The Federal Reserve does not hold its policy meeting until mid-March, so investors will be left to focus on remarks from Fed Chair Jerome Powell and his colleagues. The Fed raised interest rates four times last year, but economic conditions are very different in 2019.
The U.S-China trade war has dampened global growth and rocked the equity markets. With the U.S. unlikely to replicate the sparkling growth we saw in 2018, the Fed is projecting just two rate increases this year. The markets, however, are predicting no rate moves, and some analysts are even talking about the possibility of a rate cut late in 2019.
With the U.S. poised to impose further tariffs on China in early March, traders should be prepared for some movement from gold in February as investors keep a worried eye on developments. Risk appetite slipped late in the week after President Trump that he would not hold a meeting with President Xi prior to the tariff deadline, and this boosted gold prices.
A third round of negotiations starts this week, with Treasury Secretary Mnuchin joining the talks later in the week. Investors are frustrated that there are no signs of progress, leading to concerns that the sides will not be able to reach a deal by March 2./marketpulse.com