What a Fed rate cut could mean for the world
“As such an important driver of global growth, this is bound to have an effect on asset prices around the world,” Richard Carter, head of fixed interest research at Quilter Cheviot, said of a rate cut by the Fed.
That includes gold – which hit a record high this week on expectations of a move by the Fed. Higher rates are generally viewed to be a drag on gold since they make fixed-income investments, such as bonds, more attractive, although historically this has not always been the case. Gold is also used as a hedge against inflation (which can be pushed higher as rates go lower) and investors also buy the commodity in times of market stress.