Fed Testimony in Focus Amid Cautious Policy Stance
Investor attention is now centered on upcoming remarks from Federal Reserve Chair Jerome Powell, who is scheduled to testify before Congress later today. On Tuesday, Powell reiterated the Fed’s data-dependent approach, stating, “We are not in a hurry to move interest rates.”
Kansas City Fed President Jeff Schmid echoed the sentiment, suggesting that policymakers have time to assess inflationary risks linked to U.S. tariffs before taking action.
While Powell’s tone leaned cautious rather than dovish, it helped stabilize gold prices following the geopolitical pullback, as markets interpreted the comments as reinforcing a patient policy stance.
Markets Still Expect Rate Cuts Despite Hawkish Rhetoric
Despite the Fed’s measured language, futures markets continue to forecast policy easing. According to CME FedWatch data, traders are pricing in roughly 50 basis points of rate cuts by the end of 2025, with the first reduction expected as soon as September.
A weaker dollar and falling Treasury yields, likely outcomes of looser monetary policy, are traditionally supportive of gold. “As long as inflation remains contained and geopolitical risks don’t flare up again, Fed expectations will be the key driver for bullion,” said one strategist at ING.
With the ceasefire holding and policy signals mixed, gold remains range-bound but vulnerable to further shifts in central bank rhetoric and macro headlines.
