Precious metals are moving mostly sideways to begin the day and are poised to post weekly losses, albeit minor ones. There hasn’t been too much in the way of economic data this week, but that did not stop investors from keeping themselves busy. With this week playing host to the latest Federal Open Market Committee meeting, investors were busy speculating what the Fed might have to say with regard to the future of interest rates. Though this has been a top concern for investors for some time now, this was the week where most people were expecting to hear some solid, concrete information with regard to when interest rates will be raised as well as how much they will be raised by.
In addition to the marketplace focusing on the FOMC meeting, the world’s attention was once again called to the Russian economy, which has been faring quite poorly as of late. Not only has the ruble lost a bulk of its value this year, but more recently, Western sanctions in conjunction with falling crude oil prices are only making matters worse for Russia. It will be interesting to see how the situation surrounding the Russian economy will evolve as we head into the new year.
FOMC Meeting Disappoints More Than Anything Else
As soon as last week was coming to an end, the top priority for investors immediately became this week’s Federal Open Market Committee meeting. Though the FOMC meeting is closely watched by investors every month, this month saw the meeting gain a good deal of attention simply because it was widely believed that more information regarding interest rate hikes in the US would be divulged.
After months and months of speculation, it seemed as though this was finally the week where we would be given more, reliable info regarding when interest rate hikes would occur, and how significant those hikes would be.
Unfortunately, by the time the meeting wrapped up on Wednesday afternoon and Janet Yellen addressed the media, it was made painfully clear that the FOMC not only wouldn’t be making any policy shifts, they also refrained from divulging any further information regarding future policy shifts. As a result of this inaction and more dovish post-meeting statement, US stocks rebounded nicely after suffering losses through the first few days of this week and a majority of last week. Investors are still curious to hear about when interest rates will be raised, but when that information will come remains a mystery.
Russian Economy Still Struggling
Apart from the FOMC meeting, investors this week were also focusing on the status of the Russian economy. The reason for this is due to the fact that the ruble is continuing to decline, as are crude oil prices. In addition to all of this, Western sanctions are beginning to really weigh on the Russian economy and it is now beginning to affect the lives of average Russian citizens in negative fashion.
Now, the attention of the market will continue to be fixated upon the Russian economy as we head into the new year. Vladimir Putin recently commented that it will take up to 2 years for this economic downturn to correct itself, but remained confident that it will, in fact, correct itself.