Lat week the Federal Reserve (Yellen and Co) spoke and sent out a very important message to who was listening for real.
The probability of a March hike suddenly went from under 30% to close to 80% for March (practically unless employment data on Friday are really off the mark – it is certain).
But there was more than that
- In the last years the FED has been very tactical – data dependent and reacting to events – almost to counter the gridlock in Congress that blocked everything else. Now the Fed declared a strategic approach in order to set a stable path when Trump policies are so fluid and changeable.
This is subtle, but important change. The last 2 rate hike cycles were in 2004-2006 and 1994-1995.
It was steady and lead the path …to the Asian Financial Crisis (1997) and the Global Financial Crisis (2007).
And Gold, apart an initial wobble, was not the worst place to be at all.
This approach can be MORE important of all the geopolitics issues (Trump, European election) that we have on hand.
investorpolitico 