Important statement from the US Federal Reserve By Investing.com

Investing.com – The U.S. Federal Reserve said on Friday that a shortage of equipment and employment challenges were holding back the progress of the newly restored U.S. economy in the face of the coronavirus.

The Fed attributes the high inflation “in stages” which is currently strong to these difficulties, adding: “The progress of the vaccination campaigns has facilitated the reopening of the economy and fostered strong economic growth”.

This is what the Fed said in its semi-annual report to the US Congress on the state of the economy. The Fed says employment difficulties and supply chain bottlenecks are hitting a number of industries.

Congress will discuss this report next week.

These type of statements help to support the price of gold, as the Fed recognizes the strength of inflation, but at the same time it has not reached the level required to achieve full employment, as the unemployment rate remains at high levels, and the market still needs support.

This was released in June a few days ago, and the most important thing that came out of it was participants’ lack of confidence in the economy reaching a state of economic recovery afterwards, as many participants mentioned their expectation that the Fed will begin to reduce the pace of purchases ahead of schedule, in light of recent data.

It seems that the recovery of the labor market is the ultimate criterion for the Fed. Fed Chairman Powell, in previous speeches, expects the labor market to pick up as soon as supply problems disappear. However, no positive results arrived yesterday, which increases the pressure on the Fed.

Watch for market movements now

It is currently registering $ 1,809.15, an increase of nearly 0.5%, compared to 74.67 at those times, an increase of 1.72%.

As for currencies, it increased, with the pound sterling registering 8.6578, down 0.37%, while it fell to 92.252, down 0.17%.