• Silver price consolidates around $27.60 as traders reprice Fed rate cut hopes.
• Sticky US inflation will feed expectations for Fed delaying rate cuts.
• Investors see the Fed keeping interest rates steady next week.

Silver price (XAG/USD) remains stuck in a tight range around $27.60 in Friday’s American session. Traders reassess expectations for the Federal Reserve (Fed) rate cuts as the United States core Personal Consumption Expenditure Price Index (PCE) for March remain higher than the consensus.

The annual underlying inflation data rose by 2.7% from the estimates of 2.6% but decelerated from the prior reading of 2.8%. On a month-on-month basis, price pressures grew in line with expectations and the prior reading of 0.3%. Price pressures remaining higher fuel expectations for Federal Reserve (Fed) maintaining a hawkish monetary policy framework.

The scenario is favorable for the US Dollar and bond yields but weighs on non-yielding assets, such as Silver. The US Dollar Index (DXY) rebounds from 105.40 amid expectations that the Fed will keep interest rates higher for a longer period. The Fed sees rate cuts appropriate only when they get evidence that inflation will return to the desired rate of 2%. 10-year US Treasury yields are down 1.15% to 4.65%.

Meanwhile, investors shift focus to the Fed’s interest rate decision, which will be announced on May 1. The Fed is anticipated to keep interest rates unchanged in the range of 5.25%-5.50%. Though the Fed is expected to maintain the status quo, investors will focus on guidance on interest rates.