It’s Finally Official: The Fed Has Hiked Interest Rates 25 BPS For the 3rd Time in 15 Months.
Gold and Silver Jumped On the News…

 

Silver reacts to the news:

Gold prices burst back over $1200:

 

Full FOMC Statement:

Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving close to the Committee’s 2 percent longer-run objective; excluding energy and food prices, inflation was little changed and continued to run somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal.

The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action was Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.

 

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    • Silver reacts to the news?
      Here’s the question I want answered:
      Will the Price of Ethereum actually be twice the silver spot price?
      Ethereum today busted through  $33, to hit $33.45.

      So,  does the price action in Ethereum almost prove that Silver is manipulated—that Silver is in FACT the most undervalued asset in human History as Greg Mannarino often says??

      Can someone….. anyone…. out of all the guru’s that get posted on Silver Doctors & geniuses that commitment  here or even some of the trolls that frequently crap here….

      SOMEBODY PLEASE tell me how is it that one Ethereum is -valued- at close to twice the Silver spot price if/since Phyzz Silver is, “Stored Economic Value’ while Ethereum is……um..…what….exactly making it worth twice as much as 1 of the ASE that the Doc would gladly help ya get???

    • “SOMEBODY PLEASE tell me how is it that one Ethereum is -valued- at close to twice the Silver spot price if/since Phyzz Silver is, “Stored Economic Value’ while Ethereum is……um..…what….exactly making it worth twice as much as 1 of the ASE that the Doc would gladly help ya get???”  

       

      Not really sure, but I think it has something to do with the ‘BIGGER FOOL THEORY’. Lol. _JLG. 

    • @ NotAnOwner

      What if I told you that it’d take TWO American Silver Eagles to get one effin’ Ethereum…what ever the Heck Ethereium is?

       

      One Ethereum  = $37.12 USD

       

    • Opp sorry, in my attempt to edit and be accurate…look at that….. Ethereum is now at $39.04 USD.

       

      Moving sorta like we’ve been told silver would……

    • @4 oz

       

      “SOMEBODY PLEASE tell me how is it that one Ethereum is -valued- at close to twice the Silver spot price…”

      Let me offer this as some possible explanations:

      “In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule”.  –  Friedrich Nietzsche

      Another possibility is “mass hysteria” or “group-think” applied to a trendy mania.  Think tulip bulbs in Holland ca. 1640.

      Another thought that occurs to me is that this is yet another example of people reacting ever more bizarrely to an increasingly insane world.  Perhaps small doses of colloidal silver would be an effective treatment for this condition?

       

    • @ Ed_B

      Thank you sir for your insights; Woke this morning to Ethereum having moved through $42….apparently worth 2 1/2 ounces of Silver….my point, my thought, my question is really……just what is the true value of an ounce of silver….

  1. The banks would need to burn through all of their $2T worth of “excess reserves” (which the Fed pays the the banks .75% to stay on deposit there) before the big banks would need a SINGLE DOLLAR OF YOUR DEPOSITS TO LOAN OUT.

    They don’t need your deposits any more.  Period.  Therefore, deposit savings rates will be ZERO for the rest of our lives.

    • There is proof of this in that depositors are now defined as “unsecured creditors”.  Unless I am reading this wrong, they are saying that our deposits have NO VALUE.  If they did, the “money” we deposit would be our security.  Once we understand this, the decision to exit the banking system to the greatest extent that we can becomes a lot easier.  The difference between a substantial nest-egg and destitution could be a single banking system screw-up.  Given the history of banking, does anyone really want to bet their financial future on these people not screwing up… again?

       

       

  2. Should this turn up continue, Longer term head shoulder top negated and the inverted H/S, I mentioned a few weeks ago is in play with gold.  If right shoulder forms here that has potential to take us to the 1350 range.  Need some follow through.

  3. Historically, a Fed Rate hike caused the dollar to strengthen and gold/silver to plunge. Nowadays the economy is so managed nothing is responding the way it should. Today’s surge in gold/silver and plunge in dollar are 180′ opposite of what should have happened. It could mean the system is reaching the breaking point.

    • Agreed @UglyDog

       

      Remember when they used to tell us on the financial news programs that oil prices moved inversely with stocks because falling oil prices were like a tax cut for citizens and businesses because their energy costs were decreased and also how the opposite was like a tax hike?  Well, they sure changed their tune on that, so now stocks and oil are moving in the same direction, even though the opposite really did make sense.  This does not.  Yet, it is what is spewed at us day in, day out these days.  The fact that it makes no sense yet is occurring anyway is glossed over and never explained.

      Is it possible that the real game here is the suppression of gold and silver prices so that fiat prices remain much higher than they deserve to be and that everything else is merely adjustable window dressing that is modified as needed?

       

    • Great Depression number 2 is being slowly worked towards, but ‘they’ can’t cause it in too much of a hurry or the sheople will realise who is causing it and there could be consequences.  _JOHNLGALT. 

    • Such dollar strength might not cause a contraction.  If done adroitly, it might merely reduce the rate of economic growth somewhat, avoiding over-heating the economy.  But “adroitly” is the sticking point here.  We haven’t seen a lot of evidence that this is at all the case insofar as the Fed or the US Gov are concerned.

       

  4. Trying to establish some “Measure” of credibility after telling so many lies about everything under the sun.  I’m not listening to that ugly marm, she is pathologically the biggest liar on the planet.

    A smash down in PM is hours away I would bet.

    The system chiefs need an exorcism!

    • @Falco

       

      “A smash down in PM is hours away I would bet.”

      Actually, you CAN bet on that via buying some short-term puts on the SLV.  🙂

      That would be some risky business, though, and not for the faint of heart or the thin of wallet!  😉

       

  5. Gold rose from $35 to $197.50 between 1970 and the end of 1974, that’s moar than four times. During that period, the Bank of England’s base rate rose from 5% to 13%. The Fed’s discount rate was 4.5% in 1972 and rose to 8% in August 1974. So, a rising gold price was accompanied by a rising interest rate, contradicting the conventional wisdom of today. Gold went on to hit $850 on 21 January 1980, when the Fed’s discount rate was at 12%.
    The current belief that rising interest rates are bad for gold was disproved by those events. The reason gold rose had little to do with interest rates, and everything to do with accelerating price inflation. The only way a rising gold price could be halted was to raise interest rates high enough and sharply enough to collapse economic activity, which is what Paul Volcker did in 1980-81. In other words, until the Fed abandons all pretensions to supporting economic growth, people will continue to increase their preferences for owning goods over holding dollars, thereby continuously reducing its purchasing power. Banks will be flush with currency as the Fed unwinds the balance sheet. About $4 trillion at the FED but leveraged 10 times in the banks hands.
    “The Federal Reserve is likely to start shrinking its massive balance sheet this year, Philadelphia Fed President Patrick Harker says”. They are doing it real EZ, so there will be no flare up of the inflation genie. Haha. Everyting is awesome, til it’s not.

    Another way of looking at the prospective gold price is to think of it in terms of raw material prices, which in the long run tend to be more stable when measured in gold, than when measured in fiat currencies. Given the outlook for commodity prices, as both China and America compete for raw materials and expand the quantity of money to pay for them, the gold price is more likely to maintain a level of purchasing power against rising commodity prices, instead of it declining with paper currencies. China has prepared herself for this event, having embarked on a longstanding policy of stockpiling gold since 1983.

    Over the last fourteen years, private individuals and businesses in China have accumulated at least another 10,000 tonnes, and China has become the largest producer and refiner of gold by far. China has prepared herself and her citizens well in advance for the collapse in purchasing power of currencies that their demand for commodities is likely to create. The only thing they must continue is to get rid of US Treasuries before they become worthless.

    Welcome to PMs, don’t get shaken off the bull. They try their best to knock the weak hands off.

    • Be very careful in ascribing too much to the comparison of today’s economy with that of 40+ years ago.  These are totally different animals.  IMO, the number of valid comparisons between then and now is shrinking very rapidly.

       

  6. Who can explain me why a countrmpany with 20 Trillion in debt would want to raise its own interest rate? I may oversimplify the situation in my question, but as I understand it, there is no way it could sustain 2%, even at historical (inflation corrected) tax revenue, war expenditure and small government. Why turn up the heater in a chocolate shop?

    • “Why turn up the heater in a chocolate shop?”  

       

      Maybe because they want to melt the chocolate.

       

      Read my comment above about Great Depression number 2    _JLG. 

  7. Note that in slightly less funny money currrencies, gold and silver didn’t move nearly as much. Meaning, the significant rise in USD is largely due to a drop in the USD, not crazy demand all of a sudden for the shiny.

    • Ya, go ahead. In a few days it will be back down to $16.60 and you can come on here and cry…. What, 2 weeks ago it was over $18 so what’s the big deal. they play it well. the big guys drop it 4% and then buy it up then sell it making 4% on their investment. This game will go on and on my friend.

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