Citigroup predicts gold at $3,000/oz; JP Morgan forecasts $2,500. UBS warns of 6.5% Fed rate hike.

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Citigroup and JP Morgan forecast significant gains for gold, with projections reaching $3,000 and $2,500 per ounce respectively within the next year. Meanwhile, UBS warns of a potential 6.5% Fed rate hike amid persistent inflation, triggering concerns of a selloff in both bond and stock markets. As cocoa prices hit record highs, surpassing $10,500 per metric ton, and longer-term inflation expectations rise, investors grapple with the impact of escalating prices on various sectors of the economy.


UBS Warns of Potential 6.5% Fed Rate Hike Amid Enduring Inflation

UBS Group AG strategists suggest there is a growing risk that the Federal Reserve may increase interest rates to as high as 6.5% next year, due to persistent strong U.S. economic growth and sticky inflation. Initially predicting two rate cuts this year, UBS now considers a scenario where inflation does not meet the Fed’s target, potentially leading to resumed rate hikes. This shift could trigger a significant selloff in both the bond and stock markets. Recent U.S. data indicating economic resilience has led markets to adjust expectations, reducing bets on policy easing and preparing for the possibility of increased rates if inflation remains above 2.5%.

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