COMMENT ON FED STATEMENT (8:00 pm EDT)
As expected, the Fed left interest rates unchanged today (they are currently at 0.25 - 0.5 %). The Fed's statement (released without a subsequent press conference) was carefully worded and did not give investors any hints as to when the next rate hike will occur (some analysts are expecting one in June). Last month's FOMC statement expressed significant concern about current global economic instability, but today the Fed toned down its rhetoric a bit on this issue (perhaps to calm equity markets) and simply said that the global economic situation was being monitored.
All markets fluctuated somewhat around the time of the Fed's statement (released at 2 pm EDT), but most were stable by the end of the day. The DOW and S&P 500 were up a bit, but the NASDAQ closed with a loss. (The NASDAQ has been much more bearish than the DOW and S&P 500 over the last month or so, and this discrepancy may be pointing to an imminent correction.) The U.S. Dollar Index surged briefly around 2pm but then settled back down. It remains above 94. Gold and silver prices also fluctuated but closed the day unchanged.
The Bank of Japan also meets this week and may announce an aggressive loosening of their monetary policy. This could weaken the Yen and give a boost to the U.S. dollar which is now sitting at an important support level (93 -94 in the U.S. Dollar Index). We will watch this carefully as it could be the trigger that pushes precious metal prices back down.
As expected, the Fed left interest rates unchanged today (they are currently at 0.25 - 0.5 %). The Fed's statement (released without a subsequent press conference) was carefully worded and did not give investors any hints as to when the next rate hike will occur (some analysts are expecting one in June). Last month's FOMC statement expressed significant concern about current global economic instability, but today the Fed toned down its rhetoric a bit on this issue (perhaps to calm equity markets) and simply said that the global economic situation was being monitored.
All markets fluctuated somewhat around the time of the Fed's statement (released at 2 pm EDT), but most were stable by the end of the day. The DOW and S&P 500 were up a bit, but the NASDAQ closed with a loss. (The NASDAQ has been much more bearish than the DOW and S&P 500 over the last month or so, and this discrepancy may be pointing to an imminent correction.) The U.S. Dollar Index surged briefly around 2pm but then settled back down. It remains above 94. Gold and silver prices also fluctuated but closed the day unchanged.
The Bank of Japan also meets this week and may announce an aggressive loosening of their monetary policy. This could weaken the Yen and give a boost to the U.S. dollar which is now sitting at an important support level (93 -94 in the U.S. Dollar Index). We will watch this carefully as it could be the trigger that pushes precious metal prices back down.
RSS Feed