Wall Street investors are expressing growing concern that a prolonged cycle of interest rate hikes by the Federal Reserve could jeopardize the current market rally. Market participants are particularly worried about the potential negative impact on the S&P 500 and other risk-sensitive assets.
According to the CME FedWatch tool, there is currently a 50-60% probability of a quarter-point rate increase during the upcoming September meeting. Analysts suggest that if borrowing costs continue to rise, the momentum of the current market growth may face significant pressure.
The anticipation of a sustained tightening cycle is also affecting gold price forecasts. Investors expect a stronger dollar, which typically exerts downward pressure on gold, reducing its appeal as a hedge against market volatility.
Current market pricing indicates that the probability of gold reaching $15 000 by the end of December is low, estimated at approximately 0.7%. Future market dynamics will largely depend on the Federal Reserve's decisions, upcoming inflation data, and geopolitical developments.
