Stocks may have quickly moved on from Kevin Warsh’s rather hawkish first meeting as Federal Reserve Chairman. But other parts of the markets are taking the central bank’s shift more seriously.
The S&P 500 rose 1.1% Thursday after slipping 1.2% Wednesday following Warsh’s first press conference. The tech-heavy Nasdaq Composite had an even easier time shrugging off the Fed meeting—jumping 1.9% in the previous session after a 1.3% dip.
The central bank’s economic projections revealed that nine of the 18 policymakers now expect higher interest rates this year—the Fed no longer sees a cut. But President Donald Trump signing an agreement with Iran to end the war and reopen the Strait of Hormuz helped stocks to rebound.
Bitcoin and other cryptocurrencies failed to bounce back, though—despite often moving in tandem with tech stocks. Bitcoin was trading at $62,369 early Friday, down 2.6% over the past 24 hours, according to CoinDesk data. It was trading above $67,000 on Monday.
Higher interest rates tend to hurt cryptocurrencies, making them relatively less attractive than yield-bearing investments.
Gold prices have also been hit, with futures down 1.8% to $4,172.60 an ounce. Again, gold is a nonyielding asset, while the stronger dollar is also having an impact on the precious metal’s price. It was trading above $4,350 earlier in the week.
Goldman Sachs analysts cut their forecast for gold prices Thursday on the assumption of no rate cuts this year. They now expect gold to rise to $4,900 by the end of the year, down from a previous forecast of $5,400.
“If hikes do materialize, demand for gold as a macro policy hedge could unwind more persistently as market concerns about DM central bank independence ease further,” analyst Lina Thomas wrote. She added Goldman’s economists’ base case is for no rate hikes this year.
The U.S. dollar has also performed strongly since the Fed meeting, as it typically does when hikes are on the table. The ICE U.S. Dollar Index, which measures the greenback against a basket of global currencies, settled at its highest level in more than a year Thursday.
Write to Callum Keown at callum.keown@dowjones.com