Federal Reserve Governor Stephen Miran discussed how deregulation is affecting the economy. He believes it will reduce price pressures and may allow for lower interest rates. Miran explained that removing regulations boosts productivity, expands economic capacity, and helps ease inflation. He pointed out that last year’s significant deregulation is set to continue, potentially cutting 30% of regulations by 2030. This change could lower inflation by half a percentage point each year. Miran warned that if monetary policy does not adapt to these deregulation efforts, it might hinder economic growth.

Currency Changes and Market Performance

The US Dollar saw mixed movements against major currencies, gaining strength primarily against the Australian Dollar. A heat map and percentage figures illustrate the notable intra-day fluctuations in the forex market. Federal Reserve signals indicate that last year’s deregulation could help lower inflation. If the Fed does not reduce interest rates, it may lead to overly tight monetary policy, potentially slowing down economic growth. This suggests a more accommodating approach from the central bank in the near future. This expectation is reflected in interest rate derivatives, with Fed Funds futures indicating over a 70% chance of a 25 basis point rate cut by the end of the first quarter. Consequently, the US Dollar is under pressure, having dropped 0.57% against the Japanese Yen today. Traders may favor short-dollar positions against currencies with more aggressive central banks.

Impact on Precious Metals and Equity Indices

A weaker dollar and the possibility of lower real yields are driving a record surge in precious metals. Gold has recently surpassed $4,600, echoing a similar trend from late 2025 when expectations for rate cuts were rising. Continuing bullish activity in gold and silver options is expected, with traders eyeing new highs. For equity indices, the situation is mixed. While lower rates support the market, they also reflect moderating inflation and possibly slower growth. The CBOE Volatility Index (VIX), which spiked over 20 during last year’s tensions, has now stabilized around 18. This indicates that while markets are cautiously optimistic, they remain alert to risks. Derivative traders may seek protective put strategies or collars on major indices like the S&P 500 to guard against sudden changes in market sentiment. Create your live VT Markets account and start trading now.

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