Earlier this month, the Consumer Price Index, which the Fed uses as its preferred measure of Inflation, jumped from 5% to 5.4% in June – to its highest level since 2008. Meanwhile, core CPI rose from 3.8% to 4.5%.
The hot reading now positions, the Federal Reserve’s July meeting as a major focal point for the markets.
There's no doubt that the Fed is in a tough position. On the one hand, higher inflation calls for the tapering of its historic quantitative easing program. However, on the other hand, the potential risks to growth from the highly contagious COVID Delta Variant – does not warrant a change in their monetary policy stance.
The conflicting narratives between higher inflation concerns and worries of slower growth in the second half of the year will make the Fed's job especially difficult this time around.
If one of two 5 letter words – either DELTA or TAPER make their way into the FOMC statement that will inevitably set the stage for how precious metal prices will trade throughout the rest of this quarter.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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