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FED Raises Interest Rates by 0.25% - Gold and Silver Rise prior to the Announcement Video

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Today is Wednesday 16th December 2015 and we are briefly covering the FEDs announcement that it has raised interest rates by 0.25%

After two thousand, five hundred and fifty six days of record low interest rates, the US Federal Reserve has at last raised interest rates by 0.25%

"Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic conditions, the committee decided to raise the target range for the federal funds rate from ¼ to ½ percent," the FOMC's post-meeting statement said. "The stance of monetary policy remains accommodative after this increase, thereby supporting further improvements in labor market conditions and a return to 2 percent inflation."

Many market commentators have predicted this rise. In fact, earlier today, Michael Gapen, Barclays’ chief US economist, said that the Federal Reserve’s goal is to raise interest rates and avoid causing any market turmoil. Speaking on Bloomberg TV, Gapen said the Fed has a “very real and very tangible” fear of spooking investors.

Both gold and silver rose prior to the announcement up 1% and 2.5% respectively and at the time of this video gold stands at $1070 and silver at $14.19

So what do we make of this? Well, the rate rise was expected.

Despite what Peter Schiff and others claimed that there was no way the FED could raise rates – they have been proven wrong. Yes to some degree they were backed into a corner. The dollar is slightly up on the day, though traditionally when rate announcements have previously been made, the reaction has ironically been to fall slightly. We shall no doubt see a little turmoil for a couple of days, but we hold fast to our view that the short term trend for gold and silver is still down from these levels.

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