Preston Stanley Asset Management - Fed May Pause Rate Hikes

Although most recent projections indicate that there will be two interest rate hikes by the US Federal Reserve during the course of this year after the Fed increased interest four times last year, former Federal Reserve Chair, Janet Yellen has announced that the Fed may have already reached the end of its rate hiking cycle.

Analysts at Preston Stanley Asset Management say the pause on interest rate hikes would likely be due to global risks threatening US economic stability at this time.

The current Federal Reserve chair, Jerome Powell, had initially announced plans to increase interest rates another four times in 2019 but he reduced that to two in December of last year. As global economic uncertainty rises, the Fed seems willing to exercise caution and patience while it evaluates the state of the US economy in the midst of a trade war with China.

Analysts at Preston Stanley Asset Management say that, although the most recent rate hike which took place in December of 2018 was highly anticipated by market analysts, ongoing trade conflict with China had already become a significant concern.

Preston Stanley Asset Management analysts say the possibility of another rate hike or even two cannot be ruled out but that for now, nothing is set in stone.

Market speculation that the Fed could have reached the end of its rate hiking cycle caused gold prices to hold steady this week. Traditionally gold tends to gain when lower interest rates are expected as the expense of holding non-yielding bullion is lowered.