‘Careful’ Yellen weakened the dollar and strengthened Gold – Banker

Word of the president of the Federal Reserve made
 the dollar lost against the euro, gold prices had gone up by $ 16 per ounce, and the S & amp; P500
 He went up by almost a percentage. It seems that in 2016 there will be increases
 US interest rates. Perhaps it is for this reduction.

 

“Developments abroad implies probably slightly lower
 the path of the federal funds rate than was expected in December “-
 Janet Yellen said on the forum of the New York Economic Club.

 

 December 2015 the year the Fed made the first of nearly a decade increase in interest
 rates (25 bps.) and suggested four hikes in 2016. After
 the March meeting of the FOMC (Federal Open Market Committee) called.
 fedokropki suggested only two hikes by the end of the year.

 
 

“Given the risks to the economic outlook I think it would be appropriate for the Committee in a manner
 cautious the corrections policy “- she said Yellen. For investors, the message is clear. Ms. Yellen well
 could say, “no more hikes” (no increases) in 2016.

 
 
 
 

In this way the Federal Reserve withdraws from trials
 normalization of monetary policy, which in December took place after 7 years
 maintaining zero interest rates and over 6 years of “printing money”
 under the banner of QE.

 

“If economic growth faltered or if inflation was
 stubbornly low FOMC would be able to provide only a moderate stimulant through
 cut interest rates back to zero “- he said on Tuesday Janet
 Yellen. Yes, this is the same, which is still in
 Last year, she wanted some increases in the federal funds rate.
 

“Even if the federal funds rate would return to
 zero, the FOMC still would have a significant field to loosen policy. Especially,
  could use methods that we and other central banks successfully
 applied during the financial crisis to exert additional pressure
 a decrease in long-term interest rates and thus support
 economy “- said Janet Yellen, suggesting a return to QE or use
 negative interest rates in the United States.
 

The market reaction could not be different. The dollar lost heavily on
 against the euro: EUR / USD jumped from less than 1.12 to about 1.12867
 20:45 Polish time. Listing of contracts for gold increased from 1,225 USD / oz. down
 1241 USD per ounce. They also gained US stocks – the S & amp; P500
 jumped up by 0.85%, reaching 2054.36 points.

Krzysztof Kolany