Gold News

Markets reel with rate cut in doubt

Trading off the perceived likelihood of federal rate cuts has buoyed US stocks for days, but markets were today reeling as speculation started to suggest that an interest rate slash may not be on the cards after all.

Procter and Gamble (P&G) added to the sense of uncertainty with its own sobering analysis – with the group forecasting a downturn in profits as rising goods prices reduced demand in the current quarter.

Nor was P&G the only voice questioning consumer confidence, with the Conference Board reporting a fall in consumer outlook to a new two-year low – a buyer pessimism fuelled by unemployment concerns.

Consumer goods specialist P&G led the downturn of stocks, slipping 4.1 per cent, while 18 out of 30 Dow Jones Industrial Average components were lower, bringing the overall index more than 50 points down.

Action Economics told Reuters: "US equities have retreated overnight in the wake of the [Wall Street Journal article on the Fed] citing the reluctance of the Fed to cut and the decision being between a quarter-point move, or none at all."

Markets have been hoping for another rate cut in order to bring more liquidity to the US economy, but those who have made the decision to buy gold may be the biggest beneficiaries, reaping the rewards of anti-inflationary hedging.


See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals