Market reacts to Fed meeting–and then over-reacts as it hears Fed say rates will stay really low for really longer

Market reacts to Fed meeting–and then over-reacts as it hears Fed say rates will stay really low for really longer

Today Friday March 17, the financial markets have moved to the other end of the dial from its pre-meeting worries. Markets have decided that the Fed’s comments indicate that Janet Yellen & Co. are very dovish on inflation and interest rates.At the close of trading on Thursday the 10-year Treasury had dropped to 2.53%, that’s below the peak this week of 2.63%. Today the yield dropped further to 2.50%

Winners from the Fed’s move on Wednesday

Winners from the Fed’s move on Wednesday

The jump in the price of gold and the even huger spike in the prices of gold mining stocks tells us something really important about how the financial markets see the Federal Reserve’s action and rhetoric on Wednesday, March 15. Gold for April delivery climbed 2% in New York after the Fed raised its short-term benchmark interest rate by 25 basis points. The VanEck Vector Gold Miners ETF (GDX) roared ahead 7.69%

Saturday Night Quarterback says, For the week ahead expect…

Ahead of the Fed meeting, Wall Street wonders if Fed might hike 4 times in 2017

Now that the Federal Reserve has convinced the markets that it will act to raise interest rates on Wednesday–odds of a 25 basis point interest rate increase on March 15 climbed to 95.2% today from 88.6% on Friday, Wall Street is starting to entertain the possibility of four interest rate increases in 2017. Odds of a four increase 2017 have climbed to 25% from just 12% at the end of the January.