Gold & Silver Knee-Jerk Lower As Fed Cuts Interest Rates By 25 Basis Points

The Fed just cut interest rates, but it’s Powell’s press conference where things could get interesting. Watch it here at 2:30 p.m. EST…

The Fed’s September FOMC statement “hit the tape” at 2:00 p.m. EST.

The Fed has cut interest rates by 25 basis points.

Instead of a targeted range between 2.0% and 2.25%, we now have a targeted range between 1.75% and 2.0%.

The minute the FOMC statement was released came with the obligatory “gotta sell my gold and sell it now”:

Trading volume for gold was over 7,500 contracts between 2:00 p.m. EST and 2:01 p.m. EST.

Here’s the red-line of the statement, courtesy of ZH:

Of course inflation is “near” the Fed’s “symmetric” 2% target.

Isn’t it always?

Watch Jerome Powell’s press conference, beginning at approximately 2:30 p.m. EST:

This press conference should be a good one because the repo market has been blowing-up, so Powell has not had a ton of practice answering questions about the repo market, which means there is great potential for Powell to say something shocking to the markets.

Fifteen minutes in and we see the knee-jerk reaction is clearly to the downside:

Knee-jerk reactions are generally not the eventual direction of the move.

I think this will be the case, so I see weakness here as a dip.

There is still a full press conference from Powell.

At least this presser has a curve ball.

Has the Fed lost control?

A Powell stumble?

We’ll see.

Stack accordingly…

– Half Dollar


About the Author

U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at Paul’s Twitter is @Paul_Eberhart.