraints have not been lifted. The lack of interest rate hikes itself is known information. The fall in gold prices before the resolution was partially priced as a result, so there was no panic sell-off after the resolution was implemented. However, Walsh refused to give any path guidance, adding that two members publicly advocated an immediate interest rate hike, and the probability of interest rate hikes in December is still at 80% high by traders, which means that expectations of “higher and longer” interest rates have not been weakened. As far as gold is an interest-free asset, the 10-year US Treasury yield is stable above 5%, and real interest rates remain high. The core suppression logic of holding costs may still exist.
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