The FOMC Keeps Interest Rates Unchanged, Attempting to Support Stocks
Today, the FOMC decided to keep the interest rate steady at 0.25% but the kicker was that they see rates remaining “exceptionally low” through late 2014. Wow!
So that’s pretty much all of 2012, all of 2013 and most all of 2014. Is that crazy or what? How can they know what they’ll need interest rates to be at that far out?
The truth is…they don’t! But what their attempt is…is to send a message that “money will be cheap” for a long time and to put your money in places where you can earn something on it rather than saving it at “next to nothing”.
Stocks turned around on the news (which is what the Federal Reserve really wants). This also lit a fire under the “risk-on” currencies.
In my Currency Cross Trader service, we’re now up around 175 pips on CAD/JPY and up over 235 pips on our NZD/USD trade.
You see, I saw a near-term turn-around coming in the “risk on” assets even before this because of copper breaking out of a triangle chart pattern on its daily chart. That’s bullish for the economy in the near-term. Right now, copper sits right under its 200-day simple moving average. If it can crack that, to the upside (and I think it can)…then the party will continue on even further.
Also, gold is pushing higher upon the FOMC announcement today. Gold just broke above its downward corrective line today…so that opens up gold to head even higher upon this news.
The Fed is doing their best to prop up assets like stocks and keep people from doing things like saving. It’s time to make sure you know the “rules of their game” and are playing by them.
You do that like taking on positions like we’re doing within the Currency Cross Trader service. You learn the Fed’s rules…and then you play “their game”. Those that don’t, end up on the losing side and see their dollar-denominated assets wither away.