As anticipated, the Fed raised rates today by 25 basis points. There was only one vote to stay put cast by Minneapolis Fed President Neel Kashkari who at the last meeting called for a reduction in the Fed’s balance sheet before the next rate hike.
At this meeting, the FED did announce they will start to shrink their balance sheet later this year.
Gold initially traded higher on the news as the dollar weakened, but it only took a minute or two before the dollar gained some ground and gold gave back at least two thirds of the gains that it enjoyed earlier in the day.
The Fed did indicate they plan for another rate hike later in the year, but many question that with Washington in disarray and the clock running out before the House’s next recess, a tax reform plan to stimulate the economy is a longshot at this point.
As I submit this comment the Chairwomen is sharing her prepared comment which we will share with you in the next release of the Market Gage.
Enjoy the rest of your day.
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