By James Rickards
As widely expected, the Federal Reserve raised its target rate by 50 points today, its largest increase in 22 years.
Some market analysts were even predicting a 75-basis point hike. But today, Jay Powell reassured markets by claiming that he’s not considering such a move.
The stock market soared after Powell’s reassuring announcement. The Dow gained over 900 points today, with most of the gains coming after the Fed’s announcement. The S&P gained 124 points, while the Nasdaq gained 401.
Gold had a solid day, gaining over $13.
Importantly, the Fed also announced today that it’ll begin draining its balance sheet next month (in other words, begin quantitative tightening). The balance sheet is expected to decline $47.5 billion per month starting in June, increasing to a cut as much as $95 billion per month in three months.