Here are the highlights from today’s meeting:
- Fed fund rates increase by 25 basis points to 1.50 -1.75 percent.
- The Fed expects further gradual increases ahead.
- It added a new line into the statement saying the economic outlook
has strengthened recently. The Fed outlook for 2019 to 2.875 percent and raising from two hikes to three and an expected 3.4 percent rate in 2020.
The price of Gold initially sold off on the news, but when the dollar turned significantly lower a few minutes after the news was released, the price of Gold rebounded and made new highs on the day.
The two economists I spoke with right after the news indicated that this
is a very aggressive stance taken by the Fed and they question if the upcoming economic data will support such aggressive rate hikes.
I’m in their camp. As always, the Fed must be able to back up their statements with the data. If you look back at their comments over the last three years, they have been all talk no action, raising rates when the market screams and forces their hand.
Enjoy the rest of your day.
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