{"id":13387,"date":"2024-12-20T08:52:54","date_gmt":"2024-12-20T08:52:54","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/12\/20\/gold-silver-and-bitcoin-prices-fall-as-fed-caps-off-year-with-rate-cut\/"},"modified":"2024-12-20T08:52:54","modified_gmt":"2024-12-20T08:52:54","slug":"gold-silver-and-bitcoin-prices-fall-as-fed-caps-off-year-with-rate-cut","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/12\/20\/gold-silver-and-bitcoin-prices-fall-as-fed-caps-off-year-with-rate-cut\/","title":{"rendered":"Gold, Silver and Bitcoin Prices Fall as Fed Caps Off Year with Rate Cut"},"content":{"rendered":"<\/p>\n

The US Federal Reserve announced an interest rate cut of 25 basis points on Wednesday (December 18), reducing its target range to 4.25 to 4.5 percent in its third reduction of the year.<\/strong><\/p>\n

Policymakers also signaled that only two rate cuts are expected in 2025 versus the four originally forecast. <\/p>\n

In comments after the Fed\u2019s meeting, Chair Jerome Powell emphasized that the Fed will remain cautious next year, focusing on labor market strength and further progress in curbing inflation. <\/p>\n

\u2018I think the actual cuts that we make next year will not be because of anything we wrote down today. We\u2019re going to react to data; that\u2019s just the general sense of what the committee thinks is likely to be appropriate,\u2019 he said. <\/p>\n

\n

Gold, silver and markets fall post-rate cut <\/h3>\n

Financial markets experienced significant volatility following the Fed\u2019s announcement.<\/p>\n

The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped by 1,123 points on Wednesday, a 2.58 percent decline, which extended its losing streak to 10 consecutive days \u2014 the longest since 1974.<\/p>\n

The S&P 500 (INDEXSP:.INX) dropped 178.45 points, or 2.95 percent, ending at 5,872.16.<\/p>\n

Meanwhile, the Nasdaq Composite (INDEXNASDAQ:.IXIC) recorded the steepest decline of the three on Wednesday, losing 716.37 points, or 3.56 percent, to close at 19,392.69.<\/p>\n

The selloff was triggered by the Fed\u2019s cautious tone and change in its 2025 rate cut projections. Many market participants had anticipated a more aggressive series of reductions, and took the time to reassess their strategies.<\/p>\n

Some experts have described the Fed\u2019s move as a \u201chawkish cut.\u2019 The Fed\u2019s hesitation about future policy shifts has heightened investor uncertainty, leading to widespread profit taking in the market.<\/p>\n

Bond yields also rose sharply as investors now expect tighter financial conditions for an extended period.<\/p>\n

The gold price experienced volatility, shedding 2 percent following the rate cut, slipping to US$2,585 per ounce. The decline marked the first time the yellow metal has fallen below US$2,600 since mid-November.<\/p>\n

While gold rebounded in after-hours trading, sister metal silver fell 3 percent after the rate cut and is holding in the US$29.20 per ounce range.<\/p>\n<\/div>\n

\n

Powell talks Trump and Bitcoin after meeting <\/h3>\n

In a press conference after the Fed\u2019s meeting, Powell addressed questions about how the central bank\u2019s decisions may interact with economic policies proposed by President-elect Donald Trump.<\/p>\n

While emphasizing the Fed\u2019s independence, Powell also acknowledged the uncertainty currently surrounding Trump\u2019s proposed tax cuts, tariff increases and immigration measures.<\/p>\n

\u2018It\u2019s very premature to make any kind of conclusions. We don\u2019t know what will be tariffed, from what countries, for how long, in what size,\u2019 Powell explained to reporters on Wednesday. <\/p>\n

That said, he noted that Fed officials have started assessing potential scenarios. Powell also said Trump\u2019s policies could have inflationary effects, particularly through increased tariffs and fiscal stimulus measures.<\/p>\n

For instance, the Fed\u2019s projections show economic growth remaining slightly above trend in 2025, with inflation staying above target for at least two more years. The jobless rate is expected to remain low, hovering around 4.3 percent.<\/p>\n

These conditions, Powell said, will guide future monetary policy decisions, irrespective of changes in fiscal policy.<\/p>\n

He also clarified the central bank\u2019s stance on digital assets, responding to Trump\u2019s campaign discussions on creating a strategic reserve for popular cryptocurrency Bitcoin.<\/p>\n

Powell was clear that the Fed is not authorized to own Bitcoin under existing laws, and has no plans to advocate for legislative changes to enable such holdings.<\/p>\n

\u2018That\u2019s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed,\u2019 he said.<\/p>\n

Following Powell\u2019s comment, Bitcoin dropped below US$100,000, its steepest decline since September of this year.<\/p>\n

Moving forward, the Fed reiterated its goal to bring inflation back to its benchmark 2 percent target.<\/p>\n<\/div>\n

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

The US Federal Reserve announced an interest rate cut of 25 basis points on Wednesday (December 18), reducing its target range to 4.25 to 4.5 percent in its third reduction of the year. Policymakers also signaled that only two rate cuts are expected in 2025 versus the four originally forecast. In comments after the Fed\u2019s […]<\/p>\n","protected":false},"author":0,"featured_media":13388,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-13387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=13387"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13387\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/13388"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=13387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=13387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=13387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}