Today's Fed announcement of a 25 bps increase in the funds rate was met like a nonevent. The Fed has accomplished what they intended, increasing rates without really bothering the markets, effectively losing the element of surprise. They did pull a little fast one at the end of the day by submitting an addendum to their earlier statement.
A short time before the end of trading today, they said they had inadvertently dropped a key sentence from their earlier announcement: "Longer-term inflation expectations remain well contained." This statement had appeared in their March statement as well. If you could go to the Big Charts link at the right and chart the INDU, for the Dow, on a one minute two day chart, you will see the quick burst of activity right at the end of the day. That would be about a 50 point ramp job into the close to bring the Dow back into positive territory for the day, up 5 points. There was some movement after the earlier announcement but not really very much.
I continue to be fascinated with the gold market especially on a day like today when the Fed is raising interest rates to prop up the dollar. This runs against the gold but gold managed an okay day while the mining stocks were up. Looking at the HUI index you can see a positive move all day today. This is the kind of action we are looking for in order to add some of these mining shares to our portfolio. We may be getting pretty close to doing that tonight. Stay tuned.