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Fed - Improving Outlook / No change in lending rate / Perhaps thru 2023

edited March 2021 in Other Investing
“The Federal Reserve on Wednesday sharply ramped up its expectations for economic growth but indicated that there are no interest rate hikes likely through 2023 despite an improving outlook and a turn this year to higher inflation.”

What I found interesting was the reaction of gold. Languishing in negative territory most of the day, it bounced like a ping-pong ball on the Fed release around 2:00. Last check it was up $14 at around $1745. Gold’s been firming in recent days after a poor beginning of year. Until recently rising interest rates had hurt gold. In recent days that trend reversed.

Why watch gold? Because it reflects, to some extent, observers’ views of future inflation and also whether prevailing “real” interest rates will be positive or negative.

Looks like equities also bounced on the Fed release.

I thought Powell looked very uncomfortable at the news conference - esp when asked to explain how expected inflation could be only “transitory.” Hum ... ?


Apparently, the Fed expects to leave the overnight lending rate unchanged through 2023. No wonder the metals jumped.


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