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Super Bowl of Rate Hikes?

Super Bowl of Rate Hikes?
Category: Market Reports
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Posted: 12-16-2015 03:25:00 PM

As of the time of this report, we see Gold up on the day as traders cover their short positions ahead of the Fed decision. 

Welcome to the Super Bowl of all rate hike decisions. It’s been almost a decade since the last rate hike in interest rates and today at 2pm EST we will find out the FED decision.

With the majority of economists and Wall Street traders believing a rate hike is a done deal, the focus shifts to the language going forward. Is this a one and done rate hike, or are more rate hikes in our future? Algorithm programs are in place to react to key words in the language the Fed releases and can have a significant impact on all markets. I encourage you all to watch the action at 2pm. I think you’ll find it very interesting as these events can cause wild swings in prices.

No one knows for sure what the FED will do in 2016. Some economists believe once the FED gets started raising rates, three or four rate hikes in 2016 are in order, but it’s my belief that Janet Yellen is so conservative that she will indicate that any future rate hikes will be dictated by market data and will refuse to commit to showing her hand.

As I reported to you in my last comment, many Wall street traders expect a break out of the recent trading range in gold as the Fed decision is released. In the small chance that they postpone a rate hike, I expect Gold to have a strong short covering rally to the upside. If the language reveals more rate hikes are in the cards, I expect an immediate sell off in Gold will occur. Watch for key words that will indicate future FED decisions. These key words will have an immediate effect in the price of the Gold, up or down.

As of the time of this report, we see Gold up on the day as traders cover their short positions ahead of the Fed decision. Dollar index and the Euro close to unchanged at the moment, also awaiting the 2 o’clock decision.


Higher rates are applauded by Seniors who have been forced to look to the risky stock market for a return on their cash. Homeowners with adjustable rate mortgages as well as folks with credit card debt are hoping the FED stays put. These Fed decisions have a major impact on all of us as we hold our breath as the data is released.

If you are looking for me, I’ve decided to have a tailgate party outside the FED office building this morning so I can get the decision first hand. Hot dog anyone?

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About The Author

Walter Pehowich Author Name: Walter Pehowich
This editorial has been prepared by Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not prove to be true, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept the foregoing.

What are your thoughts? Super Bowl of Rate Hikes?