Fully Priced In: Gold & Silver Shrug Off The Fed “Hold” On Interest Rates

To nobody’s surprise, the Fed hold’s rates steady. Gold, silver and the markets barely react, and it’s now all eyes on Powell…

Update (3:30 p.m. EST):

Gold remains bid:

Silver is treading water above $17.50, and it seems the monkey-hammering could be over.

Interestingly, yield on the 10-Year Note has broken below 1.6%:

It may not have been today, but rate cuts cometh, and yield on the 10-Year Note is one indication of that, now below the middle (i.e. inverted) of the target Fed Funds target range of 1.5% to 1.75%.


(Silver Doctors EditorsThe Fed just held rates steady, as expected.

Here’s the statement from the Fed:

Information received since the Federal Open Market Committee met in December indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a moderate pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

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 maximum employment objective and its symmetric 2 percent inflation objective. 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.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

Implementation Note issued January 29, 2020

Gold & silver were a whole lotta “meh” the minute the statement “hit the tape”.

The redline from ZH (which tracks changes to the statement):

Jerome Powell’s press conference begins at 2:30 p.m. EST:

We’ll update this post after the press conference…