Welcome to illuminati silver, we tell you
the truth about silver. Today is Thursday 17th March 2016 and we are
briefly covering the ramifications of the FED not raising interest rates yesterday.
After a 2 day meeting the Federal Reserve held interest rates steady on Wednesday and
cut the expected pace of future monetary policy tightening as a weak global economy caused
some concerns. The bank said that a moderate economic expansion
and “strong job gains” would make it appropriate to hike rates over the year. It appears that
policy makers are now comfortable with two quarter-point rate rises by the end of 2016.
Janet Yellen the FED Chair stated: “I am wary and have not yet concluded that we have
seen a significant uptick that will be lasting,” ……..The U.S. economy has been very resilient
in the face of shocks … That is important………proceeding cautiously will allow us to verify” that
the economic recovery remains on track.” Once again concerns over Japan, Europe, and
the ongoing slowdown in China dominated their discussions.
Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York felt that the
tone was ‘more dovish’ than the markets expected.
The dollar fell sharply against a basket of currencies after the statement. Yields on
U.S. Treasuries dropped across the board, while stock markets rallied. The S&P 500 closed
at its highest level since Dec. 31st. In terms of statistical data, policymakers
projected weaker economic growth and lower inflation this year and lowered their estimate
of where the targeted lending rate would be in the long run to 3.30% from 3.50%. Unemployment
is expected to fall to 4.7% by the end of 2016 and again further in 2017 and 2018. Forecasts
for inflation were also marked down for this year to 1.2% from 1.6%, but see it recovering
to close to the central bank’s 2% medium-term target next year.
Gold moved up rapidly on the news from around the $1229 level to $1260 and is currently
standing at $1265 an oz, and silver also jumped from the $15.22 level to $15.60 and is currently
standing at $15.66. The dollar index fell from around the 95.70 level and is currently
standing at 95.10. So we can see that as we stated in January,
the FED is unlikely to raise rates 4 times this year and have downplayed their predictions
to twice. Whilst some are saying they won’t raise rates at all, there is still the possibility
of perhaps one quarter point raise later in the year, in our view. Meanwhile we are watching
others countries to see their response to this, and are looking out for any further
increases in negative interest rates. The FED is playing quite a clever game. They are
achieving slight dips in the value of the dollar to help exports and the stock market,
not by reducing rates but by building up expectations of higher rates and then dashing them.
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worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of