The tightening of financial conditions that have taken place since the FED began raising short–term interest rates in mid-December is a matter of considerable concern to the FED, New York Federal Reserve Bank President William Dudley said in an interview this morning. He also indicated that a weakening of the Global economy accompanied by further appreciation in an already strong dollar could also have “significant consequences” for the U. S. economy.
Almost immediately we saw a selloff in the dollar index and gold and silver rally to the upside. This goes to show you that the market is very sensitive to any comments made by any Fed official.
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