EDF, HASSETT AND THE IMPACT OF A POSSIBLE IN US MONETARY POLICY

[Igor Pereira]

The statements of Kevin Hassett, coupled with the projections of large global banks on the Federal Reserve decision, created one of the most important contexts of recent weeks for interest, dollar, Treasures and gold (XAU/USD).

Exclusive Analysis by Igor Pereira – Financial Market Analyst and Junior Member WallStreet NYSE

For the professional trader, this is a time when Fed policy, macroeconomics and liquidity expectations converge — and the result can redefine market behavior by the end of 2025.

In this exclusive matter of ExpertFX School, the analyst Igor Pereira explains, in depth, what is happening and how this can affect the institutional flow, the interest curve and the behavior of gold.

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1. What Hassett Said – And Why the Market Reacted

Hassett, the central figure of the economic team linked to Donald Trump, gave a series of statements that reinforced expectations of:

• Deeper cuts than expected;

• Aggressive pricing policy, with projection of up to $400 billion in tariff revenue this year;

• Imports from China returning to pre-WTO level — something structurally significant;

• Real wage growth comparable to the 1990s;

• View that there is “a lot of room for the Fed to cut”;

• Possibility of cuts above 25 bps;

• Strong relationship with Powell and full alignment with President Trump;

• GDP growth above 3%, possibly more than 4%;

• AI as a productivity engine greater than the computer revolution.

Second Igor Pereira:

“ Hassett's statements reinforce the environment of fiscal expansion and aggressive commercial policy. Added to the pro-cut speech, an explosive set of expectations is created that presses the dollar and the interest curve at the same time.”

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2. What Great Banks Expect For the EDF

The following is the consensus — and differences — among the largest institutions:

Morgan Stanley.

• Cut. in December, January and April, bringing interest to 3,00%–3,25%.

• Signs end of cuts by “risk management”.

• Multiple dissent at the meeting.

• Dots practically stable.

JPMorgan

• Wait a minute. hawkish cut: cut with hard speech.

Bank of America

Combines cut with liquidity enhancement:

• Rate 3.50%–3.75%.

• 45B/month purchases in Treasure Bills for booking management.

• With reinvestment of MBS, total can reach ~$60B/month.

According to Igor Pereira's analysis:

“ These purchases are not officially QE, but the market treats as liquidity support. This reduces stress in the banking system, soothes the Treasury market and directly influences the behavior of gold and the dollar.”

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3. Direct Impacts on the Financial Market

3.1. US Interest Curve

• Real chance of deeper cuts than 25 bps.

• Stronger GDP creates a conflict between hot data and dovish posture.

• Internal dissent can increase volatility.

Expected result:
Curve inclination shall oscillate strongly before and after the communication.

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3.2. Dollar (DXY)

• Low pressure from aggressive cuts.

• High pressure from tariff tensions and strong growth.

• Result: extreme volatility.

“It’s a moment of dollar bitability: any Powell phrase can turn the flow in seconds.” — Igor Pereira

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3.3. Treasures

• Fed purchases of T-bills reduce funding spreads.

• Decreased liquidity premium.

• Indirect support to long yelds.

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3.4. Gold (XAU/USD)

Among all assets, gold is the most sensitive to the combination:

• aggressive cuts,

• unstable dollar,

• additional liquidity,

• political uncertainty and tariff.

According to Igor Pereira:

“If the Fed confirms cut + liquidity reinforcement, the gold should react immediately. The market is already pricing this risk, and any confirmation can trigger institutional purchases and cause important disruptions.”

Probable scenario for XAU/USD:
High sustained trend if Powell's speech softens the real curve.

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3.5. Actions and S&P 500

• AI as a productivity booster reinforces the secular theme.

• Cuts favor valuations.

• Dissent in the Committee can generate momentary stress.

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4. Geopolitical Connection: China, Rates and GDP

The claim that Chinese imports returned to pre-WTO levels It's symbolic.
This represents:

• desac accelerated economic coupling;

• reconfiguration of global chains;

• structural inflationary pressure;

• strengthening American domestic sectors.

The market reads this movement as:

• more unpredictable dollar,

• gold most valued as hedge,

• interest curve harder to price in the long term.

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5. What to Expect in the Next Days

The ExpertFX School team anticipates:

• Violent movement minutes before the Fed's announcement.

• A dollar sensitive to nuances from Powell's speech.

• Gold with strong high asymmetry.

• Interest curve with probability of immediate recalibration.

• Treasures reacting directly to the announcement or not of T-bills purchases.

“Variality will be the engine of the market. Whoever reads the institutional flow and the real curve accurately will have enormous advantage over retail.” — Igor Pereira