On Wednesday, the Fed approved its first interest rate hike in more than three years. Officials said they will raise rates by a quarter percentage point, or 25 basis points. They also indicated an aggressive path ahead, with increases coming at each of the remaining six meetings in 2022. Fed Chairman Jerome Powell believes the “economy is very strong” to handle tighter policy and the probability of a recession is “not particularly elevated.” In other news, Tim Hayes, Chief Global Investment Strategist at Ned Davis Research, told Kitco News that now is the time to be overweight on gold as volatility and uncertainty dominate markets.


CNBC/Jeff Cox
Federal Reserve approves first interest rate hike in more than three years, sees six more ahead

The Federal Reserve on Wednesday approved its first interest rate increase in more than three years, an incremental salvo to address spiraling inflation without torpedoing economic growth.

After keeping its benchmark interest rate anchored near zero since the beginning of the Covid pandemic, the policymaking Federal Open Market Committee said it will raise rates by a quarter percentage point, or 25 basis points.

That will bring the rate now into a range of 0.25%-0.5%. The move will correspond with a hike in the prime rate and immediately send financing costs higher for many forms of consumer borrowing and credit. Fed officials indicated the rate increases will come with slower economic growth this year.

Read the full story, here.


AP via ABC News/Christopher Rugaber AP Economics Writer
Fed begins inflation fight with key rate hike, more to come

The Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s, raising its benchmark short-term interest rate and signaling up to six additional rate hikes this year.

The Fed’s quarter-point hike in its key rate, which it had pinned near zero since the pandemic recession struck two years ago, marks the start of its effort to curb the high inflation that followed the recovery from the recession. The rate hikes will eventually mean higher loan rates for many consumers and businesses.

Under Chair Jerome Powell, the Fed is hoping that the rate hikes will achieve a difficult and narrow objective: Raising borrowing costs enough to slow growth and tame high inflation, yet not so much as to topple the economy into recession.

Speaking at a news conference, Powell stressed his confidence that the economy is strong enough to withstand higher interest rates. But he also made clear that the Fed is focused on doing whatever it takes to reduce inflation, over time, to its 2% annual target. Otherwise, Powell warned, the economy might not sustain its recovery from the pandemic recession.

You can read the full story, here.


Kitco News/Neils Christensen
Now is the time to be overweight gold – NDR’s Tim Hayes

Safe-haven demand for gold has started to dry up even as Russia’s war with Ukraine continues. However, even as prices have dropped well below $2,000 an ounce, the fundamental backdrop remains in place, according to one market strategist.

In a recent interview with Kitco News, Tim Hayes, chief global investment strategist at Ned Davis Research, said now is the time to be overweight gold as volatility and uncertainty dominate markets.

He added that the conflict in Eastern Europe had created some short-term safe-haven demand for gold. However, geopolitical uncertainty will continue to drive inflation higher for the foreseeable future.

“I would say, you want to hold 10% to 15% in gold until we get into an environment where interest rates will become more threatened gold, which is not the case yet,” he said.

You can read the full article, here.




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