FLASH GAGE – Fed Raises Rates

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.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.