The Federal Reserve has signaled a shift to a stance of "calculated patience," with Vice Chair Philip Jefferson and Atlanta Fed President Raphael Bostic indicating current monetary policy is well-positioned. The central bank aims for a "soft landing," targeting 2% inflation and expecting economic growth around 2.2% in 2026 as tariff-induced price pressures moderate.
A significant structural shift is being driven by an AI capital expenditure boom, with tech giants projected to spend $660 billion on data centers and infrastructure in 2026. This surge in demand is fueling a rally in precious and industrial metals, with silver leading a sharp rebound as both a safe-haven asset and a beneficiary of the "AI multiplier" effect.
Globally, economic fortunes are diverging. Germany's manufacturing sector is projected for its first meaningful production increase since 2021, fueled by aggressive fiscal stimulus. In contrast, Japan faces a weakening Yen as it heads into critical elections, with market fears over fiscal discipline pushing the USD/JPY pair toward 160.
The article also outlines key upcoming economic events that will shape market sentiment, including Japanese elections, speeches from the BoE's Andrew Bailey and ECB's Christine Lagarde, and critical U.S. data releases like Nonfarm Payrolls and CPI. The U.S. CPI report is highlighted as the most influential data point, with core inflation around 2.6%.
