Gold price jumps as Fed’s Powell explains latest change in Fed speak – by Anna Golubova (Kitco News – March 22, 2023)

(Kitco News) With the banking crisis hitting the markets, the Federal Reserve’s monetary policy might have less work to do, according to U.S. central bank Chair Jerome, who leaned dovish during his press conference, sending gold prices higher.

The biggest change in the Fed’s language after the Silicon Valley Bank fallout was a shift from expectations of “ongoing rate increases” to “some additional policy firming.” “We no longer state that ongoing rate increases will be needed to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate,” Powell told reporters Wednesday.

Since the February FOMC meeting, economic indicators have been stronger than expected. But the events in the banking system are likely to lead to tighter credit conditions and act as an additional tightening mechanism, Powell explained.

“Events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would, in turn, affect economic outcomes.

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