Welcome to Extreme Investor Network, where we provide you with the latest insights and analysis on the Stock Market, trading, and Wall Street. Today, we will be discussing the impact of inflation data on silver prices, interest rate expectations, treasury yields, the movement of the U.S. Dollar, and key economic indicators.
Inflation Data Impacts:
The recent Personal Consumption Expenditures (PCE) Index report showed no increase from April to May, indicating a gradual pullback in inflation. This data has supported silver prices, with David Meger of High Ridge Futures noting a slow decrease in inflation. The 0.1% gain in May and 2.6% year-over-year increase marked the lowest annual rate since March 2021, boosting investor confidence in the Fed’s ability to manage inflation without aggressive rate hikes.
Interest Rate Expectations:
Market sentiment has shifted towards rate cut expectations, with traders now pricing in a 68% chance of a Fed rate cut in September. This shift has been a key driver for silver’s recent performance. San Francisco Fed President Mary Daly sees the latest inflation figures as a positive sign that policy is working, while Fed Governor Michelle Bowman remains open to further rate increases, highlighting the ongoing debate within the central bank.
Treasury Yields and Dollar Movement:
The 10-year U.S. Treasury yield closed up 2.02% last week after a three-week decline, while the U.S. Dollar Index finished 0.02% higher, marking its fourth consecutive weekly gain. These factors have exerted pressure on silver prices, partially offsetting the positive impact of rate cut expectations.
Economic Indicators:
Additional economic reports provided mixed signals, with the Chicago PMI rising to 47.4 from 35 in May and the University of Michigan consumer sentiment surpassing expectations with a reading of 68.2 for June. These indicators will play a crucial role in shaping silver’s near-term direction.
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