Global gold prices recovered from the heavy losses recorded during Wednesday's trading session following comments from US President Donald Trump, in which he hinted at his choice for the next Federal Reserve chairman.
Trump said the next Federal Reserve chair would be announced in early 2026, but he hinted at a possible successor, mentioning Kevin Hassett by name and saying there were potential candidates, such as the esteemed Kevin Hassett present. Markets believe Trump's nomination of Hassett could push interest rates below 3%.
If appointed, Hassett is likely to push for interest rates to be cut well below 3% in line with Trump’s stated preferences, although Bank of America analysts note that his ability to implement deep cuts will depend on economic data and the composition of the Federal Open Market Committee.
In other recent news, ING Bank expects the Federal Reserve to cut interest rates at its next meeting, with a further cut anticipated in December. This forecast is based on the lower-than-expected impact of tariffs and stable customs revenue data. Meanwhile, Wells Fargo also anticipates a 25-basis-point cut at the Federal Open Market Committee meeting on October 29, in line with Chairman Powell's previous statements about a gradual shift toward a neutral policy. In contrast, Morgan Stanley revised its forecast, no longer expecting a December rate cut due to stronger-than-expected employment data, which showed a significant rebound in payrolls. Roth highlights a 69% probability of a 25-basis-point rate cut in December, though she questions whether this probability will translate into a significant rally in stock market indices.
