Fed Chair Warsh's Hawkish Comments Lift Dollar, Weigh on Gold
The U.S. dollar surged to a two-week high following hawkish remarks by Federal Reserve Chair Warsh, who emphasized that inflation remains above target and signaled potential further rate hikes. The probability of a Fed rate increase at the September FOMC meeting climbed from 36% to 57%. Gold prices fell as investors shifted toward the dollar amid tighter monetary policy expectations. The dollar's gains were also supported by an upward revision in the University of Michigan consumer sentiment index, though they were partially offset by weaker-than-expected U.S. nonfarm payrolls and a contractionary Chicago PMI reading. Despite these mixed signals, Warsh’s comments reinforced market anticipation for continued Fed tightening. The euro weakened against the dollar amid carryover concerns from geopolitical tensions in Ukraine and despite stronger-than-expected Eurozone economic confidence data.
Topics: dollar index Fed gold prices inflation