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Fed President Comments Send Stock Markets Diving for Cover

schiffgold.com / BY SCHIFFGOLD / SEPTEMBER 12, 2016

maker’s statements about interest rates. It seems investors are, yet again, willing to believe the Fed intends to raise interest rates despite the reality of a bad economy. Policy makers continue to keep the idea of rate hikes alive despite the knowledge they are powerless to do anything.

In a speech Friday morning, Boston Fed President Eric Rosengren suggested the time for a rate hike was getting closer and delaying could dampen economic gains: “A reasonable case can be made for continuing to pursue a gradual normalization of monetary policy,” he stated. “Failure to continue on the path of gradual removal of accommodation could shorten, rather than lengthen, the duration of this recovery.”

The Power of Suggestion

In response to Rosengren’s statement, the market sold off with utility and energy stocks receiving the worst hit. The Dow Jones fell 2.13% and the Nasdaq plunged 2.54%. Gold Stocks closed down almost 6% while bullion dropped around $10 and silver around $0.50.

According to the Washington Post, Rosengren’s statements seemed to catch investors off guard, probably given that Fed president is known to favor lower interest rates to spur economic recovery.

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