October 29, 2026
Policy Outlook
Natixis expects the Federal Reserve to deliver one additional interest rate increase in December, then pause as inflation pressures abate. The bank’s assessment is that the combination of declining oil prices, waning tariff impacts and a slowing growth backdrop will help cool price momentum without requiring further tightening thereafter.
The December Federal Open Market Committee meeting is widely viewed as a live event, with officials still focused on bringing inflation sustainably toward target while preserving labor‑market stability. In this framing, a final move would reinforce a restrictive stance, while the underlying forces cited by Natixis—energy disinflation, reduced tariff pass‑through and softer demand—work to moderate headline and core readings over the subsequent months. The emphasis is on incremental progress: allowing already‑tight financial conditions to transmit fully through the economy rather than continuing to raise rates into moderating data.
What Could Ease Inflation From Here
Energy is central to the near‑term inflation profile. Recent declines in oil feed through to retail fuel and freight costs with a lag, affecting both headline indices and certain core‑adjacent categories. If sustained, lower pump and diesel prices can reduce the breadth of monthly gains and temper second‑round effects across goods distribution.
Tariff dynamics are another component. Policy‑driven price increases tend to show up as one‑off level shifts that fade in year‑over‑year comparisons over time. As those earlier adjustments roll off, their mechanical contribution to inflation eases, especially if firms’ pricing power is constrained by moderating demand.
A slower growth pulse complements these effects. As activity cools, capacity pressures typically diminish, helping to contain services prices and limit new price shocks. Together, these factors underpin the view that inflation can step down without an extended sequence of additional hikes once policy is already restrictive.
Market Context For Precious Metals
A single additional rate increase would leave policy settings tight while the Fed evaluates disinflation progress. Historically, higher policy rates and firmer real yields have been a headwind for non‑yielding assets, while a cooling inflation trend can alter real‑rate dynamics and the dollar’s path. For gold and silver, the interplay between policy rates, inflation and the currency remains the key macro channel to monitor rather than any single data point.
In the coming weeks, attention turns to the Dec. meeting communication and incoming inflation prints for confirmation that energy relief, fading tariff effects and softer growth are curbing price pressures. For holders of allocated physical bullion, the trajectory of real yields and the dollar remains a primary macro variable for pricing over time.
