U.S. Federal Reserve officials are committed to tightening monetary policy and raising the federal funds rate until inflation in America is mitigated. Chicago Fed President Charles Evans explained Tuesday that the central bank would likely keep rate hikes higher than usual until inflation is remedied.
The Fed is “far“from having finished tightening policy, the central bank did not see any “inflation reversal“.
The Federal Reserve is in a tough spot as inflation in America is the highest since the 1980s. On Tuesday, a news agency citing three members of the U.S. central bank said Fed policymakers remain convinced that more rate hikes will be needed to control the country’s rising inflation.
San Francisco Fed President Mary Daly explained in an interview on Linkedin “We are still resolute and completely united” to bring down inflation. Mary Daly emphasized that the Fed was “far“to have completed the implementation of monetary policy measures and that in terms of fighting inflation, the central bank still had “a long way to go.“
She also stated, “People are still struggling to cope with the higher prices they are paying and the rising prices. The number of people who can’t afford this week what they were paying for with ease six months ago just means that our work is far from over.“
Chicago Fed President Charles Evans also shared his opinion on Tuesday. Evans told reporters that the Fed would likely continue to raise interest rates sharply until inflation subsides. While he talked about larger than usual rate hikes, in the range of 75 basis points, Evans also said that a 50 basis point hike was still possible.
Volatility hits stocks, gold and crypto-currencies
At the close on Tuesday, all major stock indices were down, including the Dow Jones Industrial Average, Nasdaq, NYSE and S&P 500. The crypto-currency markets also lost some gains and the market capitalization hovers just above $1.13 trillion. Bitcoin fell below $23,000 per unit and ethereum fell below $1,600 per coin on Tuesday.
Over the course of Tuesday, both major crypto assets managed to climb back above these support areas. Today, the overall crypto economy is up just over 2%. Stocks and the crypto economy have started to show a bit more volatility as tensions rise between China and Taiwan. Gold is also down this month: an ounce of fine gold was trading for $1,810 a piece on July 1, and today gold is trading at. 1,765 per unit.
According to analysts, gold’s recent fall is due to the strength of the U.S. dollar as the U.S. economy is collapsing. Charts show that the greenback remains strong after falling last week. “Gold trimmed gains after Wall Street expressed optimism that tensions between the world’s two largest economies will ease“said Edward Moya, an analyst at OANDA.