The Fed raised interest rates by another three-quarter point increase on Wednesday. The federal funds rate now stands at 4% after the central bankers’ sixth consecutive increase. It hasn’t been that high since 2008.
Instead, Powell rejected the belief that the FOMC would pause or change course at its subsequent meeting.
Powell acknowledged that the Fed has thus far failed to control inflation and said. That more tightening beyond what was initially anticipated is imminent.
Jordan Powell: “To get inflation back to our target of 2%, my coworkers and I are steadfastly devot. Inflation would become entrenched if we are unable to manage it because we have not tightened monetary policy enough.
The price of gold increased 1.6% this week to trade as $1,678 per ounce. Silver has shown some strength and is still far from its year-end lows, gold has recently spent a significant amount of time trading at the bottom of its trend.
As of this Friday’s report, the
white metal has posted a weekly
gain of an impressive 6.4%, or more than $1.50, bringing current prices to $20.75 an ounce, largely as a result of today’s advance.
As for the PGMs, both are underwhelming. Since last Friday’s closing, platinum has lost just 0.4%, trading at $956. Last but not least,
is forecast to fall by 3.7% this week and settle about $1,900 per ounce.
The outcome of the elections the following week may also alter market dynamics. Republicans have high hopes for a red flood that would win them the majority in the House & Senate.
Masters would take over the Senate seat that John McCain
had held for more than three decades. The sound economic movement has never counted Senator McCain as a significant ally. And to be honest, hardly many senators in recent memory have been.
Leaders in Washington, D.C. are still trying to come to grips with the implications of the apparent end of the low interest rate period. By increasing the costs associated with borrowing fresh money into existence. The Federal Reserve hopes to discourage people from doing so.
The eventual outcome could be that the government borrows more money overall. Not less, in order to cover increased debt servicing expenses. And as a result, the already terrible inflation problem could get considerably worse.