$XAU Three investment banks today presented their forecasts for the Federal Reserve's interest rate and President Powell's remarks. The forecasts showed strong divergence amid concerns over rising oil prices and their implications for inflation rates.
Data released today indicated that the Personal Consumption Expenditures (PCE) index - the Federal Reserve's preferred measure - showed an increase in the inflation reading compared to last month, with annual inflation recorded at 3.1% while it was 3%.
The continued rise in inflation warns of keeping the Federal Reserve's interest rate stable for at least a longer period.
The American president, Donald Trump, called on the American Federal Reserve to lower the interest rate to address the rising prices of energy materials.
However, the transformations of investment banks today are as follows:
Barclays expects the Federal Reserve to cut the interest rate only once in September 2026, having previously expected two cuts in June and September.
Goldman Sachs expects the Federal Reserve to keep the interest rate stable during next week's meeting, and the bank expects only two cuts this year.
As for Bank of America, it believes that President Powell will ring the alarm bells of stagflation in his speech.
JP Morgan, BNP Paribas, HSBC, Standard Chartered, Deutsche Bank: they expect either no cuts or very limited cuts, and JP Morgan even expects an increase in the interest rate in 2027!