Thursday, September 17, 2015

After the FOMC announcement of no rate hike

  • UP: gold, gold miners, biotech
  • DOWN: dollar, Dow, S&P500
Citing “recent global economic and financial developments,” the Federal Open Market Committee voted to maintain the near-zero interest rate policy that was put in place during the throes of the economic crisis in December 2008.

In so doing, the U.S. central bank evidently was in accord with major international authorities, notably the International Monetary Fund and the World Bank, which had urged the Fed not to raise its interest rate target for fear of worsening the turmoil in emerging markets.

(click for live chart)

Inflation, however, continues to fall short of the Fed’s 2% target (which uses the personal consumption deflator, not the more familiar consumer price index). And the Fed sees the risks posed from abroad posing downside risks to prices and the economy. Here’s the key sentence from the FOMC statement:

“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”

Which translates to the Fed keeping rates lower for even longer than previously projected.

the following day:

next day following Fed announcement, Fri 9/18/15

for the week:

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