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USAGOLD/Peter Grant/06-14-17
Gold has retraced a portion of today’s earlier gains after the Fed raised rates as expected. However, the overall guidance message was rather muddled.
The Fed apparently no longer sees the Q1 slowdown in growth as “transitory,” and yet the nudged their 2017 GDP forecast up to 2.2%. They also still see themselves on a path for at least one more rate hike this year.
The Fed cut it’s PCE inflation forecast for 2017 to 1.6%, from 1.9% in March. They do not seem particularly concerned (yet?) on this front, saying that they are “monitoring inflation developments closely.” The Fed continues to project at-target inflation in 2018 and 2019.
The Fed also laid out their plans to begin unwinding their $4+ trillion balance sheet, beginning sometime this year. About the only really dovish thing I see in this decision was another dissent from Minneapolis Fed President Kashkari. The Fed seems to be in denial…
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