šU.S. Deploys Troops to Middle East Twice in a Week; Stocks, Bonds in U.S. and Europe Collapse; Gold and Silver Plunge Again
š„ Gold and Silver Plunge Again; Gold Market Update.The U.S. militaryās troop buildup in the Middle East has sparked market panic, with traders pricing in a 50% chance of a Federal Reserve rate hike before October. Global bond markets have seen indiscriminate selling, and U.S. and European stocks have tumbled sharply.
This marks the second large-scale deployment of U.S. Marines to the region in the past week. Earlier, the Pentagon dispatched the USS Tripoli amphibious assault ship, based in Japan, along with the 31st Marine Expeditionary Unit (31st MEU). Just a day prior, former President Trump stated he had no plans to send U.S. ground troops to Iran.
šTraders now see a 50% probability of a Fed rate hike by the end of October and expect a strong likelihood of another hike in December. This marks a stark reversal from market expectations on February 28, before the outbreak of hostilities with Iran, when two 25-basis-point rate cuts were priced in for the year.
This week, surging energy prices amid the Iran conflict have prompted the Fed and other major central banks to strike a cautious tone. The $31 trillion U.S. Treasury market has seen a broad sell-off, with yields on all maturities rising by at least 10 basis points. The 2-year Treasury yield, the most sensitive to monetary policy shifts, led the advance.