Yardeni urges Fed hawkish shift amid inflation, gold price odds fall

Yardeni Research has urged the Federal Reserve to adopt a more hawkish stance, citing strong economic growth and persistent inflation risks. The call comes as the Fed recently maintained its target range at 3.50%–3.75% during its 2026 meetings. Yardeni’s view aligns with the Fed’s June 2026 projections, which forecast solid GDP growth and higher inflation, highlighting concerns over inflationary pressures remaining above the Fed’s 2% target. This proposal by Yardeni reflects broader market sentiment that the Fed may need to tighten monetary policy to address inflation. The suggestion for a hawkish turn by the Fed coincides with significant movements in prediction markets related to gold prices. Markets appear to interpret the potential for increased interest rates as a factor that could strengthen the U.S. dollar, thereby exerting downward pressure on gold prices. As a result, the likelihood of gold reaching high price targets in August has seen fluctuating odds, reflecting the potential impact of a hawkish Fed stance on commodities. Recent activity in gold price prediction markets shows a marked increase in the likelihood of lower gold prices. The probability of gold reaching $4,7...