LOS ANGELES, March 3, 2017 /PRNewswire/ -- The probability of a rate hike this month has advanced to 70%, according to sources at Reuters and CNBC, after odds were 1 in 5 just last week.
Expectations rallied quickly due to a combination of hawkish statements from Fed officials and the release of the January PCE price index on Wednesday.
"The case for a rate increase in March has come together," Federal Reserve Governor Jerome Powell told CNBC after the report was released.
The data in the PCE revealed consumers prices posted their biggest monthly gain in four years. Additionally, the 12-month increase in prices remained at 1.9 percent, just below the Fed's 2% target for this year.
"The Federal Reserve has no excuse to put off hiking interest rates in March," CNBC's Jim Cramer said on Thursday, referencing these strong numbers.
Since President Trump's election in November, the economy has been revitalized, with U.S. markets on a tear. The markets hit all-time highs Wednesday, alongside the Dow closing above a record 21,000.
Speculation over the stock market rally begs the question — how high will the Dow climb? Common sense dictates that trees don't grow to the sky.
Rising interest rates have a tendency to send ripples through the stock market, and large-scale investors and hedge fund managers have begun quietly moving their money away from risk and into safe haven markets, such as gold. Capital Gold Group precious metals market analysts are bullish on the yellow metal as a hedge against economic uncertainty. Citibank echoed this support of gold investments this week, predicting that physical gold will reach $1,300 in 2017, due to a number of volatile factors, both domestic and international.
The most tried and true investment wisdom is the most frequently overlooked: buy low and sell high. Gold market specialists have determined that the yellow metal is coming off of a six-year low, bottoming at the end of 2015 and climbing since. Last year we saw gold make impressive gains and that trend is expected to continue for 2017.
Investors now widely expect the raise at the Fed's March 14–15 policy meeting. If the Fed moves forward with the raise, it will be the first of the proposed three rate hikes for 2017.
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