U.S. President Donald Trump spoke about the recently appointed Fed Chair Kevin Warsh and monetary policy.
Addressing the nation from Air Force One, Trump said he hopes interest rates will go down but that he is leaving the decision-making power to the new Fed Chair, Warsh. According to Trump, the U.S. is in good shape and the markets need to rise.
Trump: I Want Interest Rates to Drop, But the Final Decision Is Warsh’s
Trump also indicated that he did not mind if Warsh did not lower interest rates and stated that he would “leave the interest rate decision to Warsh” at the next meeting. In response to questions about Iran and oil prices, he stated that the U.S. has achieved a major success regarding the Iran issue and that Iran currently does not possess the conditions to acquire nuclear weapons.
Regarding oil prices, he said the government has multiple options.
Trump announced that he would hold meetings with artificial intelligence (AI) companies next week and that representatives from these companies would visit the White House.
Gold Prices Give Up This Year’s Gains Following Nonfarm Payrolls Data
Following the release of today’s strong U.S. nonfarm payrolls data, expectations for interest rate hikes increased in the market. Gold prices came under pressure following the release of the data and gave up the gains it had made year-to-date. During U.S. trading hours, the gold price fell by 3.5% and dropped below $4,320 per ounce. At the same time, bond yields and the U.S. dollar exchange rate also rose.
Currently, the strong performance of the labor market leaves the Fed enough room to raise interest rates, but the ongoing high tension in the Middle East, which is driving up energy prices, is a cause for concern. Rising interest rates are generally considered negative for non-yielding precious metals.
The declines were not limited to the precious metals market. While the S&P 500 index lost more than 2% in value, losses on the technology-focused Nasdaq exceeded 4%.
