Tag Archive: fed funds rate

Fresh QE Has Arrived

The gold market rose to the highs of the day yesterday as markets reacted to commentary from Fed Chief Jerome Powell. Mr. Powell, at the annual NABE conference in Denver, said that the central bank will start expanding its balance sheet soon. He went on to state that the central bank also remains open to further rate cuts, citing risks to the global economy. Of note is the suggestion by Powell that this is in no way QE. He was quoted as saying “This is... Continue Reading

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Rates Will Be Back to Zero in No Time

The past trading week has been an interesting one. The highly anticipated FOMC meeting has now come and gone, with the central bank cutting the Fed Funds rate by 25-basis points as expected. The Fed did not, however, seem to provide the type of dovish message that the stock bulls were looking for. Stocks sold-off hard following the Fed’s decision. On Thursday, stocks were set to stage a significant rebound and looked poised to retake all the declines from the previous day. That was until... Continue Reading

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All Eyes on the Fed

This week features the release of the latest FOMC meeting minutes as well as testimony before Congress by Fed Chief Jerome Powell. The minutes will be released on Wednesday, while Powell’s remarks will begin Wednesday and conclude Thursday. The latest meeting minutes will likely take a back seat to Powell’s comments, and investors are hoping that the Fed Chief will provide some clarity about the central bank’s plans regarding rates going forward. Expectations for an interest rate cut have been dialed back in recent days... Continue Reading

Wait, What?

The highly anticipated Fed policy meeting has now come and gone, with Fed Chief Jerome Powell set to deliver his press conference. The central bank voted by a margin of 9-1 to hold the Fed Funds rate steady. The central bank did, however, still hint at the potential for rate cuts should conditions warrant such a move. The FOMC removed the word “patient” from its outlook, in a move that could signal a large degree of flexibility by the central bank. Some analysts have suggested... Continue Reading

Fed Hikes Rates by a Quarter-Point

The highly anticipated Fed meeting on monetary policy has concluded with the central bank electing to hike rates by 25 basis points. The quarter-point hike was not unsuspected and investors will likely be far more concerned with the central bank’s commentary about its plans for next year. The Fed voted unanimously to hike rates today, while it lowered rate hike expectations for next year down to two from three. The Fed also lowered its longer-term estimate of the Fed Funds rate to 2.8% from 3%... Continue Reading

Don’t Fight the Fed, but Don’t Ignore It Either

There is an old saying that says “Don’t fight the Fed.” This saying is typically directed at stock market bears that remain bearish equities even as the central bank lowers rates or maintains ultra-low levels of rates that encourage risk taking. The phrase happens to make a great deal of sense, as the Fed is essentially the most powerful financial institution that there is. The Fed has the power to control the money supply, and to “create” new money out of thin air. If the... Continue Reading

Has the Dollar Gotten Ahead of Itself?

The latest meeting of the FOMC has now come and gone. As expected, the Fed continued on its recent course of policy normalization, hiking the Fed Funds rate by another 25 basis points. The central bank still expects to hike rates again before the end of the year, likely in December. There were some key changes in the policy statement, with the central bank electing to drop the term “accommodative” from its statement. Rate expectations going forward also changed as well, and it seems overall... Continue Reading

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Is This Week all About the Fed?

There is certainly no shortage of things happening right now that could potentially affect financial asset prices. One of the major potential catalysts for price action this week is likely to be Wednesday’s Fed meeting. It is widely expected that the central bank will take another step towards normalizing monetary policy. The central bank will likely raise the Fed Funds Rate by another 25 basis points. Markets seem prepared for such a move from the Fed, and will probably be far more interested in what... Continue Reading

Do They Have It All Wrong?

There seems to be a large consensus that the potential for further rate hikes from the Fed in the second quarter and beyond could derail the rally seen in gold in recent months. A more aggressive central bank, a stronger dollar index and robust appetite for risk are all reasons given for what could be the yellow metal’s “demise.” Thus far, however, none of these issues or potential issues has been able to put a halt to the buying in gold. In fact, the gold... Continue Reading

Does a June Rate Hike Really Matter?

Since the beginning of 2016, a debate has been ongoing about the pace and timing of additional rate hikes by the Federal Reserve. The Fed raised rates for the first time in almost a decade back in December, and it was thought that the central bank would embark on a series of further hikes in 2016. Things haven’t quite worked out that way… The Fed has not raised rates again through the first five months of 2016 and has cited numerous reasons for waiting. China’s weakness, a... Continue Reading