Dollar Finds Support from Higher T-Note Yields

Core Viewpoint - The Federal Reserve officials express a preference for maintaining a restrictive monetary policy stance to combat persistent inflation, with some dissenting against recent interest rate cuts due to ongoing economic momentum and inflation concerns [1][2][4][10]. Group 1: Federal Reserve Officials' Stance - Cleveland Fed President Beth Hammack advocates for a slightly more restrictive stance to exert pressure on inflation [1]. - Kansas City Fed President Jeff Schmid dissents against the FOMC's decision to cut interest rates, preferring a modestly restrictive policy due to high inflation and economic momentum [1][4]. - Chicago Fed President Austan Goolsbee also voted against the rate cut, emphasizing the need for more information before making such decisions given the prolonged inflation above target [2][4]. Group 2: Market Reactions and Economic Indicators - The dollar index rose by 0.02% on Friday, supported by hawkish comments from Fed officials and increased T-note yields [4]. - The markets are currently pricing a 24% chance of a 25 basis point cut in the fed funds target range at the upcoming FOMC meeting [5]. - The euro gained 0.06% against the dollar, influenced by divergent central bank policies, with expectations that the Fed will continue cutting rates while the ECB has concluded its rate-cutting campaign [6]. Group 3: Precious Metals Market - Gold prices reached a 7-week high, while silver experienced mixed results, influenced by a stronger dollar and higher T-note yields [9][10]. - Central bank demand for gold remains strong, with China's PBOC increasing its reserves by 30,000 ounces to 74.1 million troy ounces in November, marking the thirteenth consecutive month of increases [12]. - Concerns over tight Chinese silver inventories have emerged, with stocks in Shanghai Futures Exchange warehouses falling to the lowest level in 10 years [13].